Electronics Weekly puts its questions to an industry figure: Dave Shrigley, CEO of Wolfson Microelectronics

With some mixed-signal companies making very high profit margins, e.g. 70 per cent plus, does Wolfson have to increase its margins?

Wolfson is focused on the consumer electronics market and the products which use Wolfson devices face intense competition in a high volume, highly cost sensitive market, and we don't anticipate those dynamics to change. For this market more than 50 per cent gross margin is excellent.

Wolfson has demonstrated strong profitable growth and been highly cash generative with an excellent gross margin in the 50-53 per cent range and we anticipate it will continue to be the case. Having solutions which add even more value for our customers is key to maintaining our gross margin in the future.

Around the time of the IPO, until last year, Wolfson was growing at 50 per cent a year. Can Wolfson return to this kind of growth?

Obviously as a company becomes large it becomes more difficult to sustain such a high percentage growth rate, but that does not mean Wolfson is done growing. In fact far from it, we have very ambitious and aggressive growth plans and are setting our sights high. My role as CEO is to build on past Wolfson successes and lead the company through to the next level. We plan to do this through both organic growth and small tuck-in acquisitions of complementary technologies.
 
What happens if the audio market doesn't go for quality?

The audio performance of multimedia digital electronics is still very much a key differentiator - as a casual glance at the reviews in the press will confirm. With increasing amounts of audio and multimedia files being downloaded through broadband access, audio technology has become a key enabler to getting the best user experience out of that media.

Consumer expectations for performance audio have been recalibrated by the leading portable devices, so that people not only expect great audio at home from their hi-fi, but also on-the-go from the device they carry around in their pocket, whether that's a mobile phone, a digital camera or a portable media player. For portable multi-media devices, audio is one of the most important product differentiators for the end consumer and with the trend to a more integrated multimedia experience is becoming even more so. Wolfson has technology to make these expectations a reality.

Technology which enhances the sound from the tiny speakers on a portable device to sound more like you home hi-fi or creates a engrossing 3D audio experience from a portable gaming device.

Can Wolfson diversify significantly outside its core competence of audio?

Building on our core competency in audio, we can see opportunities to integrate other mixed-signal and analogue functionality by adding selected new signal chain technologies, which improve the user experience and for now that gives us plenty of scope for growth.

Indeed we are fully focussed on pursuing those opportunities for now. More than that, as digital circuits continue to shrink, the economics of combining analogue and mixed-signal on the same silicon as the pure digital circuits just doesn't make sense. We believe that the next stage of gains can be made by integrating more of the analogue and mixed-signal together to achieve further cost and space savings.

This approach offers an improved end user experience and more highly optimised lower cost solutions with many design and manufacturing synergies. That's what our AudioPlus strategy is all about. Several of our technologies, and MEMs is a good example, can however be applied to a diverse range of markets and end applications, so in the longer term further diversification could be a possibility, but we have no specific plans just now.

As the new CEO, do you have any new strategic directions for Wolfson?

I was attracted to Wolfson because it is a great company with, I believe, a fantastic future. It didn't get that way by not doing the right things. So while I don't see a fundamental change in direction, I believe I can definitely help accelerate and enable the step up to the next level. Already I've developed and strengthened the fundamental Wolfson strategy, significantly augmented the organisation and started to put in place structure and process that will support our aggressive growth plans.