Jalal Bagherli, CEO of Dialog Semiconductor talks to ElectronicsWeekly.com about how UK-based R&D is changing the mixed-signal chip business in the downturn.
Q. As an Asic business focused on the German automotive industry, how will you cope with the downturn?
Jalal Bagherli: While it is true that the German automotive industry is an important part of our business. We have diversified significantly in the past few years. We are increasing the application specific standard product (ASSP) part of our business, and most of these products are aimed at mobile wireless, which accounted for around 80% of our revenues at the end of 2008 and is still growing.
We have been able to leverage our system power management, battery charging and high-quality audio expertise to gain design wins with tier-one OEMs, and our customer base is now geographically diverse, with most major opportunities in Asia and the US. We are also developing a strong business in mobile applications for our low-power display controllers for passive OLEDs and E-Ink products.
Of course, there are many opportunities for growth in the mobile markets, even in the present recession. We expect to show growth in the next few years and we are now the fastest growing publicly quoted semiconductor company in Europe.
Q. How important will power management be to future business? What are the main opportunities?
Jalal Bagherli: System power management is the theme running through most of our products. In this respect it is key to our future success.
For example, we are developing an entirely new class of ASSP system power management ICs that work with a very wide range of applications processors. These provide single-chip power control of complete systems – not just the processor, but its peripherals and user interfaces too.
We have developed software utilities with simple interfaces that enable system designers to optimise power sequencing and set up of a variety of sleep modes using these devices. This is a new way of implementing power management and there are high-volume opportunities in mobile phones and portable media players.
We are differentiated by very high functional integration in this kind of device and demand is driven by the ongoing need to save space, cost and power.
Q. What proportion of your business will be Asic versus ASSP over the next three years?
Jalal Bagherli: This definition of ASSP is not really clear-cut. Some devices start out as Asics then start to be used in other products. If we define an ASSP as something that is today used in more than one application and/or one customer, these products are about 35% of our business at present.
Within three years, I see our Asic/ASSP mix being nearer 50:50, most of our growth will be from ASSPs, and we are accelerating the rate at which we introduce new products. We intend to launch new ASSP products in system power management, high-quality audio and ultra-low-power display controllers.
Q. With demand for consumer electronics products falling, what is your prediction for the rest of 2009?
Jalal Bagherli: Nobody knows the extent to which the market will contract, and forecasts vary widely. I expect there will be a reduction in demand for the first half year, but once macro economic situation stabilises, or even improves, due to governments’ financial stimuli for consumers around the world, the picture could change in the second half.
Q. Dialog carries out R&D in the UK. How would you characterise the UK as a locale for analogue design?
Jalal Bagherli: The UK is one of the best places in the world to do analogue design. There is a culture of innovation, and universities are supporting new talent with relevant courses and research facilities.
You only have to look at the number of analogue/mixed-signal start-ups to see how much talent is around.
UK engineers are clearly motivated by technical innovation and the challenges of working with world-class customers in a good design environment – it is not simply down to who pays the highest salary in the short term.
Demand for analogue designers has exceeded supply in the past few years, but the situation has changed in recent months. We have been very successful in recruiting for R&D centres, both in Swindon and Edinburgh, and we have further engineering vacancies at both locations that we will be seeking to fill this year.