Analogue semiconductor market bottomed out in the spring and is now starting the recovery on the back of stronger demand from the mobile phone sector as it rolls out new smartphones.
This is the view of Don Macleod, president and chief operating officer of National Semiconductor.
“We saw bottom in early spring. Orders in the May quarter were up on the February quarter,” Macleod told EW.com.
Macleod suggests that there are signs of “some normality” returning to the semiconductor market. “Weekly order run-rate in May was up on April,” said Macleod.
It is in the mobile phone business, which accounts for 30% of National’s sales revenues, where the pick has been most noticeable.
“Orders from the mobile phone sector were up 50% in the May quarter,” said Macleod.
The big driver in the mobile market, says Macleod is the development of smartphones, Android-based handsets and netbooks.
“Our customers are expecting a more positive second half of the year,” said Macleod.
China will be a key driver, but it is not just the Asian markets, demand will also come from North America, home to Apple and RIM, developer of the Blackberry.
In Europe, the story is different. Here sales are driven by industrial applications including aerospace and automotive.
Only 10-12% of the European business is in mobile infrastructure.
“There are no signs of recovery in this business yet,” said Macleod.
A large proportion of the chips National supplies into the handset market are related to power management functions. “The new smartphones need sophisticated power management for functions such as higher quality audio and display backlighting,” said Macleod.
The way analogue chip suppliers like National address this market has changed. Rather than just supplying standard products as in the past, handset developers now require application specific analogue parts and even fill reference designs.
This has been a feature of the digital chip markets such as DSP, microcontrollers and FPGAs for some time. It is a relatively new feature in the analogue market.
“National is traditionally a supplier of building block products. Now we have more of a market focus which means we offer application specific products,” said Macleod.
“This is a repositioning of the company in the market,” said Macleod.
This repositioning of the business may also involve partnerships and even small acquisitions.
The development of application specific products and reference designs is not simply addressed at the mobile market, it is also being adopted more widely.
“We are also applying this in the energy efficiency space – in the power train of electric vehicles, solar and LED lighting,” said Macleod.