With 2014 global outlook likely to be another slow growth year similar to 2013, it’s imperative that a company be in the right markets at the right time if it is going to outperform the market, writes Lothar Maier, CEO, Linear Technology.
The effects of the past financial crisis, subsequent deep recession and now a subdued recovery continue to pose enormous challenges to businesses and their customers. But even in this subdued global business environment, markets are shifting and sometimes in unnoticed directions.
In the analog semiconductor market, the sands have shifted favoring the automotive and industrial markets and away from the consumer and communications markets. This seems extraordinary since there appears to be no bounds on the parade of new consumer electronic devices that are served up daily.
But with feature integration and performance stagnation, the analog communications and consumer markets have in the past several years declined or shown only modest market growth.
Six or seven years ago Linear Technology presented the idea to investors that new product design and development was going to shift away from communications and consumer to automotive and Industrial markets. It was met with skepticism and maybe some disbelief.
But time has proven that automotive and industrial analog markets are in a new electronic age. The industrial segment of the analog market has grown from 6% of the total market 10 years ago to 21% today. Also, in just the last 4 years, the analog automotive market has grown from 14% of the total analog market to 20%.
Even if global economies are only showing modest recoveries, being in the right markets at the right time matters if a company is going to outgrow the market. In the past several years, Linear Technology revenue derived from the automotive and industrial market has grown to 62% of revenue and 86% of revenue comes from non-consumer end markets.
Success in these markets needs more than market and sales focus. It needs products that bring value and innovation. Industrial and automotive system environment demands products that are precise, reliable and can operate over wide temperature ranges with efficient thermal management. The automotive and industrial markets are in an innovation cycle and need compelling analog products to improve performance, efficiency and drive end market differentiation.
Innovative products such as the Linear Technology unique family of Micromodules have gained broad acceptance in these markets. Micromodule products are complete solutions in a semiconductor package that minimize design time and solve the common problem of board space density, transferring the design burden from the designer to the micromodule, greatly reducing design time.
Today’s designs demand reduced energy use and improved system performance under the pressure of vanishing development times. This challenge is met with Linear Technology Power System Management products (PSM) that use powerful GUI software, LTpowerPlay, providing control and monitoring of power usage, voltages, sequencing, margining and fault data logging. This is just a small sample of the over 7000 innovative analog products that Linear Technology provides to its customers.
In the analog market, it’s no longer enough to have compelling products, but as the products become more complex, mixing analog and digital functions frequently needing software and applications support, having a skilled worldwide field applications engineering team is a prerequisite for success.
This is particularly necessary in the industrial and automotive markets. The products in these markets are complex systems that may be designed and manufactured at multiple locations with a global footprint. Linear Technology provides consistent customer application engineer support, interconnected anywhere on the globe from design to manufacturing to sales support.
An improving market benefits all companies, but the current global economic impasse requires companies to chart their own path to growth and in analog being in the right markets at the right time matters.
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