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IMP to join analog power field
By Jennifer L. Baljko
The market for power management products has caught the eye of another
analog-IC supplier.
IMP Inc., San Jose, last week said it is developing analog power
management devices, an area the company hopes will offer strong growth
opportunities as these products take on a more critical role in the market for
portable high-tech goods.
IMP, which has focused mostly on its foundry operations and providing ICs
for mass-storage companies, will face competition from the likes of Linear
Technology Corp., Maxim Integrated Products Inc., Micrel Semiconductor,
National Semiconductor Corp., Semtech Corp., and other longtime power
management players. But IMP's entry may have come at the perfect time,
analysts said.
The $2 billion industry for power management ICs, which is expected to
grow nearly 16% annually for the next several years, is becoming a viable
option for analog and mixed-signal companies looking to diversify offerings
and increase profitability, analysts said. While applications in the computer,
communications, consumer, and industrial arenas continue to emerge, there
are only a few vendors covering the entire spectrum, leaving room for others
to elbow their way in.
"The competition is strong, but it is a very high-growth area," said Jim Liang,
senior industry analyst for analog and mixed-signal products at Dataquest
Inc., San Jose. "There are a lot of new players in the market, but it is not
saturated as of yet. What's nice about the analog market is that one or two
players do not dominate it. Each supplier has its own flavor and focuses on
different parts of the market."
As the playing field becomes more crowded in the next couple of years,
finding the right niche while balancing relationships with customers will be very
important to those riding the power management wave, according to industry
observers.
"Companies are going to be picking a strategy and saying, 'These are the
things we have in terms of processes and capability. This is what is going on
out there,' " said Doug Lee, an analyst at NationsBanc Montgomery
Securities, San Francisco. "Analog companies are going to be looking at their
core competencies. They will be looking at how efficient the products are and
what functionality they offer."
With that in mind, IMP, a $45 million company that would like to make the
power management segment 35% of its total sales, expects to roll out in the
next few months a family of low-dropout linear regulators and
electroluminescent products that will be used in portable, battery-powered
devices, said Barry Wiley, vice president of marketing and sales. IMP will
also introduce switching controllers in late 1998, as well as search for
joint-venture partners to further diversify its product mix.
The company plans to leverage its products on the strength of its Bi-CMOS
and CMOS 0.8-micron process technologies, and foster close relationships
with distributors and customers, he said.
One of the challenges IMP faces is to prove itself, which won't happen
overnight, Wiley said.
"We have to build credibility as a supplier in this market. Many of the
customers don't know who we are yet," he said. "We feel that we have the
right technology processes in place to distinguish ourselves. We want to
establish ourselves as a reliable supplier and work with customers right from
the beginning of the design stage."
To gain recognition, IMP will be implementing several approaches, including
being a second source to some customers, developing proprietary ICs, and
customizing products, Wiley said.
In some ways, that is the strategy another power management rookie took.
Analog Devices Inc., a well-established analog company, joined the power
management ranks about 18 months ago and got its feet wet as a
second-source supplier, said Ross Ayotte, marketing communications
manager at the standard linear product division of the Norwood, Mass.,
company.
"In the beginning, a lot of the products were a second-source offering. It was
a way to get into the business," he said, adding that ADI has introduced a
total of 50 power management products since its debut.
Despite the promising landscape, how well IMP does will depend on how
well it can execute its new strategy, said Dan K. Scovel, an analyst at
Fahnestock & Co. Inc., New York.
"Clearly, IMP's strength is in its manufacturing facilities and design strategies.
This move is extremely consistent with the strategy to diversify their customer
base and product mix," he said. "There is a fair amount of opportunity, and it
probably is a good market for them to address. Now it's up to them to make
good on it." |
