GaAs microelectronics technology
By the fall of 1999 the company had developed a GaInP HBT process on its 6-inch line, and few months latter it was shipping InGaP HBT samples to potential customers
follower. To this end the company was not going to make a HBT with an AlGaAs emitter, which was rapidly becoming the incumbent technology, but a product with an InGaP emitter that would combine superior reliability with better high-temperature operation and improved linearity over battery lifetime.
By the fall of 1999 the company had developed a GaInP HBT process on its 6-inch line, and few months later it was shipping InGaP HBT samples to potential customers. But it took an awfully long time to convince them to buy this type of product in volume, and Anadigics went through some very tough times during the beginning of the last decade, shedding employees and recording a loss for every fiscal year between 2001 and 2006. But by 2007 Anadigics’ high quality product was making significant inroads into the 3G handset market, and the company was netting quarterly sales of over $80 million.
It then committed the cardinal sin: Failing to meet customer orders. Bastani resigned shortly after the news broke, and Anadigics started searching for a new CEO.
Company chairman Gilles Delfassy took hold of the reigns as an interim measure. He also contacted a good friend of his, Mario Rivas, to see if he might be interested in the CEO role. These two industry veterans first knew each other when Delfassy was in charge of the wireless business at Texas Instruments and Rivas held an equivalent role at Motorola. Their friendship was strengthened when Rivas moved to Philips Semiconductor, because the two of them then worked together to provide the baseband and PA for Sony Ericsson handsets.
Rivas took a look at the role, and decided he was interested: “I thought that Anadigics had great technology, great people, and a great possibility. And it’s down my alley as far as expertise was concerned.”
When Rivas started at Anadigics on 1 February 2009, morale was rock bottom. There had been lay-offs, quarterly sales had slumped from $80 million to $30 million and the economic outlook was terrible, with the world entering its worst recession since the 1930s.
Rivas cut through the doom and gloom, telling the workforce that they were going to have fun: “We spend too much time at work not to have fun.” He also fostered a stronger sense of teamwork, making it clear that every employee has an important contribution to make. The CEO identified three goals for turning the business
around: greater intimacy with customers; improved operation; and preservation of cash. “The fact that we were at 30 percent factory utilization allowed us to do a lot of improvement. It’s hard to improve when you are full.”
Customers are now starting to come back to Anadigics, and according to Rivas, they never had any doubts about the quality of the company’s technology. Their major concern was trusting Anadigics once more with the role of being a key supplier. Thanks to their faith in the Warren fab, Anadigics quarterly sales are edging towards the $50 million mark, and an associated increase in fab utilization has allowed the company to drop its temporary introduction of one week’s unpaid leave every quarter. What’s more, the company has been recruiting, a move that always boosts morale.
One important change that Rivas has brought to the company is a switch to a hybrid model that combines in- house production with outsourced manufacture. “When we passed 30 percent fab utilization I announced a strategic agreement with WIN Semiconductors in Taiwan. People were scratching their heads and saying: Are you nuts?” But Rivas knows that it takes a long time for a new factory to optimize its processes for new products that satisfy customer expectations. He was already thinking about the demand for Anadigics products in 2011, and by then he expects that the company will manufacture over 1000 wafers per week, exceeding its in-house capacity.
If the company were to build another fab to meet that demand, it would need to raise $100 million. “In the mean time, you have WIN Semiconductors, which has a very good technology and a very good funding base. You could look at it as free capital for us.”
Rivas expects the GaAs IC business to grow over the next few years. He is targeting production of 2500 wafers per week in 2014, a level of production that will allow Anadigics to up its share of the GaAs handset market from today’s single digit figure to 14 percent. If the company executes on this front, it will definitely surpass its current record for annual sales of $250 million.
“I will be pleased if we could break $500 million,” says Rivas. “Then we’ll have finally grown up, and no longer be an adolescent.”
And let’s hope that is the legacy that Rivas leaves, because when you are approaching 30 you should have thrown off the exuberance of youth, and settled down into a pattern of earning a little more every year.
June 2010
www.compoundsemiconductor.net 29
Anadigics current CEO Mario Rivas (right) invited Ron
Rosenzweig (left) onto the stage for ringing the closing bell for the NASDAQ on 22 April 2010
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