Semtech Overview (cont'd)
Semtech is a leading supplier of analog and mixed-signal semiconductor devices (often called integrated circuits or ICs) used in a wide variety of computer, communication and industrial applications. The company is based in Southern California, specifically Camarillo, California.
Semtech considers itself a people intensive company, not a capital intensive one. Strategic emphasis is placed on design and applications talent needed to develop leading edge, proprietary products. Most of the company's manufacturing is outsourced to third party wafer foundries and sub-contractors. Semtech has sales, design and applications locations throughout the United States, and in the United Kingdom, France, Germany, Switzerland, Taiwan, Korea, Japan, and China.
Over the last ten years, Semtech has experienced significant financial success. For the ten-year period ended January 30, 2005, net sales had grown at a 22% compounded annual growth rate (CAGR). Net income for this same ten-year period grew at a 44% CAGR. The fiscal year ended January 30, 2005 represented Semtech's 18th consecutive year of positive operating cash flow. Semtech had approximately $275 million in cash and investments, and no long-term debt, as of January 25, 2004.
Background – Semtech was incorporated in 1960 and went public in 1967. The company was originally focused on serving the military and aerospace markets. With its reputation for quality and reliability, Semtech transitioned to the commercial marketplace in the early 1990's.
Why Analog? – As digital advancements drive demand for electronics, the need for analog and mixed-signal ICs designed to bridge the gap between digital circuits and the real world grows. Digital semiconductor suppliers tend to rely heavily on process technology to remain competitive. Analog and mixed-signal is more reliant on design and applications. The analog industry has several unique characteristics: fragmented end-markets, longer product lifecycles, and less capital intensive than digital.
Strategic Acquisitions – Several acquisitions have strengthened Semtech's product portfolio and access to technology. In June 2005, Semtech acquired XEMICS SA, a Swiss-based developer of ultra-low power analog, radio frequency and digital integrated circuits aimed at adding value in highly integrated battery powered wireless and sensing applications. XEMICS’ revenue stream comes from a portfolio of standard and custom products that are used in battery powered applications, remote metering, embedded systems and medical devices. Semtech has made additional acquisitions in the past. In October 1997, Semtech acquired Edge Semiconductor, a leading supplier of proprietary semiconductors used by the world's top automated test equipment (ATE) manufacturers. In April 1998, Acapella Limited was acquired for its design expertise in complex communication ICs. Finally, USAR Systems was acquired in December 1999 for its human input devices (HID) and system management circuits used in portable systems.circuits used in portable systems.