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Several years ago, National Semiconductor decided to channel its
efforts and resources into becoming an undisputed leader in the
high-value product areas of each of the Standard Linear Analog segments.
That decision is paying off in record margins, profits, market share
and returns on capital. In the category of "a picture is worth a
thousand words," I'll reduce this letter and its message to a variety
of charts and corresponding explanations that, not only record our
performance, but paint our future.
What is standard linear analog?
According to the Semiconductor Industry Association's World Semiconductor
Trade Statistics (SIA/WSTS), the analog
semiconductor market is divided into two areas: Application Specific
Standard Product Analog and Standard Linear Analog. Standard Linear
Analog, which now comprises about 75 percent of National's sales,
consists of four segments:
- Power Management. Also referred to as "Regulators and
References" by the WSTS, these devices are developed to maximize
the power efficiency of systems, so we can enjoy the longest possible
battery life in portable applications or consume the least amount
of energy when plugged into the wall. Over the years, many new features
have been added to electronics, with the mobile phone being the
best example: color displays, video and still camera, stereo sound,
and built-in camera flash. While we are all enjoying these additional
features, we also expect the run-times of these devices to increase.
High-performance power management enables these features to be added
with extended run-times and longer battery life.
- Amplifiers. Consisting of "general purpose," "high speed"
and "precision" varieties, amplifiers condition analog signals that
may have lost some of their intensity, volume or strength over time
and distance and boost those signals back to their original intensity
(or higher), so those signals can be read and handled without the
confusion of surrounding noise or interference. Or, in the case
of audio amplifiers, they take a tiny data stream off a cell phone,
CD, DVD or MP3 flash card and condition and elevate the signal to
drive speakers and headphones to generate sound with the volume,
clarity and quality of an auditorium concert.
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- Interface. These days, transmission of data of any kind,
seems to involve more and more bandwidth (such as HD video signals)
over longer and longer transmission lines. The role of interface
circuits is to ensure that the signal that gets sent is the same
as the one that arrives. Hence, these circuits deal with cleaning
signals and more powerful clocking schemes.
- Data Conversion. Data Conversion consists of circuits
like Analog-to-Digital Converters (ADCs) designed to convert real-world
analog signals into "zeros" and "ones" to facilitate the processing
of these bits by microprocessors or digital-signal processors (DSPs).
The data streams can be audio, video, heat, light, vibrations or
any other real world phenomena. After the zeros and ones (or "digital
bits") are processed, they are often converted back into analog
data streams by circuits known as DACs, or, you guessed it, Digital-to-Analog
Converters.
Why did National target standard linear analog?
- It's our heritage, our core competency.
- Increasingly, these circuits are used to differentiate today's
system products like cell phones, MP3 players, video games, displays,
instrumentation, automotive electronics, PDAs, etc.
- This is one of the fastest growing segments in the semiconductor
industry.
- These products allow us to obtain higher average selling prices
(ASPs) and gross margins.
- The standard linear market requires excellent circuit design,
outstanding packaging and process technology as well as superb
service, supply chain and logistics. National does extremely well
at all three.
- And finally, not very many companies can compete here.
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