In the early 1980s, when digital semiconductor technology was rapidly supplanting traditional analog technology, pundits began saying that digital circuits would eventually replace analog circuits in almost all applications. As a result, many universities rolled back analog design courses and started replacing them with digital courses.
Fast forward to 2021, and industry observers call Analog Device Inc.’s acquisition of Maxim Integrated Products an indication of the red-hot analog chip market.
While it seems a bit ironic, in all fairness, the proponents of digital technology were correct in predicting that digital circuits would quickly overshadow analog circuits and replace the older technology in most applications. At the same time, however, companies like Maxim Integrated were right in their belief that the aggregate sales of analog chips would rise in the wake of huge semiconductor industry growth.
Maxim Integrated Products was founded in April 1983 on the premise of developing advanced analog chips that could interpret real-world physical properties such as temperature, voltage and sound, and then transfer that information to a digital chip for processing.
Several Intersil employees, led by Jack Gifford, left the General Electric subsidiary and joined with a few other entrepreneurs to incorporate Maxim Integrated Products (Figure 1). The upstart began its journey with a two-page business plan and $9 million in venture capital.
Figure 1 Jack Gifford is pictured at Maxim’s first office along with other members of Maxim’s founding team.
The new company began producing second-source chips while spending the first two years trying to develop marketable chips. In 1985, Maxim unveiled its first proprietary chip, MAX600. Then, in 1987 came the first major breakthrough.
A group of engineers at Maxim noticed that designers have to buy a driver from Motorola to create an RS-232 interface. Here, for these drivers to meet the RS-232 standard, they had to be powered off of ±12-V rails because that’s what the interface standard required. Therefore, interface designers ended by ended up with two power rails: ±12 and ±15.
Maxim’s idea was to develop an integrated RS-232 chip, which takes 5 V, uses one charge pump to increase the 5 V to 10 V, and then uses an inverter to create a –10-V rail while adding an integrated driver on the same chip. The MAX232 single 5-V powered line driver and receiver designed for the RS-232 interface was an instant success; it also led to the pioneering work on system-level analog integration (Figure 2).
Figure 2 MAX232, a single-chip solution, was a pioneer in analog system-level integration.
Besides analog design innovation, what kept Maxim going during all those years was its savvy manufacturing strategy. The company kept the production cost relatively low by producing most of its parts using somewhat dated manufacturing facilities. In 1989, Maxim became a manufacturer when it bought a wafer fabrication plant from the bankrupt Saratoga Semiconductor for a mere $5 million.
In the 1990s, Maxim started focusing on the high-end, linear-technology niche, where it had only one major competitor, Linear Technology Corp., which is now part of ADI as well. The 1990s also mark the beginning of Maxim’s another strength: the well-thought-out acquisitions. In 1994, for instance, the company acquired the IC division of Tectronix, which led Maxim to wireless and fiber-optics communications businesses. More importantly, Tectronix’s wafer fabrication facility helped Maxim bolster its manufacturing prowess.
Maxim has been an attractive acquisition target for many years. In 2016, the trade media was abuzz about bids to acquire Maxim from Texas Instruments and ADI. One of the reasons for Maxim being a hot acquisition target has been its more application-specific components. ADI has specifically highlighted its application-focused power management in explaining how Maxim products complement ADI’s broad components portfolio.
Maxim’s razor-sharp focus on the right markets such as automotive and data center and savvy manufacturing strategy kept it immune to the worst industry slowdowns. That’s been sufficient in its 38-year long journey. However, things seem to change in the analog and mixed-signal business, which is now required to be nimbler than ever. ADI’s bid to acquire Linear Technology a few years ago is a case in point.
Majeed Ahmad, Editor-in-Chief of EDN and Planet Analog, has covered the electronics design industry for more than two decades.
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