A wire-service announcement on Tuesday night caught John Walko's eye: Intersil is selling its wireless components business to DSL chipmaker, GlobespanVirata, for 380-something million. It caught my eye too. Some analysts project that the 802.11 chip market, already crowded with wannabes crafting do-everything g-version chip sets, will send wireless LAN margins to the toilet. Say what you will about the wireless LAN market, Intersil was promoting its spread-spectrum direct sequence 11-Mbits/s chipset when wireless wasn't even on Intel's radar. Intersil was a player in this WLAN components market, and it came as a great surprise to think that Intersil would give it up.
“We want to concentrate on high performance analog,” Intersil's marketing vice president, Chris Henningsen told EBN's Crista Souza and me. The wireless LAN activity was a fundamentally different business, closer to an ASSP (application specific standard products) model, he explained. Like other custom circuits businesses, you're dependent on a very small number of customers. You need to cultivate IP for up-integration (including a microprocessor skill set). You need access to the most advanced CMOS and BiCMOS processes. The analog components business, in contrast, concentrates on lower-level building blocks, with multiple markets and a diverse customer base. As with Pentium voltage regulators, it's a business that Intersil feels it can lead and not just play in. I accept what Henningsen said, but there remains a part of me – given Intersil's history – that is not completely at rest.
Intersil, now headquartered in Palm Bay, Florida, was originally based in Cupertino, California. Its forte was capacitive charge pumps and integrating A/D converters (the kind used for panel meters with seven-segment digits). Jack Gifford and engineers like Dave Fulligar took this technology with them when they founded Maxim Integrated Products, which now (with about one billion in revenues) is the world's 7th or 8th largest shipper of analog and mixed-signal parts.
When the remains of the Cupertino company merged with RCA Semiconductor (in Somerville, NJ) under the GE Semiconductor umbrella, the Intersil name disappeared. Apart from military products, that company's business was commodity linear, logic and power components (including diodes and transistors in TO-3 cans). When GE spit out its semiconductor business, the entity became Harris Semiconductor, and promoted its expertise in power.
Each name change and shift in product focus was accompanied by a considerable fanfare. Harris used its expertise in switchmode, for example, to build a Class-D audio amplifier, and promoted itself as the only company that could offer you all components in a digital amplifier chain from the pulse-width-modulator to the speaker drivers. It was indeed one of the best-sounding audio amplifiers I had ever heard. I said as much in a trade magazine column, and Harris re-printed my review on their web site. Then, they quietly sold the audio amplifier business to a German consumer firm.
Intersil, the name re-adopted after Harris Corp. spun out the semiconductor business, promoted its expertise in power transistors, a legacy from RCA (combined with new investments in manufacturing): Tremendous economies of scale, the promotional line went. We're the only company manufacturing power transistors on 8-inch wafers. Then: they sold THAT business to Fairchild.
That Intersil is serious about analog and power management, there is little doubt: Intersil BOUGHT PowerSmart, the Duracell spinout that helped invent battery-monitoring technology. Intersil BOUGHT Elantec, a player in the high-speed amplifier business (and one of the few companies out there with a blue laser driver).
But, given this history of coming together, re-packaging business units, and breaking them apart, one might wonder whether the professed concentration on high performance analog isn't just the “technology de jour.” Whether Intersil will once again reposition itself when (say) wireless broadband or digital television takes off. Or whether the company might be deliberately compressing itself to look like a more attractive takeover target.
But then there a few modulated success stories associated with pioneering companies who've renamed themselves, expanded their business activities, pulled themselves apart, taken back their original name and pieced themselves back together – as well as (shall we say) a number of “works in progress.”
Fairchild Semiconductor, the great granddaddy of Silicon Valley heavyweights like AMD and National Semiconductor -the inventor of the single-chip op amp – was considered a vanity purchase when National's president Charlie Spork (himself a Fairchild alumnus) acquired the company from Schlumberger in the 1980's. Under Brian Halla (who thought continuously about SoC integration), National saw no use for a commodity logic supplier and helped spinout the company. Fairchild's management quickly saw that its commodity logic business would be supported by a one-stop-shopping approach – one that included analog and power – and started buying up other companies, turning itself back into an analog powerhouse. It may feel these days like an evil sister to National (“Take THAT, Mr. Halla.”)
In addition to companies, this Intersil deal also reminds me of a Kurt Vonnegut short-story about a romantic couple – amateur thespians – who would absolutely dazzle their community on-stage. Out-of-the-footlights, the naturally tongue-tied couple found that they could not talk to each other unless someone handed them a script. The title of the story was what they'd ask each time an enterprising producer would come to them for another play: “Who are we THIS time?”