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Company Profile of Xilinx
Company Profile of Xilinx - May 14th, 2011
Xilinx, Inc. (NASDAQ: XLNX) is a supplier of programmable logic devices. It is known for inventing the field programmable gate array (FPGA) and as the first semiconductor company with a fabless manufacturing model.
Founded in Silicon Valley in 1984, the company is headquartered in San Jose, California, U.S.A.; Dublin, Ireland; Singapore; and Tokyo, Japan. The company has corporate offices throughout North America, Asia and Europe.
Xilinx was founded in 1984 by two semiconductor engineers, Ross Freeman and Bernard Vonderschmitt, who were both working for integrated circuit and solid-state device manufacturer Zilog Corp.
While working for Zilog, Freeman wanted to create chips that acted like a blank tape, allowing users to program the technology themselves. At the time, the concept was paradigm-changing."The concept required lots of transistors and, at that time, transistors were considered extremely precious – people thought that Ross's idea was pretty far out", said Xilinx Fellow Bill Carter, who when hired in 1984 as the first IC designer was the company's eighth employee.
Big semiconductor manufacturers were enjoying strong profits by producing massive volumes of generic circuits. Designing and manufacturing dozens of different circuits for specific markets offered lower profit margins and required greater manufacturing complexity. What became known as the FPGA would allow circuits produced in quantity to be tailored by individual market segments.
Freeman failed to convince Zilog to invest in creating the FPGA to chase what was only a $100 million market at the time. Freeman left Zilog and teamed up with his 60-year-old ex-colleague Bernard Vonderschmitt to raise millions in venture funding to design the first commercially viable FPGA. The company was incorporated in 1984 and began selling its first product by 1985.
By late 1987, the company had raised more than $18 million in venture capital (worth approximately $33 million in 2010 dollars adjusted for inflation) and generated revenues at an annualized rate of nearly $14 million.
Xilinx, Inc. designs, develops, and sells advanced programmable logic devices and related software development systems. It is the leading global supplier of programmable logic. In essence, the company's customized chips sequentially order the logic that tells sophisticated electronic gear the order in which its functions are to be performed. Xilinx bolted to the forefront of its industry during the late 1980s and early 1990s through breakthrough product innovations.
Xilinx, Inc. (Xilinx), incorporated in February 1984, designs, develops and markets programmable platforms. These programmable platforms have components that include integrated circuits (ICs) in the form of programmable logic devices (PLDs); software design tools to program the PLDs; targeted reference designs; printed circuit boards, and intellectual property (IP) cores. In addition to its programmable platforms, Xilinx provides design services, customer training, field engineering and technical support. In January 2011, the Company acquired AutoESL Design Technologies, Inc.
Xilinx’s PLDs include field programmable gate arrays (FPGAs) and complex programmable logic devices (CPLDs) that the customers program to perform desired logic functions. The products are designed to provide integration and time-to-market for electronic equipment manufacturers in end markets, such as wired and wireless communications, industrial, scientific and medical, aerospace and defense, audio, video and broadcast, consumer, automotive and data processing. It sells the products globally through independent domestic and foreign distributors and through direct sales to original equipment manufacturers (OEMs) by a network of independent sales representative firms and by a direct sales management organization. The FPGA products include Virtex-6, Virtex-5, Virtex-4, Virtex-II Pro, Virtex-II, Spartan-6, Spartan-3A, Spartan-3E, Spartan-3 and Spartan-IIE. The CPLD products include CoolRunner-II.
The Virtex-6 FPGA family consists of 13 devices and is the sixth generation in the Virtex series of FPGAs. There are three Virtex-6 families: Virtex-6 LXT FPGAs, Virtex-6 SXT FPGAs and Virtex-6 HXT FPGAs. The Virtex-5 FPGA family consists of 26 devices in five product families: Virtex-5 LX FPGAs for logic-intensive designs, Virtex-5 LXT FPGAs for logic with serial connectivity, Virtex-5 SXT FPGAs for DSP with serial connectivity, Virtex-5 FXT FPGAs for embedded processing with serial connectivity and Virtex-5 TXT FPGAs for high-bandwidth serial connectivity. Prior generation Virtex families include Virtex-4, Virtex-II Pro, Virtex-II, Virtex-E and the original Virtex family.
The sixth generation in the Spartan FPGA series, the Spartan-6 FPGA family, is fabricated on a low-power 45-nm process technology. It consists of 11 devices in two product families: Spartan-6 LX FPGAs, which is optimized for applications needing the lowest cost, and Spartan-6 LXT FPGAs, which is optimized for applications that require LX features plus 3.125G serial transceivers. Spartan-3 FPGAs are 90-nm FPGAs and include the original Spartan-3 family, the Spartan-3E family and the Spartan-3A family. Prior generation Spartan families include Spartan-IIE, Spartan-II, Spartan XL and the original Spartan family.
CPLDs operate on the low end of the programmable logic density spectrum. CPLDs are single-chip; nonvolatile solutions characterized by universal interconnect. Prior generations of CPLDs include the CoolRunner and XC9500 product families.
EasyPath FPGAs use the same production masks and fabrication process as standard FPGAs and are tested to a specific customer application. The generation of EasyPath FPGAs includes EasyPath-6 FPGAs.
The Company competes with Altera Corporation (Altera), Lattice Semiconductor Corporation (Lattice) and Actel Corporation (Actel).
As Xilinx was earning respect for its FPGA technology, the market for application-specific circuits continued to grow during the late 1980s and into the 1990s. The result was that the market for FPGA chips surged, contributing to rapid revenue and profit growth at Xilinx. Indeed, sales rose to nearly $30.5 million in 1988 (fiscal year ended March 30, 1989) before rising to $50 million in 1989. Xilinx posted its first surplus--a net income of $2.92 million--in 1988 and went on to generate profits of $6 million in 1989. Unfortunately, Freeman died in 1989. Vonderschmitt took the reins as president and chief executive.
Xilinx was aided during the late 1980s by a partnership with Monolithic Memories Inc. (MMI), which in 1987 signed a deal with Xilinx that gave MMI royalties and free patent rights to manufacture Xilinx's products. In return, MMI supplied capital to Xilinx. The arrangement provided needed funding to bring Xilinx's products to market and sustain its research and development initiatives. Soon after signing the deal, though, MMI was purchased by American Micro Devices, Inc. Xilinx became uncomfortable with the new arrangement, partly because American Micro was one of its competitors. So, in 1989 Vonderschmitt convinced American Micro to buy 20 percent of the company at a ten percent premium and dissolve the original agreement. In search of new funding, Xilinx went public with a stock offering on the NASDAQ over-the-counter exchange.
With cash from the stock sale, Xilinx continued to grow. By late 1990 the company was selling its products throughout the United States, but was also shipping about 30 percent of its output overseas. More than half of its revenues were attributable to its popular XC3000 family of FPGA systems, but Xilinx had a stream of products in its development pipeline. The company sold nearly $100 million worth of its products in 1990, and its base of 3,500-plus customers grew to include big names like Apple Computer, IBM, Compaq Computer, Hewlett-Packard Co., Fujitsu, Sun Microsystems, and Northern Telecom. To keep pace with demand, Xilinx moved into a 144,000-square-foot plant in San Jose, California.
Although Xilinx rapidly increased sales and profits in the late 1980s and early 1990s, it also ceded much of its market share. Indeed, after Xilinx had invented its niche and controlled 100 percent of the FPGA market during the mid-1990s, other companies began offering competing technology that rapidly eroded Xilinx's dominance. By the early 1990s, in fact, Xilinx was controlling only about 65 percent of the total FPGA market. It had succeeded, though, in pressuring many of its earliest competitors out of the business, despite the fact that some of them had access to much more funding. By 1993 only a few companies were seriously vying for market share. The largest was Actel, which had introduced its first product in 1988 and by 1993 was serving about 18 percent of the market. The distant third-place contender was Altera, which sold technology similar to FPGA systems.
Despite loss of market share, high demand allowed Xilinx to boost revenues to $135 million in 1991 (fiscal year ended March 30, 1992) and then to $178 million in 1992. Part of that growth resulted from Xilinx's jump into the market for EPLDs (EPROM technology-based complex Programmable Logic Devices), which effectively offered higher performance and higher density per chip, and were designed to complement FPGA devices. By 1993 Xilinx was capturing more than $250 million in annual revenue and generating net income of $41.3 million. In addition, market growth for FPGA chips was expected to intensify in the mid-1990s.
To take advantage of market expansion, Xilinx introduced a completely new line of FPGA products in 1994: the XC5000 family of FPGA chips and software. The XC5000 line was developed to cater to the market for low-end gate array products. Specifically, XC5000 chips were designed to offer a cost-effective alternative to high-volume non-field-programmable gate array products, thus giving Xilinx access to a new spectrum of the market for application-specific circuits. Xilinx followed the introduction of the XC5000 family with other new products, including the XC3100L and XC4000L. Both new families of FPGA chips were designed to complement low-power applications, which boosted Xilinx's access to manufacturers of increasingly popular low-power devices like portable computers and related peripheral devices, portable and wireless communication gear, and digital cameras.
New products and healthy demand growth for existing FPGA chips helped Xilinx to boost its sales to $335 million in 1994, a record $59.28 million of which was netted as income. Likewise, revenues rose to about $550 million in 1995 (fiscal year ended March 30, 1996). By that time, Xilinx was employing more than 1,000 workers in offices throughout North America, Asia, and Europe. The company was selling more than 40 varieties of programmable logic products and related software applications and continued to be firmly entrenched as the leader in its industry niche.
Early in 1996 Vonderschmitt stepped down as chief executive of the company he had cofounded 11 years earlier. Vonderschmitt remained as chairman of the board, but handed control of the company to Willem P. "Wim" Roelandts. The 51-year-old Roelandts had worked for 28 years at Hewlett-Packard Co., serving as senior vice-president and managing the company's Computer Systems Organization, among other posts. He was known as a seasoned high-tech industry veteran and was chosen to lead Xilinx into a "new era of growth," according to Vonderschmitt.
Principal Subsidiaries: NeoCAD, Inc.; Xilinx K.K. (Japan).
Market Cap (Mil.): $9,385.12
Shares Outstanding (Mil.): 261.06
Annual Dividend: 0.76
Yield (%): 2.11
XLNX.O Industry Sector
P/E (TTM): 15.04 120.33 27.48
EPS (TTM): 85.58 -- --
ROI: 19.45 6.12 16.09
ROE: 28.31 6.35 17.67
Sales: $550 million (1996)
Stock Exchanges: NASDAQ
SICs: 3674 Semiconductors & Related Devices; 7372 Prepackaged Software
Name Age Since Current Position
Philip Gianos 60 2009 Chairman of the Board
Moshe Gavrielov 55 2008 President, Chief Executive Officer, Director
Jon Olson 56 2006 Chief Financial Officer, Senior Vice President - Finance
Frank Tornaghi 55 2008 Senior Vice President - Worldwide Sales
Vincent Ratford 58 2008 Senior Vice President - Worldwide Marketing
Victor Peng 50 2008 Senior Vice President - Programmable Platforms Development
Vincent Tong 48 2008 Senior Vice President - Worldwide Quality and New Product Introductions
Raja Petrakian 46 2009 Senior Vice President - Worldwide Operations
Scott Hover-Smoot 55 2007 Vice President, General Counsel, Secretary
John Doyle 79 1994 Director
William Howard 68 1996 Director
Jerald Fishman 65 2009 Director
Elizabeth Vanderslice 46 2000 Director
J. Michael Patterson 64 2005 Director
Marshall Turner 69 2007 Director
2100 Logic Drive
San Jose, California 95124
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