Edit Metric
|
||||||||||||||||||||
Details
|
||||||||||||||
Xilinx has nearly all of its wafers, which are thin slices of semiconductor material, manufactured across seas in Taiwan and Japan, with some foundries in California. Xilinx also risks a loss if any other problems arise in these countries or with these suppliers, such as shipment issues. [3] Finally, Xilinx faces risk of additional competition; the benefits of the programmable logic market have been discovered and new competitors are being drawn and will be directly fighting for Xilinx's profits. [4] 
[edit] Company OverviewXilinx operates as a "fabless" semiconductor company, which means they do not own or operate any of the wafer-making facilities. Xilinx forms alliances with manufacturers so that it can concentrate its efforts on research, development, marketing, and technical support [5] [6] Xilinx is the current market leader in the production of PLDs and a manufacturer of ASICs, both programmable logic chips. A programmable logic device is an integrated circuit that can be programmed in a laboratory to perform complex functions. Besides PLDs, both companies also produce Application-Specific Integrated Circuits (ASICs), which are similar to PLDs in function but are custom-made for each client. So, generally, Xilinx's high-volume manufacturing customers purchase ASICs, while lower-volume manufacturing customers purchase PLDs.
[edit] Business and Financial MetricsXilinx's 2008 Market Cap (in millions) is at $5,830. We generally see a steady increase in revenue from 2006 to 2008, however Q1 and Q2 of 2008 were lower than the previous years. Overall, the company's total revenue increased from $1,726.3 million dollars in 2006 to $1,842.7 million dollars in 2007. However from 2007 to 2008, revenue decreased by $1.9 million dollars for a 2008 total of $1,840.8.  In July 2008, Xilinx reported earnings for its first quarter of fiscal 2009. It stated that management may be able to lower the ratio of operating expenses to revenue to 34% from 38%, and to do so cut 250 jobs [7]. Xilinx also reported a net revenue of 488.2 million dollars for this quarter. The company calls this record sales and says that their Industrial sector also reached a record level. [8] In October, 2008, Xilinx reported second quarter earnings for 2009. Revenue grew 9% from the second quarter of 2008, but was down 1% from Xilinx's first fiscal quarter [9]. Due to wireless growth, there was a 2% increase in Xilinx's largest end customer end segment, communications. Operating margins were at 25.8% [10]. [edit] Business Segments [edit] Communications (45% of Revenue in 2008)Xilinx's largest category, Communications, serves customers such as Cisco, Ericsson, and Motorola. Xilinx reported a year-to-year growth rate increase of 2% in this sector. From Quarter 4 of the 2008 Fiscal year to Quarter 1 of the 2009 Fiscal Year, the communications retained the same net revenue of 42%. [11] [edit] Consumer and Automotive (32%)For the automotive sector, Xilinx provides silicon and IP products for in-vehicle infotainment, comfort and convenience, gateway and driver assistance systems.[12] It supplies cost-effective products enabling for converged handsets, digital flat panel displays, and residential set top boxes. [13] Xilinx reported a year-to-year growth rate increase for this sector of 13%. From Quarter 4 of the 2008 Fiscal year to Quarter 1 of the 2009 Fiscal Year, the consumer sector dropped 1% in net revenue from 17% to 16%. [14] [edit] Industrial and Other (15%)This is a broad category covering aerospace, broadcast, scientific, medical, and industrial services.[15] Xilinx reported a year-to-year growth rate increase for this sector of 16%. From Quarter 4 of the 2008 Fiscal year to Quarter 1 of the 2009 Fiscal Year, the Industrial sector retained the same net revenue at 33%. [16]. [edit] Data Processing (8%)Xilinx reported a year-to-year growth rate increase for this sector of 17%. From Quarter 4 of the 2008 Fiscal year to Quarter 1 of the 2009 Fiscal Year, the Data Processing sector increased 1% in net revenue from 8% to 9%. [17] [edit] Key Trends and Forces[edit] Overseas Production Can Cause Shipment and Other IssuesXilinx does not produce its own wafers, or semiconductor synthesizing material. Instead, the company prides itself in strategically forming alliances with, usually overseas, manufacturers that produce the needed materials and ship them. There are many potential downfalls with this strategy, as any overseas subcontractors cannot be directly controlled. Any type of fallout, whether natural disaster, government policy, worker uprising, etc., affects shipments and supply. The company would need to find alternative sources for their materials which would be a huge setback. [edit] The Market is Seeing New CompetitorsThere are multiple benefits to programmable logic, and according to CANACCORD, people are beginning to notice. A number of new competitors have been attracted to the ASIC market, specifically in the PLD sector, which poses a threat to Xilinx. According to the Semiconductor Industry Association, programmable logic is now one of the fastest growing segments of the semiconductor business, and for the last few years, sales for PLDs have increased at a greater pace than sales for the overall semiconductor industry. [18] In 2005, the semiconductor industry made over 90 million transistors for every man, woman and child on Earth, and by 2010, this number should be 1 billion transistors. [19] Although they currently hold the majority of shares in the market, any profits these new companies make is revenue that had potential to be Xilinx’s, and the company may begin to see slower growth rates.
[edit] CompetitionXilinx's primary rival, Altera, held the top market share prior to 1998 however and both companies are in fierce competition, making the market essentially a duopoly. [20]. Although Xilinx currently holds the largest market share at 51%, Altera has been more efficient in their operational processes, and has reported excellent EBT margins that have surpassed XIlinx's over the past five years [21]. The semiconductor market is essentially a duopoly between Altera and Xilinx. Lattice comes in third holding 11% of the industry. Other, smaller, companies in the market are listed below: 
[edit] References
|
The Shelf
|
Edit
History
Bookmark
