By Ritsuko Ando and Peter Henderson
NEW YORK (Reuters) - National Semiconductor Corp (NSM.N: Quote, Profile, Research, Stock Buzz) Chief Executive Brian Halla said on Monday he expects consolidation in the analog chip industry, particularly among second-tier players.
In a wide-ranging conversation at the Reuters Global Technology, Media and Telecoms Summit in New York, he said that his company was taking investment risks in a series of bids in emerging technologies including solar energy.
Analog chips are critical in translating sound, temperature, light and other real-world phenomena into the ones and zeros that comprise digital computer language. The need for analog chips has grown alongside demand for multimedia consumer gadgets, like digital music players and advanced cell phones.
Halla said that his company has always had an appetite for smaller analog companies and "you'll continue to see a lot of that." He did not name any specific acquisition targets.
"I think there will be consolidation, primarily of some of the smaller, second-tier companies," he said. "I think that as there becomes more and more interest in the analog sector, and as there are more and more touchdowns being scored in value-added analog circuits, it will increase this kind of activity."
Halla differentiated second-tier players from the top five: Texas Instruments Inc (TXN.N: Quote, Profile, Research, Stock Buzz), National Semiconductor, Maxim Integrated Products Inc MXIM.PK, Linear Technology Corp (LLTC.O: Quote, Profile, Research, Stock Buzz) and Analog Devices Inc (ADI.N: Quote, Profile, Research, Stock Buzz).
"There are basically five of us that have been around forever and will be around forever," he said.
NEW TECHNOLOGIES
Halla also said old-line Silicon Valley companies needed to learn new games. Nat Semi is putting research money into projects from microchips that could potentially test for breast cancer and blood clots to an instant charger for a cell phone.
More immediately, it plans to announce a solar power strategy in about two weeks.
Alternative energy such as solar power is hot in Silicon Valley, where funding for new ideas is available and technology companies are finding their products adaptable to the new market.
So far National Semiconductor has no solar business. But Halla said he dreamed of solar accounting for a quarter of the company's revenue.
"Oh I certainly hope so," he said, when asked if such a percentage of revenue from solar was possible. "That would be a fantasy fulfilled of mine, but I'd like to see that in the next couple of years. We made a major bet on it and I think we've got some winning technology."
Halla cautioned that the technology, dubbed "Solar Magic" was just beginning field trials and was six months away from certification. "We'll see what kind of a response we get," he said.
Halla declined to give many details of the project, which National Semiconductor expects to announce with field test partners in a couple of weeks. Continued...
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