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Components | September 17, 2012

Interview: Analog Devices on growth and innovation

Evertiq sat down with Dr. Carsten Suckrow, Analog Devices, Vice President, EMEA Sales, to talk about the company's plans for the future, growth markets and the importance of becoming a solution partner.
Suckrow thinks Analog Devices (ADI) is progressing nicely – particularly after the record year the company just experienced – earning three billion USD. The company hopes to continue this growth by investing in innovation. Roughly twenty percent of the company’s revenue is invested in R&D. “This is how we pitch ADI. We are a solution partner not a component partner anymore,” says Suckrow.

© ADI
“Over the last five years, whether there was a crisis or not, we have kept roughly an investment schedule of 500 million US dollars per year on the R&D side,” he says. With more and more complexity in the industry, customer engagement now requires the company to position itself as a high service, high value solution partner, says Suckrow.

Despite an economy that's seen its fair share of challenges recently, Europe was actually the largest growing business, percentage wise as well as absolutely, for the company in the last fiscal year.

From the outside this is somewhat surprising, given the everyday barrage of bad news stories we see on the European economy, but Suckrow says that a good industrial footprint has been a key to the regions success.

“It's very much linked to the very strong industrial footprint we have in Europe. I think after the financial crisis a lot of the thought processes in our customer base was again very much linked to the healthy discussion on how can you be innovative, how can you bring the next generation to the market, how can you make industrial solutions and industry products, the manufacturing process, more energy efficient”.

While Consumer products have shrunk from forty percent of the company's market share to twenty percent, three sectors in particular are growing in Europe: the automotive, communications and medical sectors have all been bright spots.

“We moved away from B2C toward B2B, which has the advantage of very stable long-term revenue streams. It fits to the ADI portfolio of having products which last very long on the markets, up to 30 years. And we have very nicely managed growth in those areas of communications infrastructure and automotive,” says Suckrow. “If you think of the most innovative companies in those two segments, it's all leading again to European customers, even Scandinavia customers”.

The automotive sector is being driven by a desire for more active passive safety and infotainment demand. In the communications industry it’s the “endless appetite for bandwidth,” as Suckrow puts it. At a certain point in time companies need to invest in the infrastructure and this where ADI comes in.

MEMS solutions are growing on the back of these industry demands. “We have just seen the tip of the iceberg for the MEMs business in industrial applications”. Vibration control is a great example of this he says.

The company predicts the European business will increase roughly by 7 percent over the next years spurred by these growth markets. Of course to succeed, Suckrow’s vision requires increased involvement between the customer and ADI – more like a partnership.

“My vision with a customer is that their lead architect is sitting with our industry expert. They sit in one room and on the white board they have a lively discussion about how they can design this complete signal chain”.

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