In April 1983, several young semiconductor professionals walked into a rented office in Sunnyvale. They shared one vision and belief—that a ripe market existed for a well-managed, focused, and innovative supplier of high-quality analog and mixed-signal integrated circuits (ICs). They were convinced that the emerging digital revolution would augment that analog demand, since digital systems can communicate with each other and the outside world only through analog channels. That group of engineering professionals founded Maxim Integrated Products.
Twenty-five years later, nothing has changed the original vision. The tiny startup thrived and became a glamour brand in the semiconductor industry. Today, Maxim Integrated Products’ annual revenues are more than $2 billion, surpassing many longer-established competitors. Maxim has more than 10,000 employees in more than 20 countries, more than 50 offices worldwide, five wafer fabs, three test and assembly manufacturing facilities, and 35,000 customers.
Maxim’s business acumen and its decades-long history of semiconductor innovations evolved directly from the solid technical underpinnings of the company’s founders. The founding team included Jack Gifford, an industry pioneer since the 1960s; Fred Beck, an IC sales and distribution pioneer; Dave Bingham, General Electric’s Scientist of the Year in 1982; Steve Combs, a pioneer in wafer technologies and manufacturing; Lee Evans, also a pioneer in CMOS analog microchip design and General Electric’s Scientist of the Year in 1982; Dave Fullagar, inventor of the first internally compensated operational amplifier circuit; Roger Fuller, yet another pioneer in CMOS microchip design; Rich Hood, development director for some of the first microprocessor-controlled semiconductor test systems; and Dick Wilenken, who is acknowledged as the father of key analog switch and multiplexer technologies.
Buoyed by the reputations of its startup team, Maxim presented a barebones, two-page business plan and obtained $9 million in venture capital. Success was by no means assured. Maxim was confronting large, well-established competitors. However, many of them had turned their attention from analog circuit design to digital products. (Time has shown, convincingly, that analog “building block” components remain critical elements in all electronic designs.) Maxim’s technical innovations and business took off.
From its inception through today, Maxim has emphasized aggressive new product development as a cornerstone of business strategy. The early team introduced 24 second-source products in 1984. One year later, Maxim transitioned to designing proprietary products—those that cannot be imitated easily and will not become commodities over time. CEO Gifford challenged the team to produce at least 15 new products each quarter—an aggressive pace for a small company. Maxim’s succession of award-winning innovations began in 1985 with a monolithic AC/DC converter that won EDN magazine’s Innovation of the Year award. Maxim established its first overseas office in the United Kingdom that year. In 1986, Maxim’s fortunes took a big leap forward with the introduction of the MAX232. This innovative product established the single-chip, single supply-voltage RS-232 serial interface market and helped fuel the portable electronics revolution by enabling easier use of the RS-232 standard in low-voltage, low-power devices. The commercial success of the MAX232 catapulted Maxim’s business and solidified the company’s reputation as a technical leader. Maxim posted its first profitable fiscal year in 1987 and went public in 1988.
Maxim grew steadily over the years. As it rapidly expanded during the 1990s, many sales offices and design centers were added throughout Europe and Asia. Offices continue to be established in emerging markets, and Maxim now operates more than 30 design centers and 20 sales and applications offices worldwide. Annual revenue reached $500 million in fiscal year 1998 and now surpasses $2 billion. Maxim exhibited a 14 percent compound annual growth rate (CAGR) from fiscal years 2002 to 2007.
Through the years of cyclical downturns and “busts,” Maxim remained consistently profitable by selling to a broad portfolio of markets and regions and by managing business carefully. The bursting of the dot-com bubble impacted some of Maxim’s business in telecom infrastructure, but strong sales into areas such as notebook power management and cell phones sustained the company’s historically high profitability.
Today, the average proportion of overall revenue generated by each of Maxim’s end markets is only 4.7 percent, and no one market represents more than 18 percent. Maxim has always practiced aggressive cost management with a company-wide aversion to waste. The result has been remarkable business stability when other companies are forced to make major cutbacks.
Maxim has historically eschewed a strategy of growth through acquisition. Nonetheless, the company has made a modest number of strategic acquisitions that gained a mature technology, manufacturing capacity, or experienced engineering talent. Maxim purchased its first wafer fabrication facility (fab) in 1990 in Sunnyvale. A second fab was acquired in Oregon in 1994. Other fabs were acquired in San Jose in 1997, and in both San Antonio and Irving, Texas in 2003 and 2007, respectively. The acquisition of Dallas Semiconductor in 2001 brought valuable expertise in digital design, as well as an additional fab. The storage products division of Vitesse was purchased in 2007. That same year, Maxim entered into its first joint operating agreement with Seiko-Epson for that company’s wafer fab in Sakata, Japan.
Maxim opened its own test manufacturing operation in Cavite, Philippines in 1997, and opened a second such facility in Thailand in 2000. In 2006, Maxim built its first in-house assembly facility in Batangas, Philippines. All of this growth ensures that Maxim has the manufacturing capacity to meet customers’ ever-increasing demand for its products.
Analog circuits bridge the gap between the real world of signals and the digital world of zeros and ones. Innovative analog and mixedsignal designs have produced significant advances in the performance, features, size, accuracy, reliability, portability, and power efficiency of electronic equipment. The revolution in handheld personal electronics, for example, would have been impossible without a host of new analog designs, many from Maxim.
World-class analog design is a fusion of craft and science—something one learns only by experience and working with the top designers. Given the history of Maxim’s founding pioneers and their focus on new products, it is no surprise that the company remains focused on recruiting the best and most experienced engineers in the world. To that end, Maxim’s burgeoning array of worldwide design centers taps the pools of technical talent found near academic and industrial centers.
Through the years, many legendary designers have thrived in Maxim’s atmosphere of well-managed creativity. A rigorous product-selection process ensures that time and resources are channeled only to projects with the best chance of success. So Maxim’s engineers enjoy the satisfaction of seeing their creativity and inventions built into the electronic devices of major world brands. One need only review the annals of the industry’s trade press to find a long list of Maxim’s award-winning products and engineers. Maxim has consistently invested in process technology R&D as an important step in developing hard-to-imitate, proprietary products. The company’s huge assortment of proprietary fab processes provides its design engineers with combinations of performance and functionality unavailable to competitors. Possessing such a broad range of technologies also gives Maxim independence from contracted “foundry” fabs, which cannot provide the variety of processes or the performance specifications required for the company’s wide array of product lines.
Maxim offers more than 5,400 products across 70 product lines. The company remains committed to developing high-performance buildingblock or single-function ICs, but is devoting an increasing proportion of its resources to highly integrated, mixed-signal products—ICs that combine multiple analog and digital functions normally accomplished by several chips. High integration offers customers space savings, less design work, and lower costs. Today’s products enable a broad range of end-applications in 20 different markets, which include automatic test equipment; automotive products; cellular base stations; consumer electronics; computing, peripheral, and storage devices; financial terminals; home entertainment equipment and “white goods”; industrial and medical instrumentation; measurement devices; networking and data communications; set-top boxes; and telecommunications equipment.
A strong focus on technology only gets a company so far if it does not also place strong emphasis on customer relationships. Maxim’s applications engineers work in close partnership with customer engineers, helping them select and apply Maxim’s products and also collaborating on future product development. Maxim is thus not merely a supplier—it is a technology partner. This focus on customer needs also explains the company’s investment in additional manufacturing capacity to ensure that customer demand is met.
In January 2007, Tunç Doluca became Maxim’s second CEO. Doluca has pledged a commitment to strong growth and industry leadership, on-time delivery, quality, and customer relationships. He has placed particular emphasis on several areas: enhanced manufacturing capacity and reduced cycle time; the scalability of Maxim’s internal infrastructure; optimal deployment of the sales force; enhanced empowerment of the business unit executives; and enhanced collaboration among business units to serve markets and customers most efficiently. Doluca’s programs and initiatives continue to support Maxim’s original vision—participate in all major markets; innovate and add value; “layer-in” new opportunities; be the lowcost producer; avoid commodity products; and be the technology leader.
On any employee’s wall hangs a list of the 13 Maxim Principles. Pragmatic guidelines to individual and group success, the Principles permeate the company’s environment and guide all aspects of work. Maxim encourages a collaborative team environment since many individuals and groups must work together smoothly and productively. So, while creativity and technical expertise are significant, personal character, dedication, and drive—the tenets of the Principles—are equally important.
When asked what they appreciate most about Maxim’s culture, employees often cite the high degree of autonomy they are given and the opportunities to take on greater responsibility and advance. Maxim places a strong emphasis on personal initiative, independent thinking, mentoring, and innovation. It is thus no surprise that motivated, energetic individuals quickly assume leadership roles.
Maxim also recognizes that the happiest, most productive, and fulfilled employee enjoys a healthy balance between work and home life. Maxim offers a variety of wellness opportunities (including biannual health screenings for employees and spouses and flu shots), sports teams, company social events, and discounts to local events and services. Maxim also offers a comprehensive and competitive benefits package, including broad-based employee equity ownership opportunities, an employee-matching 401(k) plan, health and dental insurance plans, long-term care plans, life insurance, and flexible spending accounts.
Doluca says, “Maxim has introduced more than 5,000 products to date and is highly regarded all over the world. Our commitment to innovation and our culture of continuous improvement and excellence are extremely attractive to talented people who want to see their work yield tangible results and who enjoy working among other bright, energetic, and motivated people. We rely on such people for our continued success and provide them with an environment where they can excel in their individual careers, assume leadership roles quickly, and contribute materially to the company’s success.
Maxim’s revenues doubled in the last five years, and that success is not an accident. It is the result of intelligent planning, dedication, focus, a relentless desire to win, and a refusal to accept the status quo. At Maxim, we are engineering success.”