Product portfolio rationalization for semiconductor chips

Abstract

Cilia Semiconductors was founded in 1982. As of 2011, it was a US $973 million company with around 3600 employees. It is primarily in the semiconductor business and its competitors are mainly Microchip Technology, Integrated Device Technology, Samsung Electronics and Xilinx. Headquartered in California, it is a small company which believes in lean workforce and high gross margins (>50% gross margin). Cilia has offices worldwide and has wafer fabs in 2 locations, direct sales office in 32 locations, representative sales office in 149 locations and customer design centers in 14 locations. The Indian site is a non-manufacturing mega site. Cilia also provides end to end experiment on kits, the forecasting of which is based on market demands. Recently, they are moving towards flexibility and maximum resource utilization. Currently, they are manufacturing 40% in-house and 60% through outsource. They plan to increase the outsourced manufacturing to 80% in the coming years. Cilia has many divisions –some of which are Memory Product Division, Data Communications Division and Programmable Solutions. The Memory Product Division is stable in nature and Cilia is aiming to improve the existing business. Programmable Solutions incurs the highest R&D expenditure and brings revenue in high volumes if successful. Lastly, Data Communications Division (DCD) has a telecom and a USB division within it. Our project majorly focuses on the USB division of DCD.