Now #2 in power, On Semi aims for Infineon
The recent $2.4bn acquisition of Fairchild Semiconductor marked the end of the company’s second life as a power company as the company has been divided up by ON Semi. This has created a major player in power that is looking to take on market leader Infineon Technologies.
“What we think we have done is gone from a nobody in power to a strong number two so we changed the name of the group as 75% of it is now power, that’s $1.7bn,” said Bill Hall, Executive Vice President of the Power Solution Group. “We have about half of ON Semi’s revenue and that gives ON Semi a different meaning to our customers and the market.”
“We are the centre of the universe with the power switching so when a designer starts the project they look at what devices they need to use and build the rest of the stuff around it,” he said. ”For example, a laptop maker wanting the best in class product starts with the battery and moves to the adaptor to make the adaptor small and add a battery so they have extra space for the rest of the design.”
Fittingly for a deal around Fairchild Semiconductor, there is a lot of industry history. “I’m an ex-Fairchild guy and so is our CEO Keith Jackson – we worked together there in the 1980s. There was no better fit to what ON Semi already had, so from a business standpoint it made total sense – yes we have friends there and history there but it was business led.”
“Unlike other acquisitions where we left them alone for a couple of years, with this one, on day one we integrated them at the division level,” said Hall. “Below me I have five divisions, with business units some headed by Fairchild guys, and some by ON guys, so we can quickly be complementary so we are not going after the same things.”
Jackson joined ON Semi in 2002 from Fairchild, and Hall had been part of the spinout of Fairchild from National Semiconductor in 1997, joining Jackson in 2006 and running the Standard Products Group.
“From the standard products perspective, we were strategically adding pieces to the group,” said Hall. “Five to six years ago we were looking at where we could go in discretes – we decided to go with IGBTs but we wanted to do high performance devices for industrial and automotive and once we started that, a whole world of power started opening up for us – MOSFETS, modules, wide band gap technologies and we have started slowly putting together projects to do these things.”
Until the acquisition completed, Hall was Executive Vice President & General Manager of the Standard Products Group, and is now running the power group, highlighting the fundamental shift.
“Before the Fairchild acquisition we were around $1.2bn for the standard products group and power was around $400m,” he said. “We decided at that point we really wanted to be a big player in power – we knew it would take a while to develop those technologies and when Fairchild came on the market it was a perfect fit – they have the medium and high voltage MOSFETs and silicon carbide and were working on GaN, and they had integrated power modules. We were working on power integrated modules in alternative energy and factories so what looks like a bunch of acquisitions has a sense of purpose behind it. As a result, the way we filled in the acquisition, Fairchild makes us the #2 market share in power with Infineon being #1 but more importantly it gives us a portfolio that is every bit as competitive as Infineon’s.”
Rather than power management, with Analog Devices buying Linear Technology and Renesas buying Intersil, the focus is very deliberately on the power devices and modules. “If the part can burn your fingers it’s one of ours,” said Hall.
Around 30% of Fairchild was power management and that has been combined with the new analog solutions group. “The control element has been historically analogue and this is now going digital, so our colleagues in the analog group are developing those. It’s analogue for low end applications and digital for higher end UPS and netcom applications,” he said.
The other groups in ON Semi are essential for the power group.
“We have a systems solutions approach and work with colleagues for an end application,” said Asif Jakwani, General Manager of the High Power Division within the Power group (left). “It’s a lot more than just discretes – as you go into higher power applications the power modules are not one discrete device. Whether it’s a MOSFET, IGBT or wide bandgap, we cover the entire gamut. We play in all that – from the smallest power systems to 300A at 1700V,” he said.
This is moving the company up the design flow. “Then you get into a certain class of application such as an electric motor or an electric vehicle, what happens is the power switching components that we make end up being the centre of the entire design,” said Hall.
“Now there are disruptive technologies that are coming to bear with SiC and GaN and the beauty is that they switch so fast that you can reduce the size of the magnetics and all the devices that go around the device – we have shown you can put 100W in the form factor of an iPad adaptor – so even in the notebook and cellphone world there are incredible things going on.
“With GaN we had a strong programme, building our own epi and wafers and doing our own packaging. With SiC, through Fairchild we have our own epi and processing and are one of the first to have 6in SiC diode.”
“Of course we dabble with subcontractors to get into the market quickly and learn things but long term it has to be in-house – we outsource less than 15% of our manufacturing and the way you win is through good internal manufacturing where you can control quality and price. There are a lot of small modules makers that make PIMs but not the IGBT, and they sometimes become subservient to the foundries that produce the IGBT. We are dealing with big customers that want to buy the modules from the guy that produces the silicon.”
The move to modules is a fundamental shift in the power industry, say Hall and Jakwani.
“Today a lot of power circuits are built with discrete IGBTs and MOSFETs and in two to three years that will shift to modules so we see adding more module capacity as being a major initiative of ours,” said Hall. “For example, PIM modules have multiple in IGBTs for AC-DC solar inverter or DC-DC boost in solar batteries, and white goods need six IGBTs in a bridge, so we have all configurations of modules,” added Jakwani. “In future we see major growth hybrid EV. That is where the market is heading, more of a solution approach from packaging and where you have the gate driver fully optimised for a complete power train,” he said. “Now we are investing in 650 V using some unique packaging with dual sided devices.”
“We believe that in the long term there will be wireless charging for the EV as well and we have the complete solutions for the modules and control,” said Jakwani. “48V gets us into a much larger segment where we are already strong from the industrial market – we are fully engaged with a number of Tier One suppliers in discrete MOSFETs, wafer supply and modules for our customers.”
But the deal took almost a year to win approval, with the ignition IGBT business being sold to Littelfuse.
“What I would worry about is the long wait is certainly hard on employees so we are hoping we have retained most of the employees,” said Hall. “We hope that our customers don’t get confused about the strategy so now we have been able to go out to both customers and employees with the message that we are one company with a very strong complementary portfolio.”