How Nexperia plans to reach $10bn
Nick Flaherty talked to Chris Boyce, marketing and product group director at Nexperia about the company’s ambitious plan to reach a turnover of $10bn by 2030.
The plans follow a bumper year but the plans will require significant investment in capacity. A rule of thumb used in the industry by companies with a mix on mature in-house and foundry capacity is that $1bn investment in capex drives $1bn of additional revenue. This would require investment of around $8bn over that eight year timeframe, says eeNews Europe.
The Dutch company, owned by Wingtech Technology of China, is bringing its first 300mm fab online by the end of the year in Shanghai, providing a key boost to capacity. This is alongside a new 200m line at its fab in Manchester UK and investment in its fab in Hamburg, Germany. The company has already seen $1.5bn in investment in capacity since 2018, but much more investment will be needed to meet the ambitious plans. The Shanghai fab is an additional investment by Wingtech’s controlling shareholder, at RMB 12 billion ($1.85 billion).
Finding people is also a key requirement, and the company is boosting its research and development teams across Europe, the US and China, setting up in the same locations as its competitors.
“We ended up in excess of $2bn in 2021 which was a 49% year on year growth. The market was very buoyant and we managed to outgrow the market and gained a point in market share to 9.4%,” said Boyce.
“But this is a stepping stone to a bolder ambition. No one is going into this lightly. It will require 30% a year growth and it requires investment on all fronts, in new products, core technologies and various partnerships,” said Boyce. “It involves capacity investments and most importantly the limiting factor is finding good people. We continue to locate ourselves in parts of the world such as Dallas, to help us on that journey.”
Last month the company opened its first design centre in the US in Dallas to tap into analog designers at Texas Instruments, and plans to enter the market for power management ICs. This is a key step to build on its existing discrete device market and a key part of the growth plans.
The company is also looking at Munich in Germany for a design centre, which would also tap into the pool of analog and power designers at Infineon Technologies.
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“In the low to medium voltage MOSFET markets, we have plenty of scope to grow in that space with new products and new capacity but those are in the plan and there are still strong underlying structural demands in the market that will fuel that growth,” he said.
He points to the increasing amount of electronics in automotive that requires power management, as well as increasing demand for gallium nitride (GaN) and silicon carbide (SiC) devices as well as silicon IGBTs for electric vehicles. There are also key opportunities for power management in AI and cloud data centres as well as energy storage and the shift from mains to battery appliances in consumer.
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“We have new activity for IGBTs, GaN, SiC and PMICs, those are areas we will expand into, and we will have to win share against other companies,” he said.
All of this will require a mix of in-house and foundry capacity and a mix of technologies. “We plan to play our full part with products on all technologies and materials and we will push the boundaries as far as we can,” he said.
“We have an 8in line ramping up in Manchester now and we have a 12in fab that will be running our first wafers end of this year, early next year in Shanghai and that’s a huge step up in capacity. We expect to expand foundry activity as well,” he said.
“We have the funds to support this, whether that’s R&D, capacity, go-to market people for the more complex products, on all fronts we are investing right here, right now in preparation for that.”
This includes recruiting more staff alongside the 14,000 current employees. “We are expanding the logic team in Malaysia and in Japan, and we are likely to do something in Munich and likely to do something in Bangalore (India),” he said.
“That’s the ambition, We are spending around 10% of revenue on R&D and we expect to raise that to 15%. One of the step ups that was approved a year or so ago was to have a proper research department and that is now up and running, and that will be setting up university liaison projects across Europe and beyond,” he said.
This will be led from Newport, where Nexperia acquired Newport Wafer Fab. However that deal is under renewed scrutiny by the UK government, which is sceptical of the links between Wingtech and the Chinese government.
All these moves will take considerable investment. From a base revenue of $2bn, that is a big jump, even though the investment in the 300mm fab in Shanghai is already included in these plans. But Boyce is clear that the funding is available from Wingtech and the ambitious plans are a key way to attract the staff that will be needed over the next eight years.
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