Melexis CEO: Strong alone

Interviews | November 11, 2016

By Christoph Hammerschmidt

Automotive Wireless Communications Sensing / Conditioning

The semiconductor industry seems currently be in a consolidation phase: NXP – itself not exactly a light weight – is swallowed by Qualcomm, Intersil by Renesas – and Melexis’ main competitor Micronas has been bought by mighty Japanese industry group TDK. Time for Melexis to look out for a strong partner? No, says Chombar, rather the opposite. “The current situation amidst newly intensified market concentration in the semiconductor industry actually creates opportunities for companies the size of Melexis, because the list to choose from for customers get shorter,” she said. Is she sure? With the strong backing from TDK, Micronas could become a formidable contender, right? But Chombar is quite certain that she is not afraid of any giant. Because, first, TDK and Micronas are not playing in exactly the same market segment where Melexis is operating, and, second, Micronas has not the degree of fitness as Melexis, Chombar explained. “They have been struggling for quite a while. The takeover by TDK gives them the chance to recover, but they are no longer masters of their own destiny,” she argued.

Trust in her own strength:
Melexis CEO Francoise Chombar

Plus, Melexis is more creative and innovative, at least as seen from Chombar’s perspective. “We are continuously renewing our portfolio”, she said. “We invest 14 to 15 per cent of our sales into R&D and have a very healthy balance sheet. Our growth is all-organic, based on the ingenuity and creativity of our staff.” She added that size is not the only success factor: “Perhaps we are small, but we have strong growth of 13 % in overall sales. Over the past 5 years, we had a CAGR of 12% while the market only grew at 5%.”

Again, the eeNews Europe reporter remained skeptical. After all, the semiconductor industry is probably the most capital intensive industry in the world. So how can a small company afford the immense costs to develop new technologies and products? Wouldn’t it make sense to look out for a financially potent partner? Chombar remained unimpressed: First, Melexis is a fabless company, which makes it much easier to shoulder R&D investments – “the capital intensity in the chip industry is more in the fab”, she answered, followed by a firm commitment to its own qualities. “We don’t need to get saved, we are strong”, she said. “We are focused on what we do. We research, invent, develop and design, but we don’t need to manufacture.”

Melexis’s success curve runs widely in parallel to the semiconductor demand in the automotive industry. And yes, she agreed, the demand is strong in the automotive market, with chips being responsible that cars are becoming safer, smarter, and with more stylish interiors. “But what drives technology most is the trend towards more sustainability. Actually, sustainability is the most important trend: Cleaner engines, electrification, and hybridization. See our latest product: A temperature sensor, a critical feature to make the engine run under optimum conditions.”

The autonomous car seems currently being the technology driver for the entire automotive industry. “Yes, there is a big hype about self-driving cars”, she agreed. Nevertheless, “the autonomous is a shifting target, it is not here yet.” At least, the road is clear: “It will be paved with ADAS which need more sensors, including Time-of-flight (ToF) sensors, for example. “Our ToF sensor is still the only one in series cars, and we know that the take rates are high”, Chombar said.

Melexis’ success in its markets makes her optimistic for the future. “Combining sensors, signal conditioning, making sensors smart is our expertise. The combination of different technologies leads to new applications. An example is Tire Pressure Monitoring Systems (TPMS): They are combining the expertise to design low power and small form factor chips. We can design such features into many applications.”

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