Transcript Document

A Wholly Owned Subsidiary of Comtech Telecommunications Corp
About Me
- 1992 UofI Graduate with BS in Business
- Production and Operations Management
- 15 years at Comtech AHA
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Assistant Buyer
Buyer
Senior Buyer
Operations Manager
Director of Operations
VP of Operations 2008
My Role at AHA
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Buyer/Planner
Shipping & Receiving
Inventory Mgmt.
Product & Test Engineering
Quality & Reliability
Import & Export Compliance
Facilities
Location
• Located in Moscow, Idaho
• With close access to
Washington State University
& the University of Idaho
Background
• Genesis in NASA Technology
• 20 year old Fabless Semiconductor Company
• Focused on hardware accelerators implementing advanced
Forward Error Correction and Lossless Data Compression
• A wholly owned subsidiary of Comtech Telecommunications
Corp.
Comtech Telecommunications Corp
(NASDAQ: CMTL)
Over 1200 Employees Total
- Our Parent CompanyDevelops, produces and markets satellite communication
products in three complementary market segments:
•Telecommunications Transmission
•RF Microwave Amplifiers
•Mobile Data Communications
Comtech Subsidiaries
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Telecommunication Transmission
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Comtech AHA Corporation
Comtech Antenna Systems, Inc.
Comtech Vipersat Networks, Inc.
Comtech Memotec, Inc.
RF Microwave Amplifiers
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Comtech EF Data Corp.
Comtech Systems, Inc.
Comtech PST Corp.
Mobile Data Communications
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Comtech Mobile Datacom Corp.
Comtech Tolt Technologies, Inc.
The Acquisition in 2002
• Leading up to:
- $$$
- Aggressive spending on new products
- Lost sight of cash flow/balance sheet
- Trying to IPO, swinging for the fences.
- Tech downturn of 2001.
• Driving forces behind the acquisition:
- Competitors also looking
- IP
- Stable supply
AHA History
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1988 - Founded at U Idaho EE dept. - growth
1989 - Office location in Moscow - growth
1990 - Moved to Moscow tech incubator - growth
1993 - New building in Pullman - growth
1998 - Lost major account – major downsize
1998 - Turbo Product Codes IP – growth
2000 - Opened design centers in U.K. and Portland, OR
2001 - Technology downturn – major downsize
2002 - AHA acquired by Comtech Telecommunications
2004 - LDPC error correction IP – managed growth
2005 - New building in Moscow – managed growth
2007 – 2 new chip products
2008 – 2 new board products
Significant AHA Firsts
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1988 - Founded
1989 - World’s first Reed-Solomon IC
1992 - World’s first use of CAM for data compression
1993 - Concatenated Reed-Solomon Viterbi
1994 - StarLite lossless image compression algorithm
1998 - World’s first Turbo Product Code IC
2002 - AHA acquired by Comtech Telecommunications
2003 - World’s fastest Turbo Product Code IC
2003 - GZIP compression accelerator
2004 - LDPC error correction IP
2007 – Worlds first GZIP compression IC
Comtech AHA (in house capability)
• Engineering development of forward error correction and
data compression products (IP cores, chips and boards)
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Design
Marketing & Sales
Shipping & Receiving
Quality & Reliability
Purchasing and Planning
• Out Source Manufacturing
- Wafer Foundry
- Package Assembly & Production Test
- Board Manufacturing
AHA People - Jobs
• Technical (20 people)
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Design Engineer
Software Engineer
Verification Engineer
Research Engineer
Network Engineer
Test & Product Engineer
Sales Engineer
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Office Manager
Customer Service Manager
Sales Manager
Controller & Accountant
Buyer Planner
Shipping & Receiving
Quality
President
• Business/Managerial (8 people)
Comtech AHA Products
• Integrated Circuits
• Intellectual Property Cores
• PCBs
Our Markets
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Satellite communications systems
Digital Copiers
Storage appliances
Web hosting
Wireless communications
Data Compression
• Increase performance by:
• Reducing file size
• Reducing memory requirements
• Reducing transmission time
• Reducing link requirements
• Applications
• Storage
• Network Traffic
• High End Digital Copiers
Sony
- Computer / network tape back-up drives
- Uses AHA data compression chips for 2x storage
increase
Xerox Corporation
- Digital Copiers (high end systems)
- Use AHA data compression chips for speed
Forward Error Correction
• Allows communications systems to:
• Improve data reliability
• Reduce system costs
• Increase transmission range
• Lower transmission power
• Applications:
• Wireless Communications Systems
• Audio CDs
Comtech EF Data
- Digital and IP Satellite Modems
- Uses AHA Turbo Chips for Industry leading
performance
Some Business Issues at AHA
Typical Product Development
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Manpower: 4-8 engineers
Timeframe: 9-12 months
Cost: $2-3 million
We typically introduce 2-3 new products per
year.
Random observations
• Engineering developments never get done
early
• It is really difficult to schedule tasks that you
have never done before
• You can’t schedule an invention
Revenue and Costs
• Development costs occur at beginning of
project
• Revenue occurs only after product is in
production.
- Typically there is a 2 year lag between start of project and
first revenue $$$
- Fortunately, our ICs stay in production for 5 years or more.
• Manufacturing costs decline over time.
Where does it start?
• Risk: assessment
• Research: develop original IP
• Third Party Collaboration:
- Customers
- product definition, application
- Vendors
- Technology to support
- Capacity
• Engineering phases
- 1: create specification, estimate resources and schedule
- 2: design team formulation
- 3: design & evaluate prototype
• Sales: press releases, documentation, conferences
• Production: managing the supply chain
New Product Ideas
• From our engineers
• From our customers
• Must always validate a new product idea with
potential customers
Risk Areas in Product Development
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Product doesn’t function properly (DOA)
Cost overruns
Product is late to market
Competitors product outperforms us (eg. cost,
features, schedule)
• Marketplace shifts and doesn’t want it
- “Build it, they will come” Field of Dreams Philosophy
- Design to an anticipated need
- 1 in 7 chips succeed financially
- AHA history 1 in 4
• Third party intellectual property short falls
Research
• Internal Intellectual Property
- AHA research develops core intellectual property
- Drove the acquisition
• Third Party IP
- Critical to product development
- Must be process proven (reduce risk of failure)
Intellectual Property (IP)
• Gives us a competitive edge.
• Our value proposition is not cost, it is not our
manufacturing, it is our product performance and
original IP.
• Sources of IP
- Internally developed IP
- Licensed IP
- Publicly available IP
- Cooperative research with universities.
Collaboration
• Customers
- What does the market want/need
- Will it be used if we design it
• Vendors
- Can it be manufactured
- Design specifications
- Will it function as planned
- Process variations explored
- Intellectual Property
- Critical availability
- Capacity
- Capital investments
- Line qualification
Customers
• Strategic Customers
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Key customers help define product spec
Key customers help debug prototypes
More than just a sales revenue relationship.
We seek long term relationships.
Sales growth starts by keeping your existing
customers satisfied !
Relationships
• Long term
- Critical for small companies
- Cost of developing relationships
- Travel
- Time
• Communication
- Keep it professional
- Never let it become personal
- Honest
- Language barriers
The Supply Chain
Very Simple Supply Chain
Current Suppliers
• Wafer Fabrication
- UMC – Taiwan
- IBM – France
- Tower - Israel
• IC Packaging
- Amkor – The Philippines & S. Korea
- Fujitsu – Japan
- Unisem – Indonesia
• Production Test
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Amkor
Tower
Comtech AHA
Silicon Turnkey Solutions – California
• Board Manufacturing
- Comtech EF Data
AHA Manufacturing Flows
• Subcontracted Flow (Initial flow)
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AHA
AHA
AHA
AHA
AHA
manages wafer foundry
manages wafer probe
manages package assembly
manages final test
owns yield risk
• Turnkey
- Foundry vendor owns entire flow including yield
risk. This can lead to reduced costs from yield
improvement.
Prototype Flow
• Prototypes
- Evaluated at AHA
- Debug test hardware
- Debug test software
- Proto confirmation
- Functionality
- Meets Specification
Pre-Production Flow
• Confirmation
- Test Hardware and Software Confirmed
- Design Fully Functional and meets spec.
- Customer is using the product
- Begin Outsourcing Production Test
- Initial Production Flows Established
- Foundry
- No Yield Issues across process
- Package Assembly
- Qualification Complete
- Shipping
- Freight Forwarders
- Routing Instructions
Production Flow
• Keep it Simple Stupid (KISS)
- Simplify the flow
- Reduce travel
- Reduce touches
- Reduce risk
- Consolidate manufacturing steps
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Increases level of business
Increases flexibility
Reduces cost and lead times
Quicker response to customer orders
- Opportunity cost
- I could be doing other things
- Inventory costs
Sony Example
Konica Example
Issues / Challenges We Face
• Location (transportation to markets /
customers)
• Cost of developing new products keeps rising
• Marketing – finding the next great idea
• Competition from Asia
Amkor Technology Photo
Photo Showing wire bond process
Comtech AHA Customers
Comtech’s Business
Questions?
Comtech AHA
Comtech AHA Corporation
1126 Alturas Drive
Moscow, ID 83843-8331
Phone: 208.892.5600
Fax: 208.892.5601
www.aha.com
[email protected]