Speaking exclusively with New Electronics, president and CEO Gregg Lowe – now about two and a half years into the job – pointed out two things. "Our top line revenue has outgrown the market again. We were ahead in 2013 over 2012 and now in 2014 over 2013. In fact, we outgrew the market by about a factor of two. And, for the second year in a row, all five of Freescale's business departments outgrew the market. Freescale has had two successful years and there are good signs for the future."
In the fourth quarter of 2014, Freescale recorded sales of $1.1billion and earnings of $274million. For the full year, sales were $4.63bn and earnings were $1.09bn.
Whilst debt has always been near the top of the agenda in discussions with Freescale, Lowe doesn't seem to be that bothered by the topic. "We have paid down another $1.2bn of debt over the last year and will be paying down $100m a quarter this year. There's still work to be done, but the debt isn't the millstone it was."
Asked how he explained the performance, Lowe noted: "A lot of hard work on the part of all the teams. There are many reasons why our performance has been as good as it has been, but one of the main ones is having differentiated products that excite customers and help them to develop better products. That has been key.
"Applications like the IoT need energy efficiency, scalable processors and connectivity – things which fit well with Freescale's skills."
Lowe said Freescale's product development teams have spent a lot of time looking at technology and product development, with the result that its five business groups are doing well.
But the general purpose microcontroller group was singled out by Lowe. "Geoff Lees (general manager of the group) has done a great job of delivering new products on advanced processes."
Freescale is moving some MCU products to a 28nm process, but Lowe said this isn't the radical move it appears. "The fact is that 28nm isn't a leading node today; there are a lot of products being made on that process. What we're doing is moving into these technologies as they become appropriate, but we're not pushing to the leading edge."
Automotive also gets special mention. "Whilst automotive has always been a strong market for Freescale, our performance in Japan has been good. We grew sales by 20% last year and revenues are now in excess of $100m. But we're still a small player in Japan because it's a hard nut to crack, but the signs are good."
Product development is a central requirement for any company and Lowe is keen to highlight work in progress. "We're developing new sensor technologies, for example. While it's still too early to discuss them in detail, we already have sample coming out of manufacturing. Amongst them are multiaxis sensors with low power consumption and small size. They'll be targeted at a lot of IoT applications which need sensing and connectivity. Although we won't be hitting the streets with the products quite yet, they will probably start appearing in Q2 this year."
A more unusual approach to product development is the company's Discovery Labs. "We're very excited about the concept," Lowe claimed. "It's a place for us to examine more radical, more innovative, more disruptive ideas. We opened the first one in Austin two years ago and added another in Toulouse last year. A lot of the projects in the labs won't go anywhere, but some will – and we have already seen one idea move from the lab into a product group, which is working on how to turn it into something we can sell."
Looking to the future, Lowe said it remains hard to call the market, but noted: "That has always been the case with the semiconductor market, because it isn't a 'straight line' business. But the trends look good and I'm encouraged about the prospects."
