Actel (ACTL)

Based in Mountain View, CA, Actel Corporation (ACTL) is a fabless original equipment manufacturer (OEM) of semiconductor-based field programmable gate arrays (FPGAs). A fabless manufacturer outsources the actual production of the integrated circuits (ICs) or chips to a specialized semiconductor manufacturer, otherwise known as a foundry. The company is the fourth largest vendor in the FPGA market and the largest supplier of flash FPGAs and antifuse FPGAs.

Semiconductor devices are broadly divided into three categories analog, digital and radio frequency (RF). Analog semiconductors condition and regulate real world information such as light, temperature, speed, pressure, power and electrical currents. Digital logic semiconductors process information in only two states. Mixed-signal semiconductors combine both analog and digital technology into a single device. Typically, an analog sensor samples real world information, and then converts the input into an electronic analog signal, which is converted into a digital format for further digital processing. The analog and mixed-signal markets tend to be more varied and specialized, with customized products that have longer life cycles than those in the digital industry segment. There is an ongoing drive to decrease the number of discrete devices, lessen power requirements and shrink the size of the existing devices, which correspondingly increase performance and reliability. Consequently, a greater amount of functionality is being consolidated into increasingly smaller devices.

A semiconductor-based electronic system uses digital logic to control and enable interaction between different functional electronic modules within a system. An electronics system designer can either piece together multiple off-the-shelf components or opt for a single application specific integrated circuit (ASIC) chip. While most ASICs are hard-wired, or non-modifiable customized devices, FPGAs are more complex ASICs that can be modified, and consequently, have higher production costs. Usually, the flexibility benefit of the FPGA isn't worth the incremental cost over a hard-wired ASIC, especially within a production system that most likely will not require any future changes. Typically, a designer uses an FPGA in the pre-production system and then switches to a hard-wired ASIC in the production system. The lower per unit cost is the primary reason that the hard-wired ASIC market is 10x as large as the ASIC programmable market.

Actel supplies both antifuse and flash FPGAs. One-time programmable antifuse FPGAs have internal connections within the chip that are "burned" to yield a chip with specific permanent logic characteristics. The antifuse FPGA is the legacy product. Actel's relatively newer flash FPGAs include memory, which retains the internal configuration information of the chip, even without power (nonvolatile), until it is reprogrammed. The company also has a high reliability (HiRel) line of FPGAs, which are distinguished by a more rigorous packaging of the IC. This enables it to operate in environments with more stressful elements such as radiation. The HiRel product line primarily targets the military/aerospace market. The company also offers software translation tools that convert popular third party logic diagram design software outputs into the required FPGA configuration language. Actel has existing foundry relationships with Chartered, Infineon, Matsushita, UMC and Winbond.

Actel has the fourth-largest FPGA market share, behind Xilinx, Altera and Lattice. The firm is the leader in the HiRel segment, with products that are primarily used within the military, avionics and aerospace markets. In 2007, the industrial market accounted for 40% of the company's revenue (up 5.4% from 2006), military and aerospace contributed 32% (down -5.7%), communications comprised 15% (down -15.1%) and consumer brought in the remaining 13% (up 76.1%). FPGA sales accounted for over 95% of revenue in 2007. Roughly 50% of 2007 revenue was generated in North America, 29% in Europe, and the remaining 21% in Asia/Pacific countries. Product distribution was through a direct sales force, independent sales reps, electronics distributors and value added resellers (VARs). Around 77% of 2007 sales were through distributors, the remaining 23% was shipped directly to OEMs. Avnet is the company's largest distributor, generating 40% of revenue in 2007. In 2006, the company also added Mouser Electronics as a distributor.

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