We expect to grow in Bulgaria

Electronics InterviewSouth-East European INDUSTRIAL Мarket - issue 1/2016

We expect to grow in Bulgaria

Greg Waters,
President and CEO of IDT,
for South-East European Industrial Market

Dear Mr. Waters, could you please present briefly the company of IDT to the readers?
IDT is a public company founded in 1980; with ZMDI, we now have about 2,000 employees. For the past two years we have been one of the fastest-growing technology companies in any industry. Current revenues are about $175 million per quarter - with ZMDI; this is about $800 million per year.

The products that ZMDI brings - sensing, automotive, and some others - this is, as Frank said, the center of excellence for the whole company in these areas. The other products that you will find IDT very successful in is telecom infrastructure, like 4G-based stations - Nokia, Siemens, Ericsson, Huawei and also in data centers. For instance, with our components, every 4G call made in the world, 100%, passes through our chips. This was the main company focus prior to ZMDI - telecom, data center - and now automotive & industrial.

What prompted your decision to acquire ZMDI? How does the company’s portfolio complement that of IDT? What are the market benefits of this acquisition?
We found that the ZMDI technology had a lot in common with very similar technology of IDT, the applications and the customers were very complimentary as well. There is a lot of benefit to the fact that we have common technology, but we also found that we had different customers. ZMDI is very strong in automotive, where we are not. IDT is strong in telecoms, data centers, in some smartphone technologies, which is very complementary, and we liked the synergy of this combination.

We are excited about the acquisition of ZMDI not just for the immediate benefit, but the future integration of these products and technologies. For instance, ZMDI has a real history and core-competence in sensing which will complement our IDT product portfolio. There are many different ways to combine these products to offer customers a much fuller solution.

ZMDI and IDT are a great fit together not only in technology and customers, but in location as well. IDT is based in California, but it is also a very global company already - we are strong in North America, Asia, and the ZMDI acquisition gives us a very strong presence in Europe.

How did this deal affect your work process and environment? Were there any significant organizational changes necessary?
In addition to new products and technologies, IDT will now be strong in automotive. From an organizational point of view, we are running ZMDI as a business line of IDT - an Automotive & Industrial segment, run by Frank Schulze and Frantz Saintellemy, who have been managing it for ZMDI prior to the acquisition. Therefore, there is no major organizational change. But in other areas where we can provide benefit from the combination, like in manufacturing and other areas, this is a very positive change.

ZMDI are well known as a fabless company, will that change?
No, because IDT is also fabless. What is unusual -maybe even lucky, but true - is that if you look at the fabless technologies which are already in use, they are identical to the ones that we use. This is very familiar territory for both companies. So we remain fabless but now our position with the outside providers is much stronger.

What are your impressions of the European market and in particular the SEE and Bulgarian market?
We are no strangers to Europe. If you look at the historical IDT business, we are very strong in telecommunication and we have almost 40% of our business coming from this. In Europe, this business is about 15% to 20% of our revenue, without ZMDI. Now, with ZMDI, this will become larger. Europe is a key market for us and we expect to grow more in it.

This is my first time in Bulgaria, but the most important thing is not my impression from one visit, but that the history is very positive. If you look at the results under Anelia Pergоot with the design team here and also in Varna, there is a steady asset of positive results that have been going on for years. We feel confident we have a team that we can grow and grow. And also, I would say - not only for Automotive and Industrial business - I think that almost surely there will be benefit of the Bulgarian team with some of the other IDT businesses, and this discussion is just starting right now. We expect to grow in Bulgaria.

My observation is that it seems like the team here can do IC, firmware and software back and forth very quickly. I think this is a big advantage anywhere, and it is rare in the semiconductor industry, so I think this could be very powerful.

What will happen to ZMDI’s previous partners? Are you going to continue working with them or change the course of action?
There will be some changes, but not strategic change. The programs that ZMDI was doing before are continuing, I believe, without exception. Most of the discussion is about what else we can do to make them go faster and do better, we will almost certainly expand. The timing for that change is now, the people are very motivated, too, which we respond to. And with respect to the rest of the partnerships, this is always changing - we expect our partners to provide competitive advantage to us just like we do for our customers. So there will be some change, but this is more of an ongoing issue.

Frank Schulze, Member of the Board of Management of ZMDI:
ZMDI becomes a center of excellence for Automotive & Industrial

ZMDI, including ZMDI Eastern Europe, becomes an IDT center of excellence for Automotive & Industrial in terms of business but also in terms of operations. This brings a certain value also to the other divisions of IDT and we are going to make synergies out of that, bringing products into the automotive market that are already existing in IDT’s portfolio. That is a competence we can bring very short-term to put some additional growth on IDT.

Anelia Pergoоt, general manager of ZMD Eastern Europe:
We will encourage the people to go as one team

Through the years, falling, standing up and going ahead, we built a very strong relation with our German colleagues. The last projects that we are running are a distributor type of projects where both sides work together, which makes us really strong. We’d like to see ourselves more like the