Looking Back and Looking Ahead Silicon Labs at 25
In the lobby of Silicon Labs' corporate headquarters in downtown Austin, Texas there are a few artifacts from the company's earliest days to remind us of where we started. One item on display is a hand-written note that inspired the core values on which the founders would build the company: hiring and fostering great talent, creating value through innovation, being accountable and doing the right thing. Another is the quarter our founders, Nav Sooch, Jeff Scott and Dave Welland, flipped while they were considering the pros and cons of striking out on their own. Knowing these innovators well, the decision to start Silicon Labs was a foregone conclusion. But the story of the coin toss helps illustrate the optimism, vision and promise our founders had in mind for the company even in its earliest stages.
Silicon Labs was less than a year old when I joined in 1997 as the 10th employee, and through all of those years we've kept our focus on living up to our values of developing talent, breakthrough innovation tied to commercial success, holding ourselves accountable for results, and doing the right thing for all stakeholders including our customers, investors, employees and the community. We went from a small semiconductor startup to being recognized today as a global leader in silicon, software, and solutions for the large and growing Internet of Things (IoT) markets. As we celebrate our 25th anniversary, I can't help but look back on all that we've accomplished and I'm particularly proud of the way in which we've lived up to those values jotted down all those years ago.
Our first product was a direct access arrangement (DAA) which is a fancy way to describe the interface for a telephone line modem, and the goal was to achieve profitability quickly in a large, established market. Introduced in 1998, our DAA replaced a board full of bulky and discrete components including transformers, mechanical relays and optical isolators with an elegant silicon-based solution. Occupying one-fifth of the circuit board space, our DAA design made the integration of modems possible in small form factors like laptops, simplified supply chains with a single global design, and dramatically reduced cost. Within four years of that coin toss, the company went public in 2000 having only used $4M of venture capital funding and quickly ramped to over $200M in revenue, attaining over 50% share in the personal computer market.
We quickly followed our initial success with a second wave of breakthrough products which pioneered the integration of radio frequency (RF) into standard semiconductor process technology, fully implementing the front-end transmit and receive functions of a mobile handset and eliminating dozens of bulky discrete SAW filters and oscillator modules, ultimately attaining over 25% market share. The technologies we developed in the early days paved the way for Silicon Labs to become a leader in a diverse range of markets and applications including oscillators and clocks for high-speed communications, broadcast radio and TV tuners, and high voltage isolation for industrial and automotive applications.
In 2012 when I was named CEO, we went all-in on the emerging market for wireless connectivity in a broad range of IoT applications to build a smarter, more connected world. We merged our analog, mixed-signal and RF integration expertise with embedded computing and expanded our capabilities with investment and acquisitions to build our software capabilities and to establish ourselves as experts in wireless protocols and networking. This also allowed us to implement industry-leading security technology and focus on machine learning and intelligence at the edge of the internet in some of the most demanding and energy-constrained applications. Earlier this year we recommitted to our vision when we sold our Infrastructure & Automotive (I&A) business to Skyworks Solutions, Inc. to focus on accelerating as a pure-play leader in wireless IoT solutions.
As I look back on the company's first 25 years, technology is just part of the story. The four guiding principles the founders envisioned in 1996 are just as much a part of our company today as they were then. Being a good corporate citizen and giving back to our communities around the world has remained a top priority. As a company, we donate more than 1% of our annual profits to charitable organizations and offer employees the flexibility to give back on their own through corporate matching programs and paid time off for volunteering. This fostered a giving company culture that makes me as proud as any of our innovations.
We've come a long way as an industry and as a company and looking at what's ahead in the world of IoT is exciting - the limits seem to be retreating further and further into the distance as once-daunting challenges like security and power management are routinely being addressed with elegant, high-performance solutions. This is an exciting time for us, and I can't wait to see what the next 25 years has in store.
