Tech company with the can-do attitude takes its lead from Silicon Valley

 

High-tech Goliaths such as Cisco may be finding it tough going in the current economic climate, but there is more than one David in the technology sector who believes the odds may be on their side, at least according to one Belfast start-up.

Dr James Doherty, chief executive of Amphion, is in no way downhearted by the seeming never-ending round of profits warnings and global restructuring programmes that have dominated the high-tech sector since the beginning of the year.

Amphion had planned to float, possibly on the London and Nasdaq stock exchanges, round about now but has postponed its plans until early next year in a bid to ride out the current downturn in the markets.

The Belfast-based "chipless" semiconductor company may have had to revise its schedule, but it claims it is in no way a victim of the slump in the worldwide technology sector.

The company is a leading supplier of virtual components for the multimedia, wireless and broadband communications industries.

Its client list reads like a roll call of the global IT sector including Siemens, Cisco and Ericsson.

Amphion is also fast becoming one of the industry leaders in the emerging semiconductor intellectual property market, thanks to its award-winning designs that have given the Belfast company an enviable international reputation.

Seven years ago when Dr Doherty, then a leading academic at the electronics engineering faculty at Queen's University in Belfast, and his colleague, Prof John McCanny, first raised the idea of establishing a chip company in Northern Ireland, it was greeted with more than a degree of scepticism.

"Our motto has always been to grow as a Silicon Valley company. We have always had a can-do attitude but, back in 1994, people tended to say 'yeah a Silicon Valley company in Belfast' as if it could not happen. We knew differently," Dr Doherty said.

Today the company's headquarters are in Belfast but its sales and worldwide marketing departments have their co-headquarters in San Jose, California.

It is currently a privately held company. Queen's University remains a major shareholder, but Amphion cites its decision to seek venture capital as one of the reasons behind its growth in just seven years.

Dr Doherty said: "We closed our first $5 million (€5.5 million) round of venture capital in 1999 with excellent partners such as Apex Partners and Enterprise Equity

"Unlike most start-ups in this very high-tech area, we have been generating product and profits from the word go but we have used our venture capital very carefully to help grow the company quicker.

"Our latest round raised $10 million last year but we have been prudent and there is a very big chunk of that still in the bank as we watch the industry that was go through the throes of this downturn."

According to Prof McCanny, chief technical officer of Amphion, the company's unrivalled technology is helping to insulate it against wider industry issues.

"In a downturn market we do have to be very careful but most of the profits warnings issued by some of our key customers are the consequence of industry problems such as building up stock of previous generation products.

"If anything, most of these companies are trying to design their way out of the recession. Companies also have to design for the upswing and, therefore, the recession is not hitting us because we are not inventory-orientated.

"We are also in the cost-reduction business because we can design products in an outsourced mode so if people want to reduce their design teams, then we can step in," Prof McCanny said.

Although Amphion's core capability initially revolved around digital signal processing, the company has expanded its portfolio of products to take advantage of the high-tech move towards "convergence", according to Prof McCanny.

"Our expertise is that we can design special-purpose circuits to handle huge volumes of information being transmitted simultaneously.

"What we are seeing now is more and more demand to handle more capability on these circuits because consumers want their products to do so much more now, which is driving the demand from the industry for convergence," Prof McCanny said.

"We believe that we are in a very strong position worldwide, in terms of the kind of solutions we have and the breadth of solutions we have, to be a very strong competitor in this sector," he added.

According to Dr Doherty, this means Amphion is going to play a key role in next-generation technology that will be incorporated into the likes of third-generation mobile phones.

"People talk a lot about the converging world - about bringing the likes of voice and video together. We have the intellectual property to help bring this all together and we believe this will be the next chapter for Amphion," he said.