The Changing Tide: Europe Turns to the Market
Bhawani Shankar
European Microwave Journal Staff
Barely five years ago, the microwave industry in Europe appeared to be locked in an uncertain battle against the twin forces of unproven markets and a dwindling list of orders. Today, a similar analysis of the companies that have survived those challenges would record the prospects for the industry as ranging from good to phenomenal. While it is undoubtedly true that every company, almost without exception, has benefited and continues to thrive on account of the booming telecoms market worldwide, this dramatic turnaround has not been accomplished merely by making new products. Rather, the industry has had to go through a radical reshaping. Continuing the September 1996 report on trends in the European industry, this article now looks at how the industry-wide re-engineering is helping microwave manufacturers to become, in some instances, more successful than their clients in the telecoms industry.
Throughout the 1980s and until the early 1990s, much of what the industry developed and produced relied heavily on the defence establishment. Products ranging from passive defence and surveillance systems to electronic warfare to battle-worthy wireless communications systems were the mainstay of most of the companies. This captive market was one in which quality and reliability mattered most and neither time nor cost ever was a limiting factor.
In addition, because of the attendant security risks, the specifications for a product, its design, development and manufacture were largely undisclosed until the products were in use; the only facts apparent to the commercial world were that with the support of the defence departments many microwave companies grew to become substantial entities with seemingly unlimited research and development resources. Most products were prototyped but only some ended up in actual use. Thus, quantities ranged from none to, at most, a few hundred. In short, these were companies with resources far beyond capacity and whose ability to turn their niche wares into everyday use was limited.
As a result, when defence budgets started to be scaled down globally during the early 1990s, observers expected to see a similar downsizing of the industry. While downsizing has occurred, and still continues, the restructuring of the defence industry has not had the forecasted cataclysmic effects on the manufacturers. In broad terms, the effects have been twofold. Most of the small- to medium-sized companies have been quick to capitalise on the exploding market for telecoms, particularly wireless products. On the other hand, larger enterprises with significant state stakeholding have had to look at new ways of retaining their standing as leading-edge companies. Privatisation, in part or full, is on the cards for several major defence electronics manufacturers such as Thomson-CSF. Certain other manufacturers have considered partnerships with similar companies overseas while some have developed commercial offshoots concentrating on small industry sectors.
That the dip in defence contracts has been concurrent with the upswing in telecoms is less than happenstance. As the global focus shifted from regulated industry to liberal entrepreneurship, one of the first industries to benefit was the one that had been regulated most severely. Also, as telecoms administrations worldwide began to loosen their grip on policymaking, markets zoomed beyond expectation. As demand grew to challenge supply, operators, particularly those challenging dominant incumbents, began to look at new, cost-effective means of offering service and, logically, resorted to wireless networks. According to the Paris-based manufacturer SAT, as old networks reach saturation, the replacement/upgrade market is increasing rapidly and, for private operators, the spontaneous choice seems to be wireless. Currently, many private operators are using microwave links for network backbones. These links are faster and cheaper to install than copper- or fibre-based networks and, most importantly, at a time when competition is biting hard, they give the private operators independence from the monopoly operators with whom they have typically sought interconnect agreements.
Building on Expertise
Overall, the effects have been astounding. For instance, 10 years ago, approximately 60 percent of Sophia-Antipolis-based Thomson Microsonics’ (TMX) supplies were to the military. Now the number is approximately 10 percent and still decreasing, a trend that is mirrored across the industry. TMX, a part of the Thomson-CSF group, is involved in the large-scale manufacture of surface acoustic wave (SAW) filters for the cellular industry.
As companies faced the prospect of falling revenues and assessed their respective strengths, it was clear that the way forward was by capitalising on what they did best. Across the road from Thomson-CSF in suburban Paris, Michel Fache, director of Microwave Divisions at Dassault Electronique, spelled out the company’s experience: “We started to move away from the military market after the Gulf War,” he said. “We moved away from very professional to civil, both through space and commercial wireless businesses.” Dassault’s research and development facilities in space and avionics are among the most extensive in the world and to this day are maintained in a battle-ready condition — mission-critical systems are housed in a sprawling bomb-proof basement. Using these facilities to develop commercial products has been one of the company’s successes. “We spent a great deal of time and resource[s] in avionics and antenna development for commercial aircraft using technologies that were mastered in the military industry,” Fache said. “This experience taught us a lot.”
Today, Dassault produces a range of commercial products including components for the Global System for Mobile communications (GSM) market, which it sees as becoming increasingly less silicon. “GaAs technology is beginning to mature to a stage where they [the products] can now be effectively used for this market. Moreover, [pseudomorphic high electron mobility transistor] PHEMT technology will enable us to make higher power amplifiers,” Fache explained. Ramses, another new product, is a total redesign of an RF switch that has been supplied to the military.
The situation in the satellite arena is not dissimilar. “In the space industry, you can only succeed if you are able to master the technology and if the quality of your product is proven,” said Philippe Delbonnel, communications manager at Thomson Tubes Electroniques (TTE) in France. By far, TTE is the world leader in the manufacture of traveling-wave-tube amplifiers (TWTA). According to Delbonnel, “We have built on more than 20 years of experience in this perfectly controlled manufacturing process, which not many companies can do. A tube has to work in a hostile environment without failure for 15 years or more.”
In the geostationary satellite market, TWTAs are still the only choice the space industry has. But with nearly 100 low earth orbit (LEO) and medium earth orbit (MEO) satellites being launched between now and the turn of the century, solid-state power amplifiers (SSPA) may soon be seen in space. The shorter life of these satellites calls for quality and performance criteria that can be met by SSPAs, which are established already in the satellite ground station and tracking equipment areas. Pascall Microwave, a company based in the UK’s Isle of Wight, is one of Europe’s leaders in SSPA technology. “I think the day is coming when SSPAs will be able to challenge TWTAs in any environment,” said Rod Burman, Pascall’s managing director.
Clearly, achieving what nobody else could was, and still is, the major strength of the microwave industry. But successful companies have had to face ruthless competition, particularly in high volume manufacture. Companies such as TMX and Siemens+Matsushita (S+M) (both of which vie for the SAW filter market), and United Monolithic Semiconductors (UMS), which dubs itself the GaAs company, work in a fiercely competitive environment. As MMICs have spurred miniaturisation of telecoms equipment on a massive scale, these companies have been pushed to provide components at ever lower prices. However, these components also must provide dramatically reduced power consumption and increased functionality.
Focusing on the Customer
“At Thomson Microsonics, we have been doubling capacity every year for the past couple of years,” said Charles Maerfeld, chairman and CEO. Investment in new plant and machinery is occurring at a frantic pace to help sustain the growth in demand. “Between July and October 1996, we doubled shipment with no delays,” said Maerfeld. As a result, customer interaction is being redefined in companies that looked only at military markets just a few years ago.
In the case of S+M, the company has achieved growth rates of between 50 and 140 percent across the entire range of products. For the 1999–2000 time frame, the company expects to achieve a 600 percent increase in SAW sales in comparison with 1993–1994. According to S+M, these increases have occurred due to the fast transformation of new ideas into competitive products and because the company is in tune with the markets it supplies.
“With military contracts, we frequently overshot spec,” said Jean-Pierre Euvrard, president of Montreuil, France-based Tekelec Temex, which manufactures a range of microwave silicon diodes, ferrite devices and RF filters. “Now, with commercial clients, we shoot for spec, no more.” While acting on precise specifications appears to be the norm, the very relationship between manufacturer and buyer has undergone a sea of change. Today, commercial customers come to microwave manufacturers with a requirement and a budget; the requirement is then equated to a product tailored to the budget. “Civil markets allow for more creativity,” said Dominique Pellizzari, VP and GM of the Coaxial Connector Division at Radiall, a French company that specialises in connectors. “As interaction with customers improves, new ideas spring forth and new products can be designed. Whereas in the military sector, products are made for a captive market. In Radiall, this has been a big force of change for us.”
At Pascall, the vision to serve the market led to the restructuring of the organisation itself. “We gave up importing and reselling products and now concentrate on our manufacturing and engineering strengths,” said Pascall’s Burman. As a result, more than 50 percent of Pascall’s products are now exported. “We have a catalogue of products but we rarely sell something that is straight out of it. The catalogue is more a demonstration of our capabilities, and what we sell is based on what the customer wants and what we can provide for them.”
Looking beyond domestic shores is also clearly the way to gain access to larger markets. Two-thirds of Radiall’s products are now sold outside France, with major areas of growth located in the US (which accounts for approximately 12 percent) and West Asia. “The US is big because of the growing [personal communications service] PCS market. So much so that we look at the wireless sector as a market in itself,” said Pellizzari. The US market is also a major revenue centre for SAW filter manufacturers as are other potential areas of cellular development such as Japan.
Over the past five years, more new satellite systems have been announced than ever before. This growth is true of both telecoms and broadcast satellites and represents an assured market for SSPAs, TWTAs, waveguides and other components over at least the next decade. At TTE, tube production, which has more than doubled over the past five years, has already changed the manufacturing process, the organisation and its management, and production times.
Tekelec Temex’s Euvrard said: “Since 1994, we have more or less overcome the problems we faced due to the defence cuts through cellular activity and increasing exports. The cellular supplier market has been redeveloped globally, lead times are now down to weeks instead of months and price levels are totally different. While prices have dropped to about one-third of what they used to be in defence times, quantities are now significantly bigger.” For SAW filters, according to TMX’s Maerfeld, design-to-prototype times are now down to approximately two to three weeks.
The cellular market has given a boost to another area: the microwave links manufacturing sector. Systems manufacturers and service providers in the mobile market are increasingly considering technology a given while continuing to place high premiums on quality and reliability. Where microwave links are concerned, the concept of time to market has been rethought. These links are being used increasingly by cellular operators for backbone base station links and, according to Paris-based SAT, flexibility in these products is critical because the frequencies allocated for microwave backbones in various countries cover a wide range. In addition, it is difficult to re-engineer products for each frequency band.
For instance, at 23 GHz it is possible to achieve drops of 10 to 12 km in Europe. However, in the tropics that number decreases to 4 to 5 km because of humidity and rain. As a result, operators in Asia need to use lower frequencies in order to achieve longer drops. SAT understood this need and has engineered a microwave link that operates across all possible frequencies. Often, cellular operators who have won a licence do not know what sub-band they have to operate in until shortly before network deployment should begin. Since return on investment is a factor of speedy deployment, operators need not only a link that operates across the entire range but also one that can be configured precisely into the required sub-band. SAT has achieved this objective using MMIC technology. For instance, each sub-band would require one MMIC and provide users with configurable modularity wherein frequency and capacity can be set by the user. Also unique to SAT’s product is the capability to configure all these parameters and this power in a plug-and-play software-driven environment. Having a market-ready product even before network design is giving new meaning to the term time to market. Although SAT has not supplied to the military market, this microwave link is a groundbreaking trend in the industry.
How then has the industry achieved such success and turned to refocus on commercial customers? The precise answer varies from company to company but some trends emerge: Almost every company that has achieved any degree of success is now International Standards Organization (ISO) certified. According to some, this ISO certification gives the company an identity perceived by customers as friendly and standardised. But certification alone does not net revenue. “You cannot succeed in the commercial world without total management in manufacturing,” said Radiall’s Pellizzari. “Reacting quickly to market changes is key.” Concurrently, there have been changes in production methods and in the information systems that support manufacture. Just-in-time management as well as new, automated methods of quality control have been introduced.
Reacting quickly to markets has meant more products for more manufacturers. The entire industry appears intent on increasing production and output. “We have launched more products in the past five years than in the previous 20,” said Pellizzari. “Innovation is now part of our business strategy.” The manufacturing process has also been subject to rationalising. Concurrent engineering, whereby tasks that are common to the manufacture of a range of products are centralised, is allowing managers to spend more time on understanding their markets.
At UMS, which is a partnership between Thomson-CSF and Daimler Benz Aerospace AG (Dasa) of Germany, a central design facility provides a group-wide service that helps to rationalise costs across a range of products. In fact, this strategy has reduced design costs by approximately 20 percent at UMS. The success of UMS in the GaAs market is a striking example of how companies are establishing alliances to overcome market and organisational pressures. UMS is an independent joint venture that produces and sells GaAs devices and MMICs. Both parent companies recognised the role that GaAs-based MMICs would play in future technologies and the establishment of UMS took care of two needs at once. The parent companies now have a growing share in the market without competing against each other and, because the spinoff company was set up as a small, focused and independent enterprise, it could tackle the market as it needed to without the burden of organisational legacy. “The independence of UMS is a unique and significant feature of our existence,” said UMS president and CEO, Heinrich Dämbkes. The company has at its disposal the extensive resources of its parents while not being part of them. UMS is now at the cutting edge of technology and expects to benefit from the growth of the mobile, automotive and satellite markets.
In May 1996, Thomson-CSF formed another alliance that gave the group a firm grip on the electron tube and TWTA market. TTE, its subsidiary, joined forces with AEG, a Dasa subsidiary, giving the combined company control over approximately 60 percent of TWTA sales worldwide. “Both the TTE and the AEG teams have learned a lot from each other and have helped us to address the market more comprehensively,” said TTE’s
Delbonnel. “We are now working on a global marketing strategy.”
The impending sale of Thomson-CSF poses a variety of possibilities for restructuring the European microwave industry. Several major conglomerates, including the UK’s GEC group, an alliance between Alcatel Alsthom and Dassault Electronique, and the Lagardere group, which owns Matra Marconi Space, have expressed interest in Thomson-CSF. Whatever the outcome, it is likely that the new stakeholder or owner of Thomson-CSF will hold a significant share across a slew of products in the European microwave market.
Most significant is the fact that the majority of the microwave industry is now looking towards telecoms for contracts. The pace in telecoms is largely dictating how fast suppliers are required to move. In addition, technological expertise is undoubtedly playing its part. Tekelec Temex’s contact with the market has led it to develop a new antenna for the Digital European Cordless Telecommunications (DECT) market. This product is a patented binocular antenna embedded into a two-sided PCB. With the DECT market poised to grow, the company not only stands to gain directly but is also toying with the possibility of licensing the product to other manufacturers and original equipment manufacturers.
“The key to our success is flexibility,” said Pascall’s Burman. “We engineer our products in such a way that they can be tailored to suit a variety of needs.” While this approach may have some shortcomings — as in not being able to compete in price for niche products — for companies like Pascall it is a trade-off that ensures that they can cover 80 percent of their potential market.
Of course, pricing strategies are one of the most important ingredients of success. Some innovative pricing tactics are emerging in the mobile market where the price of handsets is being subjected to immense pressure. SAW filter and MMIC manufacturers are being pressed to stick to a price regimen that leaves slim profit margins, which are realized only in high volume production. But the same SAW and MMIC components are often required in base station manufacture, an area that is less price sensitive; some companies are using this opportunity to recover lost revenue. However, fierce competition is here to stay in this arena as base station volumes are of the order of hundreds while supplies to handset manufacturers are sometimes in excess of 100,000.
It is key to formulate and stick to a long-term strategy as far as pricing is concerned. The sharpness of customers has given manufacturers a better feel of what prices will be accepted and, across the industry, the approach to pricing is infinitely more commercial than before. “We want long-term contracts and, therefore, do tactical pricing in order to achieve what we perceive is a more safe business,” said Pascall’s Burman. In fact, there is now more interaction with customers than ever and specification is often traded for price during negotiations. “The important change is that customers do want to work with us on price,” Burman added.
Some of the larger companies have distributed manufacturing over several sites, including in China and the Philippines. For instance, UMS spreads packaging and back-end processing of its GaAs devices over two or more sites. Other companies, such as Pascall, have a range of international sales and marketing agreements. Pascall also hopes to secure a reselling agreement with a US-based manufacturer.
Defence: Still Active
Without doubt, all the transformation of the industry over the past five years has whittled down defence orders to a fraction of what they used to be. But, for many companies, although the defence market is down it is not out yet. “The defence industry is our core business,” said Simon Mathias of GEC-Marconi’s Materials Technology division. GEC-Marconi, based in Northamptonshire in the UK, has been one of the leading research and development centres for GaAs technology and still has one of the most advanced foundries. “The defence market provides a lion’s share of our workload,” Mathias said.
Although the company has been addressing some commercial needs, it has come to specialise in offering foundry services. GEC-Marconi has pioneered a number of processes that are important to commercial manufacture but, so far, it has been able to support only low volumes. “The setup required and costs for volume manufacture do not let us compete in the high volume markets, for example, cellular handsets. We concentrate on the niche markets such as wireless local area network [LAN], high performance LAN [HiperLAN] and microwave links,” Mathias said. But the niche that the company has carved for itself is beginning to diversify. Defence contracts continue to dictate strategy but are now also coming from outside the UK as well, including France, Germany, Italy and the US. Although GEC-Marconi’s portfolio is still limited, it is considered exclusive. Approximately 50 percent of the foundry business now comes from across Europe; a significant part of the remainder is from other companies in the GEC group. But increasingly, even those within the group are not obliged to use this in-house resource — GEC-Marconi must bid for these contracts just as for any other order.
“The only direct European competition we see is from UMS with whom we compete heavily in certain markets,” Mathias said. As evidence of this fact and the cross linkages in the industry, companies with captive supply from around the globe approach GEC-Marconi for fabrication services. GEC-Marconi’s facility also has the capability to offer design services if required. “This provides our business with an edge in the foundry field,” Mathias said. As an industry leader in technology, GEC-Marconi is now in the process of developing products for 38 GHz frequency applications such as the multipoint video distribution system (MVDS), which will allow telecoms operators to offer high data-rate services, including video-on-demand, through a wireless medium.
Although Mathias did not foresee immediate changes in the company’s defence-reliant strategy, MVDS and other commercial applications that the company is addressing have the potential to become mass products calling for high volume manufacture. The company is planning to use a PHEMT process to develop 38 GHz products; MESFET processes, it believes, do not operate efficiently at frequencies above 20 to 25 GHz. GEC-Marconi’s commercial clients now come from a variety of industries ranging from space to wireless LAN. The company is also targeting the potentially huge HiperLAN market with 5.2 GHz products.
In the short to medium term, two other facts suggest that the GEC group of companies as a whole could undergo significant changes. The group recently appointed a new CEO, George Simpson, who is well known for initiating changes that could induce the organisation to adopt an altogether commercial approach. In May, GEC confirmed that it would bid to acquire Thomson-CSF — evidence of the organisation’s strategy to win new markets by acquiring the competition.
Another major player in defence microwave and electronics, Dasa is also a strong contender for acquiring a stake in Thomson-CSF. Germany-based Dasa is a group for which the defence market continues to be significant although, over the past five years, it has been successful in increasing its commercial business as well. During this period, Dasa has taken over Telefunken Systemtechnik AG, which has been rechristened as the group’s Data Sensor Systems Division. In addition, Dasa is one of UMS’s parent companies and also has dispensed with several smaller divisions to enable it to concentrate on core businesses.
In spite of wide-ranging reductions in German defence expenditure, Dasa considers itself a defence-oriented company although civilian sales, which accounted for approximately 10 percent of total sales until a couple of years ago, are slowly creeping up. In Germany, Dasa is the number one company in the field of radar and, in the medium term, it will be the only one with comprehensive competence in the ground, naval and airborne radar fields. Its strategy is to become the electronic warfare company in the European market and to concentrate on radio reconnaissance, radar missile homing heads and fuse sensors. Dasa’s industrial production competence includes a microwave facility as well as a GaAs foundry.
Despite being a shrinking sector of the market, defence is still important for smaller companies as well. “The cake is much smaller now; about half of what it was in the UK 10 years ago,” said Pascall’s Burman. “But we get a bigger slice of it today.” Burman believes the drastic cuts of the early 1990s caused a massive shakeout of customers and markets. As a result, there are now fewer suppliers and buyers. However, these few suppliers have a wider range of products than ever before. The share of defence in Pascall’s current sales is approximately 30 percent and Burman sees this share remaining more or less constant in the short to medium term. “It is still a big market, even though it is not growing any more.”
Future Challenges
In reality, the fact that the defence market still exists and is important is actually helping the microwave industry in Europe to become more commercial. The defence establishment of many organisations supports commercial manufacture. Many of its technologies are still being re-engineered for civilian use, thereby saving on design and development costs. But the challenge for the industry is to understand and respond to both markets while retaining two different identities simultaneously. For some organisations, while engineering expertise is abundant, the need for commercial market intelligence is crucial. “Forecasting and marketing intelligence for up to two years or more is key to success in the satellite market,” said TTE’s Delbonnel. For instance, the current boom in satellite manufacturing was sudden and could not have been forecast, Delbonnel said. Although the AEG acquisition has helped TTE, the fact remains that the company would be open to market risks, a phenomenon that was relatively unknown in the days when orders from the military helped sustain the industry.
The Global Positioning System (GPS) market, which many companies had expected to be a multimillion-user market by now, is still in its initial stages. Michel Fache of Dassault Electronique, which acquired Sercel, a GPS company, believes that “only 20 percent of this market has been explored so far.” But at the same time, addressing larger markets requires a tailored strategy. “The future lies in low cost modularity not in high scale integration,” Fache said. Modules with one or two chips each would help customers reduce cost and size while providing user configuration flexibility.
The satellite broadcast market also holds a lot of promise for the European industry. “In the geostationary satellite market, 85 percent of our business is because of the broadcast market,” said Radiall’s Pellizzari. Some of the large geostationary satellites being deployed now will have more microwave components than an entire constellation of LEOs and MEOs, he said. In the same market, Tekelec Temex is a leading supplier of components for receiver equipment. “The arrival of the digital broadcast market is expected to increase sales phenomenally,” said Tekelec’s Euvrard.
SAW filter manufacturers and GaAs specialists also see the broadcast market as one with a lot of potential, as is the cellular handset market. But the challenge is to ensure quality in spite of falling costs. According to UMS’s Dämbkes, sales to handset manufacturers accounted for nearly 90 percent of the company’s high volume manufacturing sales. To maintain acceptable levels of quality, the company has devised a four-level process of qualification including inspection of each finger and connection (military grade), inspection under a 200x magnification device (commercial grade for the automotive and space industries), optical inspection under a microscope (consumer grade for radio links) and sampling of devices produced in large quantities (mainly for the handset market). Such graded qualification is helping UMS tailor products to specification.
In general, the cellular market is high volume, high return and high risk. Competition exists on a global scale and it is only the explosion of the market that is ensuring that there are enough orders to go around. In addition, as pressure on costs increases, so will the demands on manufacturers. “If the television market is any indication, SAW filter prices are slated to drop to about the $1 level,” said TMX’s Maerfeld. However, he does not expect that price drop to happen in the near term.
As the wireless market matures, telecoms operators are expected to move to higher frequencies to allow them to offer higher bandwidth services to their customers. Despite the fact that the microwave industry is already gearing up to cater to this market with 38 GHz products made with PHEMT technology, the pressure to move to even higher speeds will be an inevitable reality. In Switzerland, the Swiss post, telephone and telegraph service is already poised to roll out a 40 GHz MVDS service with equipment supplied and developed by Philips of the Netherlands. As these higher frequency services begin to be deployed by operators, the demand for radio links is also expected to increase on the backbones of telecoms networks. Dassault Electronique is now developing an interface between fixed-fibre and microwave links. “Fibre-microwave interfaces have the potential to become major backbone applications for the operators,” said Fache. Radiall’s Pellizzari said: “When working with telecoms customers, we are already thinking about second-generation products even when the first generation is in process.”
“Wireless LAN is the next big market waiting to happen,” said Fache. “With HiperLAN standardisation nearly complete, we expect to launch a range of products.” While Europe has decided on 5.2 GHz as the preferred HiperLAN frequency, the US appears to be moving towards 5.7 GHz. This could mean that European manufacturers would need to make dual-frequency terminals, much like the microwave links producers.
In fact, standardisation is going to be a crucial issue and European companies will need to back the industry’s standard-setting bodies in order to stay ahead of the rest of the world. “GSM is one of [the] most buoyant systems [in existence] today and its establishment as an international standard is evidence that the regulators and the industry can work together,” said TMX’s Maerfeld. “We now need to work on a broadband standard and develop UMTS, the universal mobile telephone standard.” The UMTS is slated to replace existing mobile standards in the long term and provide high speed capabilities.
This vision to act collectively and formulate a commercial strategy is evidence of the evolution that European microwave manufacturers have undergone. From an industry that was layered and vertical, it is now proving to be flexible, reactive and increasingly commercial. According to Radiall’s Pellizzari, “With commercialisation, the microwave industry, besides becoming more open, has changed into a more structured and predictable environment where project management and times to market are as critical as quality and testing.
DAIMLER BENZ AEROSPACE AG
Dasa’s service centre for Technical Operations and Services in Ulm, Germany, which belongs to the recently restructured subdivision of Defence and Civil Systems, is experiencing a push for the exploitation of mm-waves. The high demand is coming from telecoms for the supply of short-haul microwave links. Dasa is also concentrating its efforts on catering to the growing demand for components in the field of microwave/mm-wave RF front ends. With approximately 20 years of experience in mm-wave technology, Dasa is now offering a new service to the microwave market called M5 — micro/mm-wave module engineering and manufacturing services. From module design to foundry services to high volume manufacturing and testing, Dasa now provides the entire process chain as a single source.
DASSAULT ELECTRONIQUE
Dassault’s 1995 sales topped $800 M and since have been increasing steadily. As a system house and equipment supplier, the company has developed significant capability in a wide range of electronic design, development and manufacturing technologies, particularly in MMICs on GaAs and microwave multichip modules (MMCM). Success with more than 400 MMICs and MMCMs has demonstrated Dassault’s capabilities to offer a wide range of products and services including design and manufacture of customised microwave systems, packaging service for MMIC functions, on-wafer automated tests for the characterisation of components, and studies and tests in severe environments. With these capabilities the company addresses a variety of industries including telecoms, automotive, process control, space and defence with products such as amplifiers, filters and duplexers, phase shifters and receivers.
GEC-MARCONI
The GaAs activity at GEC-Marconi Materials Technology has a long track record based upon the commencement of materials research in 1962 and the release of the world’s first commercial GaAs FET in 1970. The GaAs MESFET-based MMIC was released in 1976, and has been followed by the introduction of commercial foundry services operating up to 40 GHz and the demonstration of increasingly complex multifunction MMICs. The company has invested in a fabrication facility to address the rapidly evolving market for GaAs components. The 1600 sq. m facility features class 10 and 100 clean modules and three-inch-diameter GaAs wafer processing. The company is preparing to introduce PHEMT for 60 GHz operation and heterojunction bipolar transistors.
PASCALL
Pascall’s manufacturing activity, which commenced in 1980, was centred around logarithmic IF amplifiers. By making use of conventional circuit board and surface-mount technology for its designs rather than the more commonly used hybrid approach, Pascall is able to offer high levels of electrical specification coupled with a degree of flexibility not available from competitive sources. This capability resulted in Pascall becoming the major supplier of logarithmic amplifiers to the Tornado aircraft RHWR programme. SSPA activity began in 1989. The SSPA manufacturing operation located at Macclesfield in the UK is dedicated to the design and manufacture of high power amplifiers using silicon bipolar, GaAs FET device and MMIC technology.
RADIALL
Based in suburban Paris, Radiall specializes in connectors for a wide range of applications. With a 1996 turnover of more than $150 M, as shown in Figure 1 , the company has had success in the manufacture of space-qualified coaxial attenuators and switches, coaxial terminations, coaxial couplers and other devices. 
These products have been sold to the GSM and other cellular markets, microwave test networks and the space industry. In 1996, the company invested 8.2 percent of its revenue in research and development, which it highlights as one of its strengths. Product design relies on modern methods, for example, numerical simulation and fast prototyping.
SIEMENS+MATSUSHITA
S+M is part of the Passive Components and Electron Tubes Group of Siemens AG and markets its products through the worldwide Siemens sales network. Microwave ceramics is the latest technology to emerge from the S+M facility in Deutschlandsberg. The company’s SAW components from Munich are now key devices in television sets, video recorders, satellite receivers and mobile telephones. Each year, more than 100 million SAW components are shipped from the Munich facility, which has a production area of 10,000 sq. m. More than 10 percent of sales revenues flow back into research and development.
SAT
Although not active in the military market, SAT, part of the France-based SAGEM group, is well known for its wireless technology and products. Its new Urbicom-2 point-to-point digital microwave link offers a wide range of channel capacities (from 2 ¥ 2 to 34 Mbps) and frequencies (7 to 38 GHz). With this product family, system configuration and management parameters can be selected through software based on a five-key keypad and menu-driven display. A built-in management module is available for larger networks. Additional features include frequency-agile operation in 250 kHz steps and a 30 dB dynamic range for transmitter output power adjustment in 0.5 dB steps. According to SAT, the product is well suited for GSM, DCS-1800, leased line and power/transport utility networks.
TEKELEC TEMEX
Tekelec Temex is one of the two main subsidiaries of Tekelec Telecom, a privately owned French company with sales of $100 M and 5000 employees worldwide. Tekelec Temex has been famous for its capacitor range since the early 1960s. This range includes multilayer ceramic, tantalum, mica and variable capacitors. In microwave, the company offers five product lines, including microwave silicon diodes, ferrite devices (circulators, isolators and phase shifters), RF filters, RF modules (amplifiers, mixers and IQ modulators) and microwave ceramics (ferrites and dielectrics).
THOMSON MICROSONICS
TMX is a 100 percent subsidiary of Thomson-CSF and has been designing and manufacturing SAW devices since 1966. To handle the rapid growth of commercial markets, a new facility was built in 1983 and expanded in 1990 and again in 1996. Several million SAW components are shipped each year to more than 10 countries. Exports represent 80 percent of sales. Two SAW design centres exist: one center is collocated with the factory in Sophia-Antipolis in the south of France, and the other is in Connecticut in the US. Products include delay lines, dispersive delay lines, phase correlators, bandpass filters, low loss DART and resonator structures.
THOMSON TUBES ELECTRONIQUES
Since the acquisition of AEG’s electron tube business, TTE is acknowledged as a leading producer of tubes for professional applications. With annual sales of $340 M (two-thirds of which are generated in export markets outside France and Germany), TTE covers the entire power range up to and exceeding 3 kW, from 1.5 to 44 GHz. Production capacity spans an area of 60,000 sq. m at two sites: Velizy, France and Ulm, Germany. The production line meets all military requirements for systems operating from 1 W to several megawatts. Approximately 13 percent of average revenues have been invested in research and development.
UNITED MONOLITHIC SEMICONDUCTORS
UMS’s GaAs activities are based on two production sites. Front-end wafer processing is performed in approximately 1400 sq. m. clean rooms at Ulm, Germany. The wafer fab encompasses two processing lines, one for four-inch wafers and one for three-inch wafers. The four-inch wafer line is highly automated and uses a silicon-like processing technology suited to large-volume production. The production capacity is 5000 and 10,000 wafers per year for the three- and four-inch wafer processes, respectively.
Back-end processing is performed in Orsay, France and includes wafer back-side processing, dicing and visual inspection of the components. More than 10 automatic test stations, including high volume handlers and testers, enable characterisation of components in the 1 to 100 GHz range. A wide range of technologies also is offered in foundry mode for the development of application-specific ICs.