On 1 December Avago Technologies started operations as the world's largest privately held independent semiconductor company. Its creation follows the completion of the acquisition of Agilent Technologies Inc.'s Semiconductor Products Group by Kohlberg Kravis Roberts & Co. (KKR) and Silver Lake Partners in a $2.66 B transaction, which was originally announced on 15 August 2005.
Avago Technologies is co-headquartered in Singapore and San Jose, California, US, and begins operations with 6,500 employees of which 1,000 are analog design engineers. The company has over 35 years of operating history in Asia, where approximately three-quarters of its employees are located and where a significant portion of its products is produced. Its presence in Asia places it in close proximity to many of its customers and to the center of the worldwide electronics supply chain.
Avago Technologies Europe starts with a total of 220 employees in seven different countries. Sales & Marketing is headquartered in Boeblingen, Germany, and all 108 employees there have transferred from Agilent to the new company. Avago Technologies Europe has an R&D site in Turin, Italy, a design centre in Germany and one in the UK, as well as a sales presence in seven countries.
Globally Avago Technologies maintains highly collaborative design and product development engineering resources around the world, including five design centers in Asia, four in the United States, together with the two in Europe. It differentiates its business through effective supply chain management, strong worldwide distribution channels and a highly variable, low cost operating model.
The company has an extensive portfolio of more than 5,500 products, which are sold into a broad set of applications and end markets, including wireless and wired communications, industrial, automotive, consumer electronics and storage and computing. Avago products are sold to more than 40,000 customers through both a worldwide distributor network and direct sales force.
"Our strategy is to leverage our substantial intellectual property, design expertise and system-level knowledge to win in our markets," said Dick Chang, president and CEO of Avago Technologies. "We'll continue to provide the innovative products that enable our customers and that have established our market leadership positions. We'll also continue to drive profitability through a highly variable, low cost operating model, and we'll capitalize on our new independence by developing an efficient, stand-alone cost structure."
James H. Greene, Jr., a partner at KKR and an Avago board member, said, "This is a momentous day for Avago Technologies. We believe its strong history of innovation, many leadership positions, world-class global supply chain and excellent reputation for outstanding customer service to the world's leading OEMs will produce solid revenue growth and returns."
Likewise, John R. Joyce, a managing director of Silver Lake and an Avago board member, said, "Avago Technologies is a customer-focused semiconductor company with great potential for growth. Given its strong intellectual property foundation of more than 2,000 patents, global scale, talented management team, dedicated employees and cost efficient operating structure, Avago is already well on its way to becoming a true semiconductor powerhouse."