Rick Montgomery, a cofounder of Microwave Networks Incorporated (MNI), serves as CEO and director of Mimix. MNI was a supplier of point-to-point digital microwave radios that was founded in 1982 and successfully merged into California Microwave in 1995. In addition to founding a successful company, Mr. Montgomery has 30 years of experience in high technology companies in the areas of general management, international sales, research and development, and strategic product marketing. Mr. Montgomery received his BSEE degree from North Carolina State University.
MWJ - Rick, thanks for talking with us today. I understand your headquarters are in Houston, TX. Did Mimix Broadband suffer significant damage as a result of Hurricane Ike this past month? I would imagine you received a direct hit from the storm.
RM - Fortunately, our headquarters facility suffered no major damage, and while our disaster and contingency plan was tested, it proved to withstand one of the largest natural disasters in US history. We did lose power and water for a brief period of time, but otherwise our facility’s shut-down and operation restoration occurred with no major issues.
MWJ - Well, hopefully Houston will be able to recover as quickly as possible. You are a long time microwave guy. How did you get interested in the technology?
RM - I became interested in microwaves when I was at university in the early 70s. Most of the students then seemed to be more interested in digital circuits, but I was attracted to electromagnetics because I enjoyed the mathematics. I went to work at the equipment group of Texas Instruments (TI) out of school and worked on a number of military microwave systems. At TI, I found that I not only enjoyed analyzing and designing components but also being on the bench making measurements and tuning.
MWJ - How did you make the transition from technologist to business man?
RM - At Microwave Networks in the late 80s, I decided that I wanted to move into sales from my role as VP of engineering. I had always enjoyed going out to meet customers, so it seemed a natural transition for me. I was very successful helping to build Microwave Networks with sales first in Latin America and then in Asia. I moved to Singapore in the early 90s and grew the Microwave Networks business in Asia and established operations in the Philippines, Australia and China, along with Singapore. In 1997, California Microwave appointed me as president of the Microwave Networks business unit, located in Houston, TX.
MWJ - I read that Mimix Broadband underwent a name (formerly Shason Microwave Corp.) and organizational change in 2000 as part of a new business initiative to supply GaAs MMICs and modules to broadband wireless manufacturers. Early products addressed applications such as mm-wave point-to-point, LMDS, SATCOM and VSAT applications. How would you compare those markets today versus the ones you originally had your eye on?
RM - We address all those markets today with the exception of LMDS, which, as many of us in the microwave industry witnessed, never really lived up to its hype as the next generation, high volume wireless technology. Therefore, our original focus on PTP radio and Satcom applications remains today and these two markets account for a large portion of our business. We have expanded our product portfolio and diversified markets into the lower frequency applications, such as cellular infrastructure, WiMAX and CATV. Over the past five years, we have also focused on adding parts for our aerospace and defense business and that segment is now a significant part of our business.
MWJ - In 2005, Mimix Broadband bought the assets of Celeritek Inc. out of Santa Clara, CA. According to press releases at the time, the purchase was intended to diversify your product portfolio. What technology was most important to you at that time and which markets were you eyeing?
RM - While Celeritek had developed many key technologies, it was the diversity of products and technologies that made the offering and company so attractive. For example, Mimix focused on products from 18 to 50 GHz, where Celeritek had been a leading supplier of DC-18 GHz products that covered a variety of applications, such as wireless infrastructure, SatCom, CATV, aerospace and defense, home networks and WiMAX. Specifically, Mimix gained through this acquisition the capability to place our MMIC devices into standard QFN plastic packages, and even at millimeter-wave frequencies and high power MMIC design.
MWJ - Are certain products in your portfolio specific to the former Celeritek design group or has the goal been to assimilate that design knowledge throughout the entire design organization and develop diversified products at both facilities?
RM - Our design teams’ expertise and skill sets are complementary, and while each design group’s contributions tend to fall into product categories, we spend a lot of time sharing design best practices and lessons learned to ensure that we continuously improve our models and design techniques.
MWJ - In 2006, Mimix shed the GaAs foundry it had acquired with the Celeritek purchase (selling the foundry to USTI). Why sell and what do you see as the main benefits of being a fabless design center?
RM - As a fabless company, we focus on what we do best and that is designing MMICs, using the best technology available according to device and application requirements. We can match the best process for the application using any available foundry. Our costs are predictable and do not depend on fab loading.
MWJ - Is there a downside to being fabless?
RM - We believe the flexibilities of being a fabless organization greatly outweigh any benefits that might ensue from owning a foundry. I suppose the downside is that in times when your fab is full your wafer cost can be lower, if you own a competitive fab.
MWJ - How close is your relationship to your wafer fabrications partners? For instance, are you privy to new processes before they are available to others? Do you make suggestions to them concerning desired active or passive component performance or modeling concerns?
RM - We maintain close relationships with our foundry partners, periodically testing new processes, suggesting improvements to existing ones and recommending new process developments. Mimix develops our own highly accurate, non-linear models in addition to using those provided by our foundry partners.
MWJ - In March 2005, Mimix became a majority share holder in a Taiwanese MMIC test, inspection and packaging operation (Hocom Communications). At the time, you stated this facility had the benefit of being close to your wafer fabrication and packaging partners. Are all of your devices being fabricated in Asia? Would that be WIN Semiconductor?
RM - We use multiple foundry partners, both domestically and internationally, and WIN Semiconductor is one of those foundries. We were one of the first companies to use WIN’s .15um pHEMT process. Mimix Asia, as Hocom is now known, has been highly successful in shortening our manufacturing cycle time and in giving us additional capacity and an alternative site for testing, assembly, inspection and pick & pack.
MWJ - What do you consider to be the most significant advancements in GaAs MMIC technology since 2000 and how has it impacted your devices?
RM - Current market demands in wireless communications require that equipment suppliers lower costs and increase performance. As our company sees it, this trend forces MMIC design engineers to develop higher levels of product integration to meet these requirements. The key to this technology is the integration of four functions or more into a single MMIC. Integration offers a number of benefits for millimeter-wave components, including lower costs and variability of transceivers from using fewer parts, a smaller footprint area and a simpler design. It also reduces the need for off-chip interstage matching between RF components.
In addition to the development of highly integrated devices, increasingly more microwave and millimeter-wave devices are being housed in standard QFN surface-mount packages. The continued growth in wireless communications has placed tremendous pressure on component manufacturers to provide standard QFN surface-mount packaged products for large scale PCB assembly flow, in order to lower costs and ease handling and assembly for mass production.
MWJ - Which device characteristics are becoming most important to your customers?
RM - Higher power/more linear power amplifiers and more highly integrated devices at higher frequencies in plastic QFN packaging.
MWJ - Based on revenue, what is the ratio of MMIC chips (packaged or die) to modules that you sell? Do you have a preferred product type?
RM - The majority of our revenue derives from MMIC or FET products, with actual modules according to the traditional definition (includes housing, biasing, connectors, etc.) as a small percentage of our revenue. For further clarification, we also sell multi-chip products in a surface-mount package, which we sometimes refer to as modules.
MWJ - How much custom engineering work is Mimix involved in?
RM - Mimix works closely with our customers and a large percentage of our devices are driven by customer requirements.
MWJ - Reduced size and cost with increased functionality has certainly got to be among the top interests of your customers. Can you tell us about your new SmartSet products, how they perform and where you see them having the biggest impact?
RM - Mimix SmartSet devices are highly integrated chipsets that are housed in standard plastic QFN packages, offering a number of advantages including low cost, ease of handling and assembly, as well as suitability for mass production. These Mimix SmartSet solutions specifically address the technical requirements for next generation wireless communications and give design engineers the ability to create complete SMT radio boards for manufacture at sub-contractors, enabling lower costs and faster time to market.
We see our Mimix SmartSets gaining the greatest amount of traction and design wins in applications such as point-to-point (PTP) digital radio and commercial satellite communications systems (VSAT) at microwave and millimeter-wave frequencies.
MWJ - How’s the competition in this area?
RM - A handful of competitors do serve this area, but Mimix offers the advantage of not only offering highly integrated devices but also a comprehensive understanding of complete systems designs, allowing us to develop these complete Mimix SmartSet solutions for our customers and to specifically address their challenges and requirements.
MWJ - What do you consider to be among the company’s leading competitive advantages?
RM - Mimix has been a pioneer in developing highly integrated devices, offering Mimix SmartSet Solutions for several years now. Initially, we had to convince our customers about the value proposition of our design philosophy. Over the past few years, however, we’ve definitely seen a shift, and these same customers are now purchasing large volumes of integrated devices. Furthermore, a convergence of market imperatives is occurring, with the result being customers purchasing not only highly integrated devices, but those which are housed in standard QFN surface-mount packages. At Mimix, we have seen our value proposition enhanced as our customers require only three to four packaged high frequency devices to complete an entire transceiver.
MWJ - Do you see any other non-traditional markets emerging that could be a boon for the microwave industry?
RM - Millimeter-wave imaging for homeland security and networking for automobiles.
MWJ - I see in July you received $10 M of additional investment in a fourth round of institutional financing. What are your thoughts on the financial health of the microwave industry given all the turmoil on Wall Street and the ongoing credit crunch?
RM - We have continued to get feedback from our customers that their demand is strong going into 2009. Our business is dependent upon the health and performance of cellular infrastructure and aerospace and defense markets and less upon the consumer market. We serve a diversified market and customer base with a majority of our sales outside the US. We believe that this structure provides us with some buffer against the turmoil on Wall Street. With our latest round of financing, we have a strong balance sheet and sufficient capital to build our business. Our most recent investors are strategic investors in our industry with a history of building highly successful companies.
Well, Rick, it was certainly a pleasure talking with you. I appreciate your concise and straight-forward answers and wish you the best success moving forward.