Executive Interview: George Holmes, CEO of Resonant
What’s the history of Resonant, and what prompted the company to enter the market for mobile filter design software?
Resonant was founded in 2012 by Bob Hammond, Neal Fenzi and Terry Lingren. Bob and Neal were colleagues at Superconductor Technologies in Goleta. They had been working on the design and delivery of filter products to support the base station infrastructure side of the mobile market.
As the demand for mobile filters began to rapidly expand, in large part due to new smart handsets, they identified a need to develop mobile filters faster, better and more cost effectively. Their secret was using software simulation versus hardware iteration, which was typical in mobile handset filter design.
As STI began its plans to exit the mobile market, Bob and Neal negotiated to spin out certain elements of their technology into a new company that they called Resonant. Terry joined them from Kyocera, bringing mobile handset experience.
Discuss your design (including IP), manufacturing and test partnerships and how they enable new filter suppliers.
Traditionally, mobile filters have been designed and manufactured in vertically integrated tier 1 manufacturers, such as Murata, Taiyo Yuden, Broadcom and TDK EPCOS, using empirical and iterative design methods. Resonant has developed a filter design software platform called Infinite Synthesized Networks, or ISN, which relies upon extremely accurate models based upon materials properties and physical dimensions. This allows filters to be optimized in software, rather than through fab turns. The accuracy of this tool allows Resonant to characterize any fab and then design filters that are competitive with filters on the market today from tier 1 manufacturers.
The ability to characterize any fab has created an opportunity to open up a totally different supply chain model, more characteristic of the fabless/foundry supply model prevalent in the rest of the RFIC market. At Resonant, we have developed a large IP portfolio, consisting of patents, trade secrets and know how, that, when coupled with our ISN platform and a characterization of a specific fab, allows Resonant to deliver designs to customers that are technically competitive and cost effective.
Outline your portfolio of IP standard filter products and what frequency range you cover.
The overall mobile market transition to 5G is creating a tremendous opportunity to more rapidly deliver 2G, 3G and 4G solutions to mobile device manufacturers that need to get to market faster with lower costs. Resonant is able to reduce the time to market of the designs with our Filter IP Standard Library, introduced in December of last year. Our filter library allows fabless customers access to filters from foundries without having to wait for the custom development of filters, providing rapid time to market.
The initial focus for our library products is on more difficult designs, which also have the most value, from 1.7 to 2.7 GHz. These include quadplexers, duplexers and wide bandwidth TDD filters. In the future, we plan to cover all of the major global bands for 2G, 3G, 4G and 5G.
Having adopted a fabless model, where you rely on foundries to manufacture your filters, how do you choose your fab partners and ensure your simulation capabilities reflect their processes?
I would rephrase the question slightly, in that Resonant has been developing the fabless/foundry ecosystem for mobile filters over the past couple of years, as this did not exist prior to our identifying this as a critical need, as volumes continue to increase and 2G, 3G and 4G filters become commoditized.
As part of our ISN foundry program, we surveyed potential partners and ran fab characterization wafers through their fabs in order to both evaluate the performance of the fab and also provide the necessary materials properties and physical dimensions to prepare our models for designs through those fabs.
Once qualified, the most important factor for consistent, high performance designs is that the process remains stable. Hence, we work with the foundries using our PMTx tool, which is part of the ISN platform, to monitor the critical fab parameters to ensure that the process is under control.
You have a unique business model. How do you generate revenue?
Resonant is a licensing company and does not manufacture physical products. Unique to the mobile filter industry, our business model is to develop designs for our customers that are manufactured either at the customer’s own fab or one of our foundry partners, and then we are paid a royalty on each part that is shipped using that design — typically as a percentage of the price.
A royalty business model has pros and cons. We are several layers removed from the end customer, which means that revenues are not directly predictable because we rely on the success of our customers to compete effectively in the market. And because we do not manufacture the parts, there is minimal overhead or capex. Thus, the model is highly efficient, with most of the revenues flowing through to the bottom line as earnings.
The mobile filter market has been dominated by a handful of vertically integrated SAW and BAW filter manufacturers. Your strategy seems intended to disrupt this traditional model. How will this benefit Resonant?
The growth constraints or limitations for a market limited to a few vertically integrated manufacturers has been highlighted in the filter market with the acquisition of TDK EPCOS by Qualcomm. Suddenly, a key supplier to many filter companies now becomes a competitor, and a major supply of filters is disrupted, which could potentially put these companies out of business. This is not a sustainable model for a substantial and growing market such as mobile filters.
The disruption to this traditional model that we are driving is fueled by enabling as many new entrants that want to enter this market, to do so with a stable supply chain. These new entrants include power amplifier and switch companies that want to compete in the RF module space; RF component companies, already on the OEM approved vendor list who want to offer filters. Longer term, phone OEMs themselves could participate in this market.
This is a growing market, and the more competitors there are, then the more customers will be reliant on Resonant designs.
Although you’re a publicly traded company, you’re a start-up, still raising money to fund your operations until you get to a sustainable level of revenue. You last announced a $10 million round. How will you use this funding and how long will it carry you?
The new funding will be used to continue our strategy of developing standard filter IP library designs that can be licensed and manufactured through our foundry partners, in addition to continuing to develop filters for 5G.
Our expenses are between $5 million and $6 million per quarter, and we are at the early stages of royalty revenue from some of our early designs. The ramp in royalty revenues will determine how long this last fund raise will last.
This last funding round was led by Murata. Discuss your relationship with Murata, as their interest is likely more than simply being an investor.
We don’t discuss our customers except as required for public disclosures, which was the case with the press release we issued regarding the signing of the definitive agreement to invest and sign a commercial agreement with Resonant to leverage our XBAR resonator technology, that we believe is ideally suited for 5G applications.
What success are you having in the market, such as design wins or customer engagements?
The most obvious success we are having in the market is that we have 11 customers, both tier 1 filter manufacturers and new market entrants, and more than 80 contracted designs. The fact that we have more than one design per customer is also very telling. Typically, a new customer will contract for a single, usually difficult, design, but long before that design is complete, they will come back for more designs, having realized the power of working with Resonant’s tools, team and technology.
So far, only some of our early designs have made it into phones, as it is a long development and qualification cycle to a design win at a phone OEM. However, we continue to improve our design cycle time and have gone one step further in helping our customers with design wins, by assisting them in reliability testing and phone board system testing — something we did not envisage at the start of Resonant.
Your market focus has been on the sub-6 GHz handset bands. Do you plan to expand to infrastructure applications, such as small cells, or the 5G mmWave bands?
To date, our focus has been on the sub-6 GHz handset market because of the market size and match between Resonant capabilities and the market need for a disruptive technology to improve design efficiency and speed, to allow a much more robust filter supply.
However, we continue to monitor the opportunity in adjacent markets as those markets grow. In particular, the opportunity for high performance filters for infrastructure applications continues to grow as the number of access points increases in 5G, and the use of beam forming antennas boost the number of RF components for each antenna.
In this regard, we have leveraged our ISN platform to simulate two infrastructure products in the 5.2 GHz and 5.6 GHz frequency bands with what we believe is industry-leading performance.
Tell us about your background and the path to CEO of Resonant.
I have over 30 years of experience, beginning in finance and operations and migrating to sales and marketing. As a sales and marketing executive, I led organizations in telecom equipment, datacom and telecom components, optical components and board-based semiconductors. During the course of my career, I have been a key contributor in delivering shareholder growth in value in excess of $2.5 billion.
I was recruited to a public venture start-up called Energous that I helped take public in 2013 as its chief commercial officer. We closed numerous customer deals that led to a significant increase in shareholder value. This success precipitated interest from Resonant’s board, and I was hired as president and chief commercial officer in early 2016 and became CEO in January 2017 and chairman in 2019.