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WESTBOROUGH, Mass., Sept. 8, 2003 — Great ideas abound for new products and devices; but, as they say, the devil is in the details. In small tech devices, those details can get ever more devilish.
The engineers at Intrinsix Corp. know this. So they make a living lining up all those details the right way, hoping to exorcise the devil and uncover the hidden profits.
“The concept has always been to help engineers develop highly integrated electronics,” said James Gobes, one of Intrinsix’s three founders and the chief executive officer. “The more complicated, the better.”
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The concept is difficult to dispute, given the company’s $20 million in annual revenues and profits for almost all of its 18-year history.
Intrinsix specializes in system-on-chip devices for large customers such as Texas Instruments Inc., Motorola Inc., IBM, Samsung and others. They work with customers’ in-house design teams to assemble controllers, digital signal processors and any other components they may have into a working device.
Gobes founded the company in 1985 with college roommate Mark Beal (now Intrinsix’s chief technical officer) and Romas Rudis, a professional acquaintance who has since left the company. Their first line of businesses involved design assistance for electronics devices and hardware that accelerated new product simulations.
Today, 90 percent of Intrinsix’s business is designing new system-on-chip devices. It often works on cell phones, hand-held computers, RFID (radio-frequency identification) chips, medical devices and similar products that use wireless technology to communicate. One product went into a “kid detector” for parents to monitor their children. Intrinsix also designed a video processor for Texas Instruments that goes into digital televisions, and an implantable sensor to detect epileptic seizures.
The challenges are formidable, Gobes said. “System-on-chip is a lot harder. You’re pulling together a lot of things you didn’t create,” he explained. Especially vexing is testing a product design to ensure that all components work together. Every vendor claims its product will function perfectly well, but Intrinsix must test the design under a host of different conditions.
“The trick is to find out how something does not work,” he said.
Prakash Narain, chief executive of Real Intent Corp., a Silicon Valley company that makes software tools for design verification, agreed that design testing is more vital for system-on chip or microelectronic devices, where you can’t simply swap out a malfunctioning part.
“It’s a very big problem,” Narain said. “Systems-on-chips are becoming a dominant way of doing design.”
Ramin Hojati, president of Averant Inc., also in the design verification business, said the advent of small tech has increased the importance of device design and testing. One flaw discovered too late can delay manufacture for months, potentially ruining a company’s profit margins.
“The cost of that goes up as you go down in the geometry chain,” he said. And as more components are crammed onto a single chip, the odds of encountering a design flaw soar.
Since Intrinsix works with large businesses to develop new devices, its travails serve as a barometer for overall economic activity. Gobes said the recession made for a difficult 2001 and 2002; customers shelved new product development, and “the finance people” clamped rigid controls on new spending. Intrinsix downsized and suffered a loss last year, although Gobes won’t divulge how much.
He now believes the worst has passed. He expects new product development to accelerate — slowly this year but more quickly in 2004. Josh Schissler, Intrinsix’s head of business development, is bullish that many disparate elements of intellectual property exist out there, waiting to be combined into new products; that should give Intrinsix ample business opportunity for the foreseeable future.
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Company file: Intrinsix Corp.
(last updated Sept. 8, 2003)
Company
Intrinsix Corp.
Headquarters
33 Lyman St.
Westborough, Mass., 01581
History
Intrinsix was founded in 1985. Profitable from early on, the company began a strict focus on third-party design services in 1991. It now bills itself as the largest independent electronic design outsourcing company. In May 1998, Intrinsix announced its acquisition of the Pennsylvania-based VHDL Technology Group, in mid-1999 it merged with Seva Technologies, and late that year it bought the Telexis design engineering business. In 2001, Intrinsix expanded its design center locations to include Germany and Israel.
Industry
Electronic design and verification
Employees
100
Small tech-related products and services
Intrinsix offers design services to clients in the electronics industry. These services range from full-scale product development to subsystem, SoC (system-on-chip), ASIC and embedded system design. Intrinsix generally works in partnership with clients’ design groups. Roughly 90 percent of the company’s projects center on SoC design.
Investment history
Intrinsix withdrew an IPO in December 2000 due to poor market conditions. The underwriter was Robertson Stephens.
Revenues
$28 million (2002)
Selected strategic partners and customers
Selected competitors
Barriers to market
Intrinsix must meet the challenge of successfully testing its design in a variety of conditions to ensure that all components integrate properly. Otherwise, they run the risk of delaying their clients and losing profit in this price-driven environment.
What keeps them up at night?
“During the recession, it was just finding customers,” said CEO James Gobes. “It was the jeopardy the company was in. … Virtually every employee was touched personally by the downturn. Now I sleep pretty soundly.”
Contact
— Research by Gretchen McNeely