Businessmodel of Maxim Integrated

Customer Segments

Maxim has a niche market business model, with a specialized customer segment. The company targets its offerings at firms across industries that need linear and mixed-signal integrated circuits for their products. It serves five primary end-markets: Automotive, Computing, Communications and Data Center, Industrial, and Consumer.

Value Proposition

Maxim offers two primary value propositions: risk reduction and brand/status.

The company reduces risk through a rigorous assessment of its products. The process evaluates reliability and quality at every stage from initial design to final shipment. Specific procedures include reliability stress testing, failure analysis support, lot traceability, and comprehensive parametric testing at wafer acceptance. As a result of its diligence, Maxim has obtained ISO 9001/2, ISO 14001, and TS 1694 certifications for its wafer fabrication, assembly, and shipping facilities.

The company has established a strong brand as a result of its success. It is listed on the MSCI USA, NASDAQ 100, and Russell 1000 indices. It has also won many honors, including the Impact Award for the Analog & Mixed Signal Category from ECN (2015), the Innovation Award for Power Management from EDN China (2015), recognition for “Product of the Year“ from Electronic Products (2014), and recognition as one of the “100 Most Trustworthy Companies“ by Forbes magazine (2014).

Channels

Maxim’s main channels are its direct sales and applications team and third-party distributors such as Avnet Electronics; it also sells products through its website. The company promotes its offerings through its social media pages, attendance of trade shows, and distribution of an e-mail newsletter.

Customer Relationships

Maxim’s customer relationship is primarily of a self-service, automated nature. Customers utilize its products while having limited interaction with employees. The company’s website includes a “Support Center” with self-help resources such as videos, selection guides, reference designs, and app notes. In addition, there is a section featuring answers to frequently asked questions. That said, there is also a personal assistance component in the form of phone and e-mail support.

Key Activities

Maxim’s  business model entails designing, developing, and manufacturing linear and mixed-signal integrated circuits. The company utilizes its own wafer fabrication facilities and third party-foundries (namely Taiwan Semiconductor Company Limited) for wafer production.

Key Partners

Maxim’s key partners include its major suppliers, Seiko Epson Corporation (Epson), Maxchip Electronics Corp. (Maxchip), and Powerchip Technology Corporation (Powerchip).

The company also maintains the following design partnerships that provide its customers with value-added products and services:

Independent Design House (IDH) Partners – Help speed up time-to-market for products for various applications at any phase of their lifecycle. Specific partners include Logic PD, Tensentric, OTEC, TEConcept, Catron, Xcedent, IOT, Team Concepts Ltd., Design Shift, and SCS Pro.

Solar Equipment Providers – Develop products that feature Maxim’s solar cell optimizers. Specific partners include Jinko Solar, ET Solar, Solar Junction Box Partners, and Zerun Electronics.

iButton Authorized Solution Developers (ASDs) – Create complete hardware and software solutions using Maxim’s iButton devices for various applications. Specific partners include Access Controls International, Blue Tech Automacao, Cansec Systems, Deggy Corp., ElbaTech, and FlexPark.

FGPA Power Technology Partner – Xilinx, a company that works with Maxim to provide power solutions for the Virtex Ultrascale and Kintex Ultrascale reference designs.

Lastly, Maxim operates Maxim Ventures, a program through which it works with innovative startups to build products that bridge the distance between the digital computational and analog measured world. Specific benefits for these partners include:

• Financing from Maxim’s $200 million venture fund for seed, early, and mid-stage investments
• Early access to the company’s enabling microchip, security, and sensor technologies
• Access to Maxim’s worldwide partner and customer networks
• Access to Maxim’s best business leaders, technologists, and support teams ### Key Resources

Maxim’s main resources are its human resources, who include 2,500 engineers with expertise in areas that include electronic design automation, circuit design, packaging development, software development, and applications support. The company also depends heavily on physical resources in the form of its three water fabrication facilities in Beaverton, OR, San Antonio, TX, and San Jose, CA.

Cost Structure

Maxim has a cost-driven structure, aiming to minimize expenses through low-price value propositions. Its biggest cost driver is cost of goods sold, a variable cost. Other major drivers are in the areas of research and development, sales/marketing, and administration, all fixed costs.

Revenue Streams

Maxim has one revenue stream: the revenues it generates from sales of its circuits to customers. Pricing must be obtained through contact of the direct sales team.