electronica: Agilent Maintains R&D Despite Downturn
By David Manners, Electronics Weekly -- EDN, November 15, 2002
Agilent Technology Inc.’s response to the recession has been to accelerate its semiconductor product development program and switch its R&D funding to close-to-market areas.
"We don’t know how deep or how long this downturn will be, but we know sooner or later it will finish," Raffaele Gatta, Agilent’s VP for Europe, said at electronica in Germany. "Our answer has been to produce more new products, in a shorter period, than at any time in our company’s history."
Declining revenues mean that in order to maintain the same R&D spend, Agilent is now spending 16 percent to 17 percent of sales on R&D, compared to its traditional 10 percent to 11 percent spend. Consequently, the focus of the R&D has shifted.
"We cut back R&D in optical because the recovery in optical is two to three years away," Gatta said. "We’re prioritizing areas where the upturn will come earlier -- we’re focusing on areas where you can get business today. For instance, you can’t get money for 3G manufacturing but you can get it for 3G R&D because 3G R&D is funded in Europe by the E.U."
The company has also cut costs, he said. "By moving from the classical test approach, toward controlling the manufacturing process," Gatta said. The high importance of time-to-market means that Agilent must do just enough test and just enough process control, he said.
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