As we enter our 20th year, programmable logic is moving from a niche technology to a mainstream market segment.

Programmable logic technology is advancing at a phenomenal rate. Our FPGAs now contain advanced processors, gigabitper-second transceivers, vast numbers of logic cells, and advanced features that were unheard of just two short years ago. Plus, weve lowered our pricing significantly across the board, due to our use of the most advanced 90 nm processes and other leading manufacturing technologies. We have progressed far in a very short time and theres more on the way.

During the last 20 years, Xilinx has grown from a small startup company to having more than a billion dollars in revenue. Each step of the way, weve had to transform ourselves to meet the demands of a growing organization. Many companies fail because they cannot manage this constant transformation.

Today, we live in interesting times because there are significant changes coming over the next few years.

Grand Changes Today, programmable logic is 20 percent of the total logic market. I believe that we can get to 50-60 percent somewhere in the future, and that again requires us to change our approach. Because to be a mainstream company, we have to be a low-cost producer; we have to serve a broad range of markets. Historically weve served a relatively low-volume, high-cost, narrow market.

You can see that now we have a global transformation in front of us, a transformation that requires us to discover and learn and sell into new, high-volume markets. We must also learn how to sell into new, more strategic applications. We must sell not only to engineers, but to the systems architects and vice presidents, who care most about the long-range implications of todays technology.

At the same time, our international business is growing very rapidly. Asia, which in 2000 was less than 15 percent of our revenue, is now more than 35 percent of our revenue, which again forces us to change the way we do things, from engineering to support.

I believe that the next big cycle of innovation ahead of us is going to be the convergence of digital consumer electronics. For the last 20 years, innovation has been driven by the PC market. I believe that the next 20 years is going to be driven by consumer electronics, both for the home and for the car, and I think that the center of that is going to be in Asia.

Product Changes We are also moving into new markets, with new processors and very high-speed transceivers capable of managing tremendous amounts of data. In many designs, there is nothing faster than our programmable logic devices.

Historically, when programmable logic was mainly used as glue logic, the decision to use programmable logic products was made late in the design cycle, typically less than a year before the product went into production. Therefore, we got involved late in the design cycle. Today, because FPGAs are the primary component in many systems, we have to sell early in the design cycle two to three years before the product goes into production. This requires a very different approach to sales and marketing.

For example, we have just released our Virtex-II Pro X FPGA, which is another important milestone. It will be the first time that a 10 gigabit transceiver is integrated with an FPGA.

The Culture and Spirit of Xilinx Our products and services are often imitated by our competition, but our corporate culture of innovation is very difficult to match our culture is the most important long-term competitive advantage we have.

Culture is not something that is fixed; it must change and grow with circumstances; it must keep evolving and changing. Our culture itself must not only change as needed, it must support change and innovation on all levels of our company, from engineering and support to marketing and sales. Innovation is alive and well at all levels of the Xilinx culture.

Partnerships are a key part of our culture as well. Xilinx is extremely strong in creating win-win solutions with our partners, because the way we treat our partners is very much how we treat our own employees. We make sure they get something more out of the relationship than just business from Xilinx. Because for me, our business partners are part of the Xilinx ecosystem (just like our customers), and are necessary for the health and growth of the whole.

We do interesting work at Xilinx, and thats what motivates us. Our employees consistently report in surveys that their work is meaningful and that they are proud of their work. Thats why we focus on industry leadership because if you do something that is really top-notch, really state-of-the-art, then clearly your work has value and meaning. Its not just leadership as a way of getting market share or being number one in the market. Our leadership is also a very strong motivator for our people. Ultimately, thats a key advantage that cannot be matched by any competitor.

In companies like Xilinx, people jump in and help out when needed its a very important part of being an innovative company. Theres no finger pointing and no blaming here, just saying hey, lets go forward, lets help out. All of this is part of the Spirit of Xilinx.

I believe you can treat people with respect and still be a leader in your industry. And the difference is innovation. Because if you innovate, theres no competition. If you have the most innovative product and unique features, there is no competition. And when there is no competition, you dont have to drive people to work 12 hours a day.

In fact, I believe that if you really want to have innovation you cannot drive people too hard, because innovation occurs when people are not too busy. If you look at our fundamental core culture, its innovation; innovation in everything we do. And that is also in line with the high-tech industry, where things keep changing continuously.

Now lets not forget that there is something else that is needed, and that is business success. Whatever you do, if it doesnt create business success, its not going to work. Fortunately, our success is tremendous. A couple of years ago we were not even the number one company in programmable logic, but we have come back with a vengeance we now have 50 percent market share, gaining almost 20 points of market share in the last six years or so which is really remarkable.

Conclusion Xilinx is strong because our programmable logic technology is unmatched, and it is the right technology for the future of logic design. There is no better way to design and develop next-generation equipment. We are also strong because our culture supports continued innovation at all levels of our company. Its a competitive advantage that cannot easily be surpassed.

I think that we are just at the beginning of what is possible. With our enabling technology and our customers creativity, Im sure that there are going to be new ways of doing things that will emerge; possibilities we have not yet imagined.