Business model of Xilinx

Customer Segments

Xilinx serves more than 20,000 customers across the world, primarily in the US, Asia and Europe. The Company serves corporate and industrial clients across multiple business sectors, including the aerospace and defence, automotive, data centre and storage, medical, wired and wireless communications, video and imaging, and broadcast industries.

Much of the Company’s products reach end users through distributors, which comprise a significant proportion of Xilinx’s customers.

Among Xilinx’s customers are high-profile names such as Qualcomm, Motorola, Cisco Systems, Yahoo, Verisign and Gopro, as well as less well-known operators including China Bak Battery in China, ASML in the Netherlands, and Spark Networks in the US.

Value Propositions

Xilinx’s principal value is in the quality and reliability of its products. The Company is a well-established name within the industry and is a brand associated with a positive reputation. The Company is constantly seeking to develop its products and provide more innovative solutions to its customers.

Xilinx also provides a range of technical support and training services, allowing customers to get the most out of its products.

Channels

Xilinx operates a website hosted at www.xilinx.com, through which the Company’s products and services can be viewed. Products cannot be purchased directly via the Xilinx website. Product descriptions do however link to details on how to contact members of the Company’s sales team, principally telephone and fax numbers for regional and national sales offices.

While products can be purchased from Xilinx directly, the majority of the Company’s sales come via distributors and retailers.

Customer Relationships

Xilinx’s products are available to customers through direct interaction with the Company’s regional and national sales teams.

While products and services can be viewed freely through the Xilinx website, they are not available for purchase on a self-service basis. The Company provides a range of support services to its customers. This includes user guides, documentation, training materials and downloads, as well as a self-hosted community forum through which customers can collaborate on problems and ask questions directly to Xilinx representatives.

Xilinx also operates several social media accounts through which it interacts with and updates its customers, including with Facebook, Twitter, YouTube, Google+ and LinkedIn.

Key Activities

Xilinx designs and develops programmable devices and associated technologies. The Company's products include integrated circuits in the form of programmable logic devices, software design tools; targeted reference designs, printed circuit boards, and intellectual property.

In addition to the manufacture and sale of physical products, Xilinx provides design services, customer training, field engineering and technical support.

The Company’s principal aim is to provide integration for electronic equipment manufacturers in end markets, spanning the wired and wireless communications, industrial, scientific and medical, aerospace and defence, audio, video and broadcast, consumer, automotive, and test and measurement industries.

Key Partners

Xilinx collaborates with a number of partners through its Xilinx Alliance Program. These partners assist the Company in developing programmable technologies and devices. The Company’s partners comprise IP providers, electronic design automation vendors, software developers, systems integrators and hardware suppliers.

Partners are organised across four levels dependent on their size and level of contribution, ranging from basic Associate partners to top-tier Premier partners. All Xilinx partners receive access to the Company’s development tools, technical support and training sessions.

The Company lists a number of featured partners on its website, from a range of industries. Xilinx’s Premier partners include Xylon, CoreEL Technologies, Northwest Logic, Fidus Systems, and Topic Embedded Systems.

Key Resources

Xilinx’s key resources are its products, its manufacturing facilities, its distribution channels, and its personnel.

The Company claims to have more than 3,500 patents worldwide. Searches of records held by the US Patent and Trademark Office identified numerous applications filed by the Company, including applications entitled ‘Increased usable programmable device dice’, ‘Integrated circuit package testing’, ‘Clock region partitioning and clock routing’, and ‘Interactive datasheet system’.

Cost Structure

Xilinx principally accrues costs in relation to the development and distribution of its products. This includes research and development costs, manufacturing and supply chain costs, and storage and distribution costs.

The Company also incurs costs in relation to the retention of its personnel – with staff members numbering more than 3,500 globally – in the form of salaries and benefits, and in relation to the operation of multiple regional and national offices.

Revenue Streams

In fiscal year 2016 Xilinx recorded an annual revenue of just over $2.2 billion. The Company generates revenue through the development of sale and programmable devices and the provision of associated technology solutions. The majority of the Company’s revenue is generated through the sale of silicon-based programmable logic devices product offerings, such as the Virtex UltraScale, the Kintex UltraScale and the Spartan-6. In fiscal year 2016, approximately 60% of the Company’s net revenue was derived through the sale of products to distributors.

More than 80% of the Xilinx’s 2016 annual revenue is attributed to the Company’s data centre and communications and industrial, aerospace and defence segments. In addition to the sale of products, the Xilinx also generates revenue through product licensing and ancillary services.