NF: Mercury is taking an approach that is very unique by adding RF and microwave capabilities, through acquisition, to a core capability and product line that is purely digital. Please explain why you've chosen this path.
ID: In short, this allows us to address nearly all parts of the transmit and receive signal chains through what we call application-ready subsystems, or ARS. With ARS, we're not just providing a board, but rather a complete preconfigured subsystem for our prime-contractor customersonto which they can layer their applications. This requires the ability to address the entire signal path from the antenna terminal through digitization to storage or dissemination of acquired data. And that clearly requires expertise in analog, digital, and microwave technology.
NF: What led Mercury, which has been in the embedded-systems business for 28 years, to take these steps?
ID: As a company, we realized that in order to grow, we had to move up the food chain from board provider to subsystems provider. We wanted to expand our core business, which serves the intelligence, surveillance, and reconnaissance (ISR) market by adding technological prowess and services. The overall goal is to provide more value to our customers and to broaden the programs on which we can compete in the future. When we investigated our options, we found there is a wealth of existing expertise, which we can leverage more quickly through acquisition. This remains part of our ongoing strategy.
NF: And the acquisition of LNX obviously satisfies the microwave part of this package?
ID: The acquisition of LNX is not our first foray into the RF domain. In 2004, we acquired Advanced Radio Corporation, which had significant expertise in RF products for SIGINT along with very-high-performance direct-digital-synthesizer (DDS) capability. Then in 2005, we acquired Echotek Corporation, which gave us dataacquisition expertise and, in particular, board-level products for analog-to-digital and digital-to-analog conversion and digital receivers. Now, LNX brings us enormous strength in integrated microwave assemblies and complete subsystems, such as digital instantaneous frequency measurement (DIFM) systems and digital RF memories (DRFMs). It expands our technology base throughout the receive and transmit chains to 60 GHz. It also enhances our ability to provide customers with the application-ready subsystems I mentioned earlier. The customer can port-over their IP in the form of techniques and algorithms to make the system complete. All threeARC, Echotek, and LNXnow form our Microwave and Digital Solutions Group.
NF: There are obviously a lot of microwave manufacturers out there. Why did you choose LNX?
ID: Well, we looked at various microwave companies and chose LNX for several reasons. LNX is addressing RF and microwave challenges in what I would call a progressive manner that is not all that common in the microwave industry. They have acknowledged and acted on the need to integrate digital and RF technologies, such as field-programmable gate arrays (FPGAs), to achieve higher performance with lower power consumption in a smaller form factor. That is, they were meeting size, weight, and power (SWaP) challenges head-on. We view this as a critical strategy in order to be competitive in the future. In addition, their customer portfolio is similar to oursas is their corporate culture, which is very entrepreneurial. They're also 20 minutes away from our headquarters, which is a huge advantage when you're trying to integrate functions, among other benefits.
NF: I gather this strategy is in response to the market, which in Mercury's case is the defense industry?
ID: Absolutely. Five years ago, defense procurement was very different from what it is today. Back then, the Department of Defense (DoD) expected technology insertion programs to go from napkin to production in five years or more. Now, 18 months is not out of the question and some quick-reaction-capability (QRC) efforts are being turned even faster. This places a huge burden on prime contractors, who of course pass it through their supply chain. They want complete solutions that they can plug into their platforms without having to perform the tweaking and integration work themselves. This is something the DoD has been talking about for a long time, but it's very real today.
NF: How does your broadbased technology base allow you to meet these challenges?
ID: With all of this capability under our umbrella, we can do a better job of integrating complete subsystems. In fact, we're already demonstrating that we can deliver higher-performance solutions faster and within the confines of SWaP requirements. This was much more difficult when we had to rely on a variety of partners to fill in the blanks, so to speak.
NF: You said that integrating digital and microwave technology will be "critical" in the future. Why?
ID: The only way to achieve the highest levels of integration in any type of subsystem for EW, SIGINT, COMINT, and other applications is to perform as many functions digitally as possible. For proof, look at a typical 20-year-old SINCGARS radio. About 75% of it is based on RF technology. A JTRS radio has far less RF content. We're using FPGAs, for example, to implement an enormous amount of functionality that was previously performed by discrete analog devices. And the latest DACs and ADCs sample at rates that preclude the need to downconvert to baseband.
NF: What should we next expect to hear from Mercury?
ID: As you might imagine, the members of our Microwave and Digital Solutions Group are working together to determine how we can fully exploit all of our capabilities in the receive and transmit areas, which have just been enhanced by the LNX acquisition. This will result in both a greater range of subsystems as well as new functions within them. It's a lot of work, but with enormous potential.