Chip maker Zarlink puts big bet on medical sector

Fri Feb 12, 2010 2:02pm EST
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By Susan Taylor

OTTAWA (Reuters) - Five years after Kirk Mandy's return to resurrect Zarlink Semiconductor ZL.TO, the chief executive says the "heavy lifting" is done and it is time to see if strategic wagers will pay off for the one-time Canadian high-tech leader.

In his second tour as top boss, Mandy said he has whittled down "a dog's breakfast" product line, that spanned a swath of markets and racked up big losses, to "an incredibly tight focus".

"Nobody can do it all and our game plan is to be the best in the world at what we choose to do," he said in an interview with Reuters. "That means we spend a lot of money on a fairly narrow set of the market."

Alongside its bread-and-butter market of communications chips, which generate 60 percent of sales, Zarlink has made a big bet on the medical device market, investing heavily in ultra low-power, high frequency radio chips.

The transmitter chips are already in Given Imaging's GIVN.O Pillcam, a device that takes some 60,000 images of the digestive tract after it is swallowed. They are also in St Jude Medical STJ.N pacemakers, creating a "body area network" that lets doctors wirelessly monitor and adjust the devices.

Today, Zarlink and its customers are developing drug pump systems, which will monitor diabetics' blood sugar levels, for example, then deliver insulin as needed.

There is also work on deep brain stimulation devices, which use implanted electrodes, wired to a pacemaker, to run electrical current to a specific part of the brain. The treatment can help people with disorders ranging from Parkinson's disease and tremors to depression and epilepsy.

Zarlink also led research that, in 2008, developed a prototype device that can "harvest" energy from a heart beat to produce one-third of the required energy to power a pacemaker.   Continued...