56. CML Microsystems
Powering Communication Advances
Based in Maldon, Essex, CML Microsystems Plc drives innovation in the semiconductor space, delivering solutions for global connectivity. Operating in the electronics industry, it designs mixed-signal, radio frequency (RF), and microwave semiconductors. The company targets niche markets in wireless communications, satellite technology, and aerospace, competing with larger chip makers through specialised expertise.
CML Microsystems generates revenue by designing and developing high-performance semiconductor chips tailored for communication applications, such as private mobile radio and global navigation satellite systems (GNSS). It operates a fabless model, outsourcing manufacturing to third-party facilities while handling in-house testing and design, earning income through sales to industrial clients and partnerships with blue-chip technology firms. The company also licenses its technologies and provides ongoing support services, building long-term relationships to ensure steady demand across its diverse market segments.
Strategically, CML is focusing on expanding its presence in emerging communication technologies, particularly 5G and satellite broadband, to capitalise on the growing need for secure data transmission and IoT connectivity. It’s investing in research and development to enhance its SuRF range of microwave integrated circuits, targeting high-growth areas like defence and healthcare, while securing long-term contracts, such as a recent 12-year GNSS deal, to stabilise revenue streams. The company is also exploring geographic diversification, strengthening its operations in Asia and the US to reduce reliance on any single market. Sustainability efforts, including efficient manufacturing processes, aim to align with industry trends, but its outsourced production model raises concerns about supply chain vulnerabilities, especially amid global trade tensions. Dependence on niche markets like aerospace, sensitive to economic cycles, poses risks, and the recent acquisition of Microwave Technology Inc. suggests an ambitious growth path that could strain integration efforts. Leadership transitions, including a long-serving finance director’s tenure, add another layer of complexity to its strategic execution.
CML Microsystems’ focus on specialised semiconductors and strategic partnerships theoretically offers a promising growth trajectory. Yet, its reliance on external manufacturing and niche market exposure highlights the need for resilient supply chains and cautious expansion to safeguard its future. For thirty years, CML Microsystems has failed to generate any meaningful shareholder returns. It sells products that, whilst sounding technical, are in fact rather commoditised. In theory it has tailwinds from IoT but with such a woeful history, there seems little point in completing further work.
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