TTM Technologies Stock

TTM Technologies, Inc. operates as a leading global manufacturer of technology solutions.

The company offers mission systems, radio frequency (RF) components/RF microwave/microelectronic assemblies, quick-turn and technologically advanced printed circuit boards (PCB). The company is one of the largest PCB manufacturers in the world. The company operates specialized facilities in North America and Asia. The company focuses on providing time-to-market and volume production of advanced technology products and offer a one-stop design, engineering and manufacturing solution to its customers. This solution allows the company to align technology development with the diverse needs of its customers and to enable them to reduce the time required to develop new products and bring them to market. The company serves a diversified customer base consisting of approximately 1,500 customers in various markets throughout the world, including aerospace and defense, data center computing, automotive, medical, industrial and instrumentation, and networking. The company's customers include original equipment manufacturers (OEMs), electronic manufacturing services (EMS) providers, original design manufacturers (ODMs), distributors and government agencies (both domestic and allied foreign governments).

Segments

The company operates through two segments: PCB, which consists of 16 domestic system, sub-system, and PCB plants; four PCB fabrication plants in China; one in Malaysia; and one in Canada; and RF and Specialty Components (RF&S Components), which consists of one domestic RF component plant and one RF component plant in China. Each segment operates predominantly in the same industries with facilities that produce customized products for the company's customers and use similar means of product distribution.

Products and Services

The company offers a wide range of engineered systems, RF and microwave assemblies, HDI PCBs, flexible PCBs, rigid-flex PCBs, custom assemblies and system integration, IC substrates, passive RF components, advanced ceramic RF components, hi-reliability multi-chip modules, beamforming and switching networks, PCB products, RF components, and backplane/custom assembly solutions, including conventional PCBs. The company also offers certain value-added services to support its customers' needs. These include design-for-manufacturability (DFM), PCB layout design, simulation and testing services, and quick turnaround (QTA) production. For its RF sub-assemblies and components, the company provides specialized assembly and RF testing to offer value-added solutions to its customers. By offering this wide range of engineered systems, RF components and sub-systems, PCB products, and complementary value-added services, the company aims to provide its customers with a one-stop manufacturing solution for their hardware technology and integration requirements.

Radar Systems

The company provides a wide range of high-performing and lightweight maritime surveillance and weather avoidance radar systems for fixed- and rotary-wing aircraft, Unmanned Aerial Vehicles (UAVs) and shipboard platforms to the U.S. government, tier one OEMs, and numerous international defense agencies. At this time, the company is also the sole provider of the U.S. Navy's AN/APS-153 multi-mode radar on the MH-60R helicopter, and the communications suite within the MH-60R/S multi-mission helicopters. The company's maritime surveillance radars offer advanced features, such as Ground Moving Target Indicator (GMTI), Synthetic Aperture Radar (SAR), Inverse Synthetic Aperture Radar (ISAR), Automatic Identification System (AIS) and weather avoidance. The company is in the process of developing the next generation multi-mode maritime and over-land surveillance AESA radar known as MOSAIC.

Surveillance

The company is a global leader in Identification Friend or Foe (IFF), Monopulse Secondary Surveillance Radars (MSSR) and Air Traffic Control (ATC) systems enabling military and civilian air traffic controllers to effectively identify aircraft and vehicles as friendly. The company provides both equipment and supporting services required to safely and reliably control flight operations. These systems are used by the U.S. Army, U.S. Navy, U.S. Air Force, U.S. Marines, Federal Aviation Administration (FAA), NATO and numerous international defense agencies, including those of Japan and South Korea. These systems have been fielded globally in a wide range of ground, air and sea-based applications.

Communications Systems

The company's advanced wired and wireless communication systems provide the digital backbone for numerous defense and civil platforms worldwide, including fixed- and rotary-wing aircraft and ground control shelters. These systems are designed to meet stringent customer requirements to support adaptability to special missions and communications protocol requirements. The company's vehicle-based intercommunications systems deliver traditional intercom system capabilities while incorporating software-defined features, including an open architecture for integration into vehicle C4 (command, control, communications and computing) systems, networked communications gateways and combat vehicles. Commercial audio products and headsets are utilized worldwide in a wide range of military and civilian applications, including audiometric testing. The company's communications systems are fielded within the U.S. Army, the U.S. Navy, the U.S. Air Force, the U.S. Marines and numerous international defense agencies. These systems are also sold to aerospace manufacturers, commercial airlines and audiometric original equipment manufacturers.

RF and Microwave Assemblies

The company designs, produces, and tests specialized circuits and components used in radio-frequency or microwave emission and collection applications. These products are typically used for radar, transmit/receive antennas and similar wireless applications. Markets for these products include defense, avionics, satellite, and commercial applications including telecommunications, networking and automotive. The manufacture of these products requires advanced materials, equipment, and methods that are highly specialized and distinct from conventional printed circuit manufacturing techniques. The company also offers specialized radio-frequency assembly and test services. The company has developed integrated solutions across its facilities and capabilities to provide sophisticated integrated electronics for numerous platforms, ranging from digital RF memory (DRFM) to frequency up/down converters (UDC) and channelized amplifiers for military and space applications.

Passive RF Components

The company's line of products consists of off-the-shelf surface mount microwave components which provide passive microwave signal distribution functions. These products were developed to provide a lower-cost high performance signal distribution component, which could be placed on standard printed circuit boards with automated production equipment. The primary applications of these products are in equipment for cellular base stations and in WLAN, Bluetooth, and satellite television. In cellular base stations, the company's surface mount products are utilized in RF power amplifiers, and are also found in low-noise amplifiers, radios, and antennas. 5G advancements and the continued proliferation of wireless technology may create new applications for these products across other end markets.

Advanced Ceramic RF Components

The company's ceramic offerings include standard and etched thick-film ceramic substrates. Etched thick-film ceramic circuits compete favorably with thin-film ceramic circuits in cost while providing comparable performance. These products are generally customer designed in close collaboration with the company's engineering staff to ensure the highest possible performance and manufacturability. These capabilities are aimed at high performance applications in the medical, industrial, and defense markets.

Hi-Reliability Multi-Chip Modules

The company offers custom hybrid and multi-chip modules, high-performance radiation-hardened and space-qualified micro-electronics and power management and control electronics.

Beamforming and Switching Networks

The company's beamforming technologies are used in military and aerospace applications, offering a variety of active and passive high-performance RF assemblies, including L-band/LEO and L- and S-band/GEO space beamformers, UHF thru Ka-band radar AESA RF networks, Butler matrices, multi-octave, and more.

Custom Designed Application Specific Integrated Circuits (ASICs)

The company's Telephonics Large Scale Integration (TLSI) group has designed nearly 400 mixed-signal custom Application Specific Integrated Circuits (ASICs) for customers in the automotive, industrial, defense/avionics and smart energy markets. The TLSI organization works with the company's customers' technical teams, taking complete responsibility for the ASIC development process, from the initial ASIC specification definition through qualification and volume production, to meet the most stringent customer program requirements. Recently, over 10 million of the company's ASICs have shipped annually.

Conventional PCBs

A conventional PCB is made from a composite laminate that is metalized with a conductive material such as copper. The PCB is the basic platform used to interconnect components in most electronic products, including computers, communications equipment, high-end consumer electronics, automotive controls, commercial aerospace and defense systems and medical and industrial equipment. Conventional PCBs can be classified as single-sided, double-sided and multi-layer boards.

The company focuses on higher layer count conventional PCBs. A multi-layer PCB can accommodate more complex circuitry than a single-sided or double-sided PCB and as such requires more sophisticated production techniques. The number of layers comprising a PCB often increases with the complexity of the end product. For example, a simple consumer device such as a garage door controller may use a single-sided or double-sided PCB, while a high-end network router or computer server may use a PCB with 30 or more layers.

High Density Interconnect or HDI PCBs

The company's facilities in North America and Asia also produce high density interconnect (HDI) PCBs, which are PCBs with higher interconnect density per unit area requiring more sophisticated technology and manufacturing processes for their production than conventional PCB products. HDI PCBs are boards with high-density characteristics including micro-sized holes, or microvias (diameter at or less than 0.15 mm), and fine line circuitry (circuit line width and spacing at or less than 0.075 mm) and are fabricated with thin high-performance materials, thereby enabling more interconnection functions per unit area. HDI PCBs generally are manufactured using a sequential build-up process in which circuitry is formed in the PCB one layer at a time through successive drilling, plating and lamination cycles. In general, a board's complexity is a function of interconnect and circuit density, layer count, laminate material type and surface finishes. As electronic devices have become smaller and more portable with higher functionality, demand for advanced HDI PCB products has increased dramatically. The company defines advanced HDI PCBs as those having more than one layer of microvia interconnection structure.

Substrate-like PCBs or SLPs

Substrate-like PCBs (SLPs) represent the next evolution of high end HDI PCBs. SLPs are PCBs with even higher interconnect density per unit area than the traditional advanced HDI PCBs described above requiring an even more sophisticated manufacturing technology adapted from IC substrate fabrication with enhancements to the subtractive and additive techniques of traditional PCBs. This enables fine line circuitry (circuit line width and spacing at or less than 0.03 mm). Demand for this type of high-density circuit is continuing to penetrate the markets of more traditional PCBs. In addition, the company offers an alternative approach to building SLP technology in the United States for lower volume, higher mix commercial and aerospace and defense applications.

Flexible PCBs

Flexible PCBs are printed circuits produced on flexible films, allowing them to be folded or bent to fit the available space or allowing for application movement. The company manufactures circuits on flexible substrates that can be installed in three-dimensional applications for electronic packaging systems. Use of flexible circuitry can enable improved reliability and electrical performance, reduced weight and reduced assembly costs when compared with traditional wire harness or ribbon cable packaging. Flexible PCBs can provide for flexible electronic connectivity of an electrical device's apparatus, such as printer heads, cameras, TVs, mobile handsets, and tablets. For some of its flexible PCB customers, the company also assembles components onto the flexible PCBs it manufactures.

Rigid-flex PCBs

Rigid-flex circuitry provides a simple means to integrate multiple PCB assemblies and other elements such as display, input or storage devices without wires, cables or connectors, replacing them with thin, light composites that integrate wiring in ultra-thin, flexible ribbons between rigid sections. In rigid-flex packaging, a flexible circuit substrate provides a backbone of wiring with rigid multilayer circuit sections built up as modules where needed.

Since the ribbons can be bent or folded, rigid-flex provides a means to compactly package electronics in three dimensions with dynamic or static bending functions as required, enabling miniaturization and thinness of product design. The simplicity of rigid-flex integration also generally reduces the number of parts and interconnections required, which can improve reliability.

Rigid-flex technology is essential to a broad range of applications including aerospace and defense, industrial and transportation systems requiring high reliability; hand-held and wearable electronics, such as video cameras and music players, where thinness and mechanical articulation are essential; and ultra-miniaturized products, such as headsets, medical implants and semiconductor packaging where size and reliability are paramount.

Custom Assemblies

The company's assembly facilities produce custom electronic assemblies. Custom electronic assemblies refer to a variety of PCB assemblies such as backplane and mid-plane assemblies, flexible and rigid-flex assemblies and RF assemblies. Each of these assemblies involves mounting electronic components to a printed circuit board and then testing the assembly for electrical continuity.

IC Substrates

IC substrates provide the mechanical support and electrical interconnect used to package ICs (integrated circuits or semiconductors) either in single chip packages or multi-chip modules. IC substrates, also known as chip carriers, are highly miniaturized circuits manufactured by a process largely similar to that for PCBs but requiring the use of ultra-thin materials and including micron-scale features, because they must bridge the gap between sub-micron IC features and millimeter scale PCBs. Consequently, IC substrates are generally manufactured in a clean room environment to ensure products are free of defects and contamination and employ advanced HDI processes and manufacturing approaches used in SLP technology.

Quick Turnaround Services

The company refers to its rapid delivery services as quick turnaround or QTA, because it provides custom-fabricated PCBs to its customers within as little as 24 hours to ten days. As a result of its ability to rapidly and reliably respond to the critical time requirements of its customers, the company generally receives premium pricing for its QTA services as compared to standard lead time prices.

Prototype Production: In the design, testing, and launch phase of a new electronic product, the company's customers typically require limited quantities of PCBs in a very short period of time. The company satisfy this need by manufacturing prototype PCBs in small quantities, with delivery times ranging from as little as 24 hours to ten days.

Ramp-to-Volume Production: After a product has successfully completed the prototype phase, the company's customers introduce the product to the market and require larger quantities of PCBs in a short period of time. This transition stage between low-volume prototype production and volume production is known as ramp-to-volume. The company's ramp-to-volume services typically include manufacturing up to several hundred PCBs per order with delivery times ranging from five to 15 days.

Thermal Management

The company produces printed circuits with heavy copper cores and both embedded and press-fit coins. In addition, the company produces PCBs with electrically passive heat sinks laminated externally on a circuit board or between two circuit boards, as well as PCBs with electrically active thermal cores.

Manufacturing Technologies

The company is certified by Underwriters Laboratories to manufacture PCBs using many types and combinations of these specialty materials. This broad offering allows the company to manufacture PCBs for a wide array of end-use applications, including highly complex PCBs for niche and high-end commercial and aerospace and defense markets.

Customers and Markets

The company's customers include end-users, OEMs, EMS providers, ODMs and distributors that primarily serve the aerospace and defense, automotive, data center computing, medical/industrial/instrumentation, and networking end markets of the electronics industry. Included in the end markets that its OEM and EMS customers serve is the U.S. federal government. As a result, the company is a supplier, primarily as a subcontractor, to the U.S. federal government. In addition, the company sells directly to government agencies (both domestic and allied foreign governments).

Sales attributed to OEMs include sales made through EMS providers and ODMs. Although the company's contractual relationships are often with the EMS or ODM companies, it typically negotiates price and volume requirements directly with the OEMs. In addition, the company is on the approved vendor lists of several of its EMS providers. This positions the company to participate in business that is awarded at the discretion of the EMS provider.

The company's sales and marketing strategy focuses on building long-term relationships with its customers' engineering and new product introduction personnel early in the product development phase, frequently through strategic account management teams. Traditional build-to-print opportunities involve TTM engineering providing design for manufacture reviews and making recommendations for both manufacturability and cost reductions without impacting specifications. Prototype builds to verify design ensue, along with the early stages of production. As the product then matures from the prototype stage to volume production, the company shifts its focus to the customers' procurement departments in order to capture sales at each point in the product's life cycle. The company's design-to-specification capabilities allow it to engage at the onset in the engineering cycle at critical aerospace and defense customers as they begin the process of specifying system requirements. At that stage, the company supports its customers by designing a solution, as well as providing early prototyping and test support for that solution. The company will then work to meet the ramp to volume production requirements of its customers. Building upon this strategy and moving further vertically along the customer value chain, the company also designs and manufactures highly-engineered integrated mission systems for aerospace and defense applications.

The company's staff of engineers, sales support personnel, and managers assist its sales representatives in advising customers with respect to manufacturing feasibility, design review, and technological capabilities through direct communication and visits. The company combines its sales efforts with customer service personnel at each facility to better serve its customers. Each large customer is typically assigned an account manager to coordinate all of the company's services across all of its facilities. Additionally, the largest and most strategic customers are also supported by select program management and engineering teams. The company's global sales force consists of direct sales personnel, complemented by commission-based independent representatives, and supports customers throughout North America, Europe, Asia and the Middle East.

The company's North America footprint includes facilities from its PCB and RF&S Components reportable segments with PCB fabrication and engineered system plants located in California, Colorado, Connecticut, New Hampshire, New York, North Carolina, Ohio, Oregon, Utah, Virginia, Wisconsin, and Ontario, Canada; and RF component plant located in New York.

The company's Asia footprint includes facilities from its PCB and RF&S Components reportable segments. The company has PCB fabrication plants located in Huiyang, Dongguan, Guangzhou, and Zhongshan, China and Penang, Malaysia; and RF component plant located in Suzhou, China.

Strategy

The key elements of the company's strategy are to provide differentiated capabilities by incorporating advanced design-to-specification engineering support, testing, components and specialized assembly into the value-added solution provided to customers; maintain its customer-driven culture and provide superior service to its customers in its core markets of aerospace and defense, automotive, data center computing, medical/industrial/instrumentation, and networking; accelerate customer, end-market, and technology diversification through strategic mergers and acquisitions; accelerate its expansion into growing markets using its advanced technology as a key point of differentiation; and address customer needs in all stages of the product life cycle.

Competition

The company's principal PCB and substrate competitors include AT&S (Austria Technologie & Systemtechnik Aktiengesellschaft), Chin-Poon Industrial Co., Ltd., Gold Circuit Electronics Ltd., ISU Petasys Co., Ltd., Sanmina Corporation, Shennan Circuits Co., Ltd., Suzhou Dongshan Precision Manufacturing Co., Ltd., Tripod Technology Corporation, Unimicron Technology Corporation, WUS Printed Circuit Co., Ltd., and Zhen Ding Technology Holding Ltd. The company's competition for RF products and engineered systems include BAE Systems plc, Cobham plc, Crane Aerospace & Electronics, Elta Systems Ltd., Hendsolt AG, Mercury Systems, Inc., RN2 Technologies Co., Selex ES (subsidiary of Leonardo S.p.A.), Smiths Group plc, and Thales Group.

Seasonality

The company tends to experience modest seasonal softness in the first and third quarters due to holidays and vacation periods in China and North America, respectively, which limit production leading to stronger revenue levels in the second and fourth quarters (year ended January 1, 2024).

Research and Development

The company's research and development expenses included $27.3 million for the year ended January 1, 2024.

Intellectual Property

The company's intellectual property strategy remains deliberate and aimed at protecting the innovations critical to TTM's business and the success of its customers. The company has a total of approximately one hundred fifty (150) patents, with approximately twenty (20) pending patent applications. Many of these patents stem from its 2018 acquisition of Anaren, 2019 asset and technology acquisition from i3, and 2022 acquisition of Telephonics. The company's PCB business depends on the effectiveness of its fabrication techniques, proprietary PCB structures, and its ability to continually improve its manufacturing processes. In regards to its RF products, the vast majority are proprietary and protected or covered by approximately fifty-three (53) patents and eight (8) pending patent applications directed towards products for both the wireless infrastructure and aerospace and defense markets.

National Security Matters

A portion of its business consists of manufacturing defense and defense-related items for various departments and agencies of the U.S. government, including the U.S. Department of Defense (DoD), which requires that the company maintains facility security clearances under the NISPOM. The NISPOM requires that a corporation with significant foreign ownership maintaining a facility security clearance take steps to prevent foreign ownership, control or influence, referred to as FOCI. In February 2023, the company's Board of Directors passed a Special Board Resolution (SBR), replacing the Special Security Agreement (SSA) that it entered into with the Defense Counterintelligence and Security Agency (DCSA) in 2010. The replacement of the SSA with the SBR is a result of the significantly reduced foreign ownership of TTM. DCSA has accepted the SBR and the effective date of the SBR is February 2, 2023. The SBR codifies the maintenance of the Government Security Committee of the Board to oversee the company's compliance and cybersecurity efforts and to put into place best practices in its facilities in the U.S. and overseas to ensure that it maintains robust security practices and policies as it serves the interests of its customers in the Aerospace and Defense market.

Governmental Regulations

The company's operations, particularly those in North America, are subject to a broad range of regulatory requirements relating to export control, environmental compliance, waste management, and health and safety matters. In particular, the company is subject to the following:

the U.S. Department of State regulations, including the Arms Export Control Act (AECA) and ITAR located at 22 CFR Parts 120-130;

the U.S. Department of Commerce regulations, including the Export Administration Regulations (EAR) located at 15 CFR Parts 730-744;

Office of Foreign Asset Control (OFAC) regulations located at 31 CFR Parts 500-599;

The U.S. Occupational Safety and Health Administration (OSHA), and state OSHA and Department of Labor laws pertaining to health and safety in the workplace;

the U.S. Environmental Protection Agency regulations pertaining to air emissions; waste water discharges; and the use, storage, discharge, and disposal of hazardous chemicals used in the manufacturing processes; the reporting of chemical releases to the environment; and the reporting of chemicals manufactured in by-products that are beneficially recycled;

Department of Homeland Security regulations regarding the storage of certain chemicals of interest;

California Climate Corporate Data Accountability Act (SB 253) and the California Climate-Related Financial Risk Act (SB 261);

corresponding state laws and regulations, including site investigation and remediation;

corresponding U.S., county and city agencies;

corresponding regulations and agencies in China for the company's Chinese facilities;

material content directives and laws that ban or restrict certain hazardous substances in products sold in member states of the European Union, China, and other countries and jurisdictions;

SEC rules that require reporting of the use of certain metals (conflict minerals) originating in the Democratic Republic of the Congo and the countries adjacent to it pursuant to Section 1502 of the Dodd-Frank Act; and

reporting requirements of the California Transparency in Supply Chains Act of 2010 that requires reporting on efforts to eradicate slavery and human trafficking in retailers' and manufacturers' supply chains.

History

TTM Technologies, Inc., a Delaware corporation, was founded in 1978. The company was incorporated in 1978.