[ Hi! I'm here with Eric Qin, none other than the founder & CEO of Siglent. ] [ Thank you very much for joining me. ] [ It's not every day we get a CEO of a company here in the lab. ] But I think from today, maybe more CEOs will visit you in the future. [ So you're here from China, on a visit? ] [ This is your first time here in Australia? ] Yeah, very beautiful country. [ And, so you want to move here? ] Mmm, maybe... [ So, tell us about Siglent -- when was it founded, and why? ] You know, in 2002, I was a software engineer, and one of my classmates JK Shao is a hardware engineer. We had a goal to make every engineer worldwide have professional test equipment, so we began to develop an oscilloscope. [ Is this a bench one, or a PC-based one? ] A bench one. At that time, we didn't know it's very difficult to design a bench oscilloscope so in our original plan, we prepared to use half a year to complete the whole prototype. But at last we used two and a half years. Very difficult. [ So you thought it'd take six months, but it took two and a half years to design your first bench oscilloscope. ] And launched that model number at the end of 2005. [ What were the specs of that oscilloscope? ] [ What bandwidth, what sample rate? ] The bandwidth was 200 MHz, and the sampling rate was 1 GSa/s. [ So that was very hard to do back in 2002. Is it easier now? ] I think it easier now, but at that time it was very hard. We did a lot of research work. [ And who were your competitors when you decided to start? ] [ Was it Rigol, or were you looking for Agilent at the time? ] At that time, I think the competitors were Tektronix and Rigol. In 2006, our chip quantity only 5% of one of our competitors. But at the end of 2011, only 5 years later, our quantity is beyond that competitor's. Very very crazy growth, very rapid. [ How many employees do you have? ] Right now, around 300 already. Around 1/3 are R&D engineers. [ How many do hardware and how many do software/firmware? ] I think hardware is around 40-50 and software is around 60. [ How complex is the firmware in these? ] [ How many lines of code? Do you have any idea? ] At the beginning, I planned to use half a year, but at last I used more than two and half years. I think because all the software was designed by myself at the beginning for the first model number, but now I'm a business man and I don't code anymore. And I think the total code is more than 200,000 lines. [ 200,000 lines of code in a typical bench oscilloscope. ] [ What sort of operating system are you using in these? Linux? Windows CE? ] We have some different systems. Some use Linux, some use Windows CE, and some maybe use other operating systems. [ Why don't you standardize on just one platform? ] At the beginning, in 2005, I think was impossible to use Windows CE or Linux platform, so at that time we used our own operating system -- it's a small operating system. I don't remember the name. But after some years growth, we found this system isn't enough, so we changed from that system to Linux. [ And so all new instruments will be running that? ] Yeah, most of our new equipment is running on Linux, but we still have some running on Windows CE or others. [ So I take it the software is harder than the hardware? Would that be correct? ] I don't think so. Both hardware and software is difficult, I think. If you want to develop a good scope or a good arbitrary waveform generator, you need good hardware designer and a good software designer. [ In that case, on the hardware side of an oscilloscope, which is more difficult: ] [ The analog frontend/amplifiers? Or is it the memory architecture and those sorts of things? ] [ Which is more important to get right? ] I think the first one (analog front end), the second one, maybe the sampling system, the ADC, FPGA and so on, and including the firmware, all of them are very important. [ What is the major cost factor inside an oscilloscope? ] [ Is it the FPGA you have to use, or is it analog components in the front end? ] [ Is it the analog-to-digital converters? ] [ Which adds the most cost to an oscilloscope? Is there any one thing? ] I think maybe FPGA, analog, and others together, display, metal box, plastic box I think most cost comes from the silicon chips. [ You've just released this new 2000 series oscilloscope. ] Yeah, it'll be a very fantastic one, I believe. [ And how long did it take to develop this? ] [ Although I know it's based on a lot of previous work, obviously. ] [ From you time you decided to do this model, how long did it take? ] This one uses the second generation of our SPO technology. And from the first generation of SPO maybe 4-5 years ago, from 2 years ago we began to design the version 2 architecture of SPO. And so for this series, it took around two years. [ You design low-cost test equipment mostly. ] [ Is that a deliberate choice? Do Siglent want to stay at the low end? Or do you want to get into really high-end expensive equipment? ] We design not only low-cost. In fact we have some not-low-cost equipment now that we're selling inside China. And I think our purpose, the first target, of Siglent (my classmate and I) to provide every engineer with a professional test environment. So if we need to provide every engineer with equipment, you have the low-cost and the best cost/performance. So it's very important for Siglent, so we focus on this. [ You've got a whole range, you're into ] [ oscilloscopes, signal generator, power supplies, spectrum analyzers? ] [ Do you plan to expand into a larger range of things? ] [ I know you do a benchtop multimeter, any plans for handheld equipment? ] I believe Siglent will always focus on test environment equipment. And there are still some other products that we need to develop. We have two directions: One is to develop a more high-end and broad scope family. The other is to make our whole family of test equipment broader. [ Is it harder to make a profit with low-cost test equipment? ] [ Or is it a good industry to be in in terms of profit? ] It is difficult to reply. Margins are very small at the low-end, but the quantities are very large. And for some high-end products, the margins are high enough, but the quantities are small. So, I think we need both of them. But for Siglent products, one of our strategies is to supply the best cost/performance equipment. So our margin very small, so our prices are acceptable for most of our customers. [ Did you start Siglent with the thought that you'd sell your own brand products? ] [ Or did you think that you would be able to sell the technology to a larger company ] [ and have them sell it under their name? ] Since the beginning in the 2002 (when we developed the scope) until maybe 2008, we didn't have our own brand. All our business came from OEM business. [ So all of your business back then came from OEM? ] Yes, before 2008. And from 2008 we began to sell Siglent brand. And during that time, we found Siglent sales was very fast. Crazy fast; doubling/tripling/quadrupling year over year. This year's sales was double last year's sales. [ I thought it would be very hard to do that, to start your brand from nothing. ] [ Why was it so successful? ] I think there are some reasons. I am an R&D engineer. All three founders (one who joined in 2007) are designers. So we focus on R&D very much. And every year, we invest 15% of sales in R&D. [ That's very high. ] Especially from 4 years ago to last year, I have seen the data, maybe around 20%. Most of our income is focussed on R&D, so we can provide new products & technologies very quickly. Especially this year, we are prepared to launch 5 new products. Including this SDS2000X, we've launched 4 already this year. But we'll launch another one -- a very good spectrum analyzer, a total of 5 new products. [ Is a spectrum analyzer more difficult to design from an R&D point of view? ] We spent more than 4 years developing the first spectrum analyzer. We invested huge money on that one. [ That's impressive. ] [ Is it hard to get good people? ] [ Good hardware designers that know how to design these? ] [ Or did you have to steal them from other companies? ] Our engineers from two sources. At the beginning, we hired some high-end engineers, and built our core team. Maybe around 15-20 core guys. And every year, we hire some good students (some masters degrees, some bachelor degrees) from some famous universities in China, and training them -- giving the time and space to grow. So up to now, I think we have enough R&D resource already. [ And it's mostly Chinese engineers? Or have you got some from the U.S. or somewhere else? ] No, all our engineers come from China. We have one sales team in the United States, and one in Hamburg, Germany. But all of our R&D is in China. [ Where do you sit in the market at the moment in terms of volume ] [ for test equipment? Number 2? Number 5? ] In 2006, we were only 5% of one of our main competitors -- but at the end of 2011, we are beyond them already. I think right now, if we calculate the quantity of oscilloscopes, I believe we're maybe around number 2? [ Who is number 1 at the moment? ] Sorry, I can't say their name. [ That's alright! We won't say who number 1 is, but you're very close. ] Yeah, very close. [ What is your biggest market? ] [ Is it China? US? In terms of sales volumes. ] We built our sub-company in the U.S. in Ohio last year. Since that time, July last year, the U.S. market has become the biggest one. And I believe the second one is either China or Europe. [ Is it important to keep producing new models? ] [ How long can one model last in the market? ] [ You've just released this oscilloscope, how long do you ] [ expect it to last in the market before you have to replace this? ] I think around 4 or 5 years. [ You've just released this, so would you start the next model now, or start thinking about it? ] [ Or would you wait a year? ] The whole R&D process is like this: When we launch new products, even newer products are already in development. We are developing some new products now. We have around 100 engineers, so many products are developed at the same time. [ What is your firmware update policy? Do you release firmware on your website so it's easy to download? ] [ Because I know some other companies (who I won't name) are very reluctant to release their firmware. ] I think service is very important, and firmware updates are very important too. So, after some we released our new firmware to fix some bugs and from the current update version we gave more details of our firmware versions , such as what kind of bugs we have fixed in this version and what kind of features have added in this version, and this sort of documentation when we release new firmware. We focus on our customers very deeply, and if you buy Siglent product, don't worry about service, don't worry about software bugs. We have launched SDS2000x in this monday But last week we released updated firmware for our old SDS2000, so all our customers who had bought our old SDS2000 already can get the same updated firmware version at the same time. We focus on our customers very much. [ Because when I did the teardown of this and I found a few bugs, you had it fixed within a day? ] Yeah, we can fix bugs in maybe half a day, but we have a process -- we have to test it, and do some other process. I think in one or two weeks we'll update the firmware, and post it on our website. [ Something like the function generator and the oscilloscope for example, ] [ it's very common for most companies now to build the hardware capable to, say, 200 MHz, ] [ and then sell a 50 MHz version and software is the only difference. ] [ Is that a concern that people will hack these things? Or is that not a major concern? ] I'm not concerned about this. If we gave some options to the customers, maybe they can buy our option to update. Right now we offer options to provide MSO, AWG, serial decode -- these kinds of features. Maybe in the future we'll give the option to update the bandwidth. I don't worry about this. [ So do you do that to save cost? Is it a good cost saving to ] [ build it into the hardware and then sell software options? ] Yeah, it is good for the customers. Buy offering options. customers can buy our products first -- maybe the lowest-end one, and in the future they can buy options to update it. We'll use this strategy in some of our future products. [ Now I'm going to have to ask this question, it's going to be very tricky. ] [ But everyone will hate me if I don't ask. ] Sorry, what does "tricky" mean? [ "Tricky" means difficult to answer, maybe -- so, we'll try you. ] [ There was a lot of discussion on my forum about the eBay thing which I'm sure you're aware of. ] [ Can you tell us the story behind that? ] Yeah, so I'm so sorry, this kind of thing makes many hobbyists a little angry. Maybe I can clearly explain about this. There are some authorized distributors, who sell to other countries very far away from their location, and haven't supplied any service. It's a big problem for us if there are too many of this kind of distributor. So since 2 years ago, we began a process to arrange for a guy at Siglent to monitor these sorts of distributors on eBay, these kind of sites. [ So you had somebody looking for issues. ] And if we found this kind of distributors, we persuade them -- "you need to sell in your own area only, or you need to be authorized by us." We did this process for 2 years. But from maybe this September/August we have a new student who's just come from university a young girl to do this. She got number one in the test for all the students. Every year we hire many students from universities, like I told you just now. And maybe she's lacking life experience, and can't distinguish authorized distributors vs who is selling used equipment. So she did the wrong thing, yeah. We have done this for around two years, and (until now) no incidents have happened. [ So you're definitely not targeting second hand equipment on eBay? ] One of the most important thing for Siglent brand is our service. For example, we supply the new firmware for our old SDS2000. I think having service that makes the customer happy is very important for us. For example, in the US we offer a 30 days no-questions-asked money back guarantee, but if the customers buy from these sorts of distributors, we can't do it. We have our subcompanies in the United States and Hamburg, Germany, but in South Asia, in Australia, in other places, maybe South America, we haven't got our own company; we only have distributors. Buy the products from the local distributors, maybe the customers will have service problems. So we worry about this very much, so we do this process. But I think, from now on, we'll do it very carefully. But in here, maybe it is the most famous hobbyist electronics forum here I suggest that the customers please buy Siglent products from your local authorized distributor, [ Because then you get the local service ] [ Whereas if you buy it from overseas on eBay, and something goes wrong, ] [ you can't really return it -- it's very difficult. ] [ Do you miss actually designing things? ] [ Because you're a software designer. ] Because Siglent has gotten bigger and bigger, we have more and more better software engineers than me, so there's some young guy who's much better than me! [ But it's still fun though -- how much input do you have into the R&D side of things? ] [ Are you getting into the meetings for actually designing these? ] [ Your organization is small enough, with 300 people, that you can still have a personal hand in everything. ] No, no, no because with Siglent in the old times, maybe 10 years ago, I could do everything: the code, sales, ... 10 years ago, I was the only salesperson, but now I can't do it. We have more than 100 engineers, and more than 50 salespeople already. So, I can't do anything anymore. We have a VP, he is our CTO, a partner of Siglent: Mr. Zane Zhao. Zane Zhao helps us manage the whole R&D team. And our other VP, he is my classmate -- both of us founded this company. JK Shao focused on the supply chain, and we have another guy focussed on the domestic market I, myself, am a little more focussed on the overseas market. [ Do you plan on being Number 1? ] Well, I hope so. But I believe taking everything day by day. Let everything proceed naturally, don't push it too much. [ Thank you very much for coming all the way to Sydney, Australia. ] [ Appreciate it, excellent, it's not every day we have a CEO! ] [ Hope you enjoyed that guys, catch you next time! ] Thank you.
