Family-centric and customer-driven, Richardson Electronics is a dedicated provider of engineered solutions designed to help its customers succeed
Providing specialized technical expertise and engineered solutions based on core engineering and manufacturing capabilities, Richardson Electronics is a market leader making a difference. Founded in 1947, Arthur Richardson launched the business as a distributor of power grid tubes for the telecommunications industry, but soon pivoted towards growing demand in the semiconductor, transistor and solid-state devices market.
Over the years, Richardson has acquired more than 25 companies in the tube business and today, the provision of tubes, or the ‘Electron Device Group’ as it is known at Richardson, provides around $100 million a year in sales to the firm. Chairman, President and CEO Edward Richardson, son of Founder Arthur, dives into the details.
“At Richardson, we both manufacture tubes and have them made for us exclusively by other manufacturers. It is probably the most profitable portion of our business,” he says. “The tube sector is a half-billion dollar industry, but it is no longer growing in many areas. Consequently, we have recently moved deeper into the semiconductor market, through a division we call the Power and Microwave Group.”
Specializing in RF devices and semiconductors, the Power and Microwave Group is expanding quickly, with its largest growth area in 5G. With the mass rollout of 5G across the world currently in progress, demand for semiconductors and RF modules is on the rise, meaning Richardson’s position as a key manufacturer and distributor in that area is increasingly profitable.
“We do about $35 million in the RF and semiconductor portion of the business,” Edward reveals. “We eventually decided to take some of the cash from our divestitures and invest more in the tube business. When we looked at all the various areas for potential investment, the one part that was still growing was the computed tomography (CT) and x-ray tube sector.”
One of the most sophisticated tube technologies in existence, CT tubes are a major item for some of the world’s biggest corporations, including Siemens, Philips and General Electric. The chance to be part of such a lucrative, growing market was too good for Richardson to turn down.
“We started manufacturing our own CT tubes about six years ago and we have spent close to $30 million on equipment and acquisitions. We’ve hired some really skilled engineers and projects include the manufacture of the ALTA750 CT tube for Toshiba CT scanners (now Canon),” Edward reports. “We sell our tubes for $75,000 – much less than the $125,000 or more Toshiba charges for its tube – so there is a real opportunity for us, considering all the pressure on hospitals to reduce costs, especially in light of the Covid-19 pandemic. Our sales are still increasing in this market and every quarter we are doing more business in the healthcare sector than the quarter before.”
A source of real optimism for the future, Richardson’s CT tube-focused Healthcare Division benefits from a state-of-the art manufacturing facility west of Chicago. With 50,000 square feet of space dedicated to the production of CT tubes, the factory is one of the most modern CT manufacturing sites in the world.
“I’ve been in a lot of CT tube factories across the globe, and we have some of the newest equipment I’ve seen,” Edward states. “A lot of the tooling and fixtures are different for each tube, but the main manufacturing equipment and processing is the same. It’s a huge market, and the aftermarket for servicing and parts in CT is nearly $10 billion a year, so there is a lot of opportunity out there.”
Richardson’s fourth business, Canvys, involves the manufacture of medical displays, primarily for healthcare applications, where the company’s largest customers include Medtronic, Varian Medical, Stryker and Carestream. With manufacturing units in the USA and Germany, Canvys, and the market it serves, makes for a reliable revenue stream of $30 million in sales annually.
“The displays we make for Varian work in conjunction with Varian’s linear accelerators for cancer treatment; our displays are used to control and monitor images from a camera located in the treatment room,” Edward explains. “Canvys is an OEM-oriented business that is quite stable and predictable as clients don’t change their models for years and years – we have been selling Varian a version of the same display for nearly ten years now.”
The broad, diverse nature of its resources has become part of Richardson’s organizational strength. Most importantly, each product or project in which the company participates is customer-driven and revolves around finding specific solutions that best suit client needs.
“The overall theme of what we do is engineered solutions’,” Edward remarks. “We are really an extension of the customer’s engineering capabilities. We employ about 400 people and at least 100 of those are engineers. It doesn’t make much difference as to which one of our businesses you are looking at, what we do is help the customer to design and engineer a product for their systems and then manufacture that product if that’s what they require.”
As the world navigates its way through the back end of the Covid-19 pandemic, in 2021, healthcare and medical products will be a major area of focus for Richardson, as well as the production of modules for semiconductor wafer fabrication equipment. Sales in this business are around $20 million and growing. Elsewhere, the company is excited about the launch of a potential new area of business – wind turbines.
“It’s in its infancy, but wind turbines are more and more popular in this country, as well as in Europe. These turbines are driven by a battery pack, which controls the tilt on the blades, and those batteries have to be replaced about once a year,” Edward notes. “We have now developed an ultra-capacitor module that replaces the battery and gives the user ten years life versus one-year’s life.
“The wind turbine business is amazing. It could potentially be a fifth division for us,” Edward continues. “It’s growing extremely rapidly. There are huge numbers of wind turbines going up every day – not just in Europe, but in the United States and Asia too. Companies running the turbines are really excited about the idea that they could increase the life and repair cycle on these battery packs ten times over. It’s going to be a very important business for us in the years to come.”
As of 2021, Richardson has more than 60 offices worldwide and 60 per cent of its sales are exported to over 40 countries. It’s been an incredible rise to prominence for a business that has, despite its success as a large public organization, never lost its family culture and value-centric approach.
“It’s amazing to look back and remember that when I joined my father’s business, we had just three employees,” Edward recalls. “I’ve now been here 60 years, and in that time, I’ve seen my mother start working here after retiring as a teacher, which strengthened the family theme even further. She worked here until she was in her mid-90s and everyone called her Mrs. R, just like they had called my dad Mr. R beforehand. It’s a true family environment and I think that is why we have an average employee seniority of 20 to 25 years.”
Having made it through a tough year in 2020, Richardson is proud of the way its staff applied themselves throughout the pandemic and the workforce will remain at the heart of the business going forward. The value the firm places on its employees was recently reflected in the way that Richardson continued to pay its people, even when other businesses closed and sales initially dropped at the onset of the pandemic.
“We think people are the future of this business, so we chose to maintain our workforce in 2020 when many companies were letting staff go. It’s really paying off,” Edward asserts. “In the next five years, our goal is to double the size of this business. At the same time, we are a public company and we are quite hopeful that stock will go up proportionally.”
Services: Engineered solutions, electron tubes and related consumables, power and microwave components, custom displays, and replacement parts and CT tubes for healthcare