By almost any measure, fiscal 1995 was an outstanding year for Xilinx. Revenues rose 38% from $256.4 million to $355.1 million. Operating income increased 41% from $65.2 million to $92.0 million, and net income grew 44% from $41.3 million, or $1.71 per share, to $59.3 million, or $2.40 per share. Both operating income and net income as percentages of revenues were the highest year end ratios in the Company's history. In calendar 1994, Xilinx became the world's largest supplier of programmable logic products, surpassing Advanced Micro Devices. In addition, Xilinx is now the 10th largest vendor of Application Specific Integrated Circuits (ASIC) in the world, as estimated by Dataquest, a market research firm that follows the semiconductor industry.
As we have reported previously, the programmable logic market is very price elastic. Recognizing this, we have developed three strategies to expand our overall position in this market and in the larger mask programmed gate array market.
Our first strategy is to continue to reduce prices aggressively, commensurate with our ability to lower manufacturing costs. In the first four months of calendar 1994, Xilinx made two closely coupled price reductions that adversely affected the June quarter results. As expected, these price reductions fueled higher unit volumes and increased sales for the remainder of the fiscal year. XC4000 family revenues increased nearly 80% year-over-year and accounted for 34% of fiscal 1995 sales. Together with XC3100 products, these device families will continue to be the principal drivers of revenue growth in fiscal 1996. Design-win activity, which historically has been the best indicator of future revenues, was at an all-time high at year end for these proprietary products.
Our second strategy is to introduce innovative, new product architectures that target new markets as well as high-volume, low-cost applications. In late November, we introduced our newest architecture, the XC5000 family, which was developed as a cost-effective, high-volume alternative to gate arrays. The CMOS gate array market for devices under 20,000 gates represents a $1.2 billion market opportunity for Xilinx, according to Dataquest. The XC5000 family sets new standards of cost effectiveness for high-density, programmable logic through a combination of innovative architecture and advanced submicron process technology. This family will allow us to enter new higher volume market segments.
Our third strategy is to continue the enhancement of our software, which reduces prices for our customers by improving silicon utilization and performance. We know that software is a key enabler in delivering the benefits of programmable logic to a larger customer base. As a result. we acquired NeoCAD, Inc. (NeoCAD), a developer of Field Programmable Gate Array (FPGA) design software. Given the growing demand for higher-density FPGA products, we feel the combination of NeoCAD and Xilinx will have a major impact on broadening our customer base by providing more effective software for higher density devices. While software represents less than 5% of our total revenue, we have always recognized how critical it is to the success of Xilinx. We have stated emphatically that both software and integrated circuits need to be developed concurrently within the Company. The crucial balance among device density, performance, cost and delivery is intimately related to, and in most cases driven by, the co-development of silicon and software.
We believe that our three strategies-lowering prices commensurate with cost reductions; introducing new, innovative architectures; and developing more powerful, easier-to-use software-will enable us to expand the programmable logic market and further penetrate the gate array market.
Clearly, programmable logic trends are accelerating. Dramatic increases in device densities and speeds, along with new process technologies, will occur in the coming year. Our customers, such as the ones highlighted in this report, are driving the demand for complex, programmable logic products. This is happening because their product cycles are shrinking rapidly and end user markets are becoming more competitive. Xilinx's research and development spending, which exceeds that of any other pure play programmable logic supplier, is directed at meeting our customers' changing needs.
To lead the Company in achieving our strategies, we welcomed Curt Wozniak as President and Chief Operating Officer, effective August 1994. Mr. Wozniak spent more than 10 years with Sun Microsystems in senior management positions overseeing manufacturing, engineering and marketing. He brings to Xilinx the experience of managing rapid growth and a relentless drive for superior bottom-line results.
As we enter fiscal 1996, Xilinx is well-positioned for continued success. We intend to double the current number of product architectures during the coming year. When combined with our enabling software, our customers can fully utilize the attributes that the new architectures will offer. We will also continue to migrate many of our existing product families to more advanced process technologies, which will result in additional improvements in price and performance for our customers.
As we look back on the accomplishments of fiscal 1995, we recognize that the outstanding efforts of our employees, coupled with the support we received from our customers, distributors, strategic partners and shareholders, played an instrumental role in our success. Thank you all for making fiscal 1995 a great year for Xilinx.
Bernard V. Vonderschmitt
Chief Executive Officer
Curtis S. Wozniak
President & Chief Operating Officer
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