Mannerisms

The board of parent company Siemens AG decided that, to protect its data processing and telecommunications businesses, it needed to be world-class in semiconductor manufacturing.

In 1984, Jurgen Knorr was made CEO of Siemens Semiconductors with the brief to give the company a world class capability.

His first judgment was that he needed help. He concluded that the French felt themselves too superior to co-operate, and so went to Philips.

Hence the Philips/Siemens 'Megaproject' to develop memory technology backed by the Dutch and German governments.

"The German Minister of R&D encouraged it - they had criticised Siemens for being a bank", chuckles Knorr.

Siemens had piled up a cash mountain of some $14bn at the time.

Between 1985 and 1993 the company poured $3bn of the mountain into acquiring state-of-the-art CMOS technology.

Siemens’ total CMOS sales during those eight years were $2bn. It takes a dedicated engineering company culture to accept that level of pain to acquire expertise.

Despite a brilliant team, it soon dawned on Knorr that the timescales set by the competition for developing the 1Mbit DRAM were too short for Siemens to match.

Once again, Knorr looked for help.

"We went to Japan and discussed with NEC, Fujitsu and Mitsubishi if they were willing to co-operate on the 1Mbit", recounts Knorr, " but the only person who was really aware of the possibilities was Tsuyoshi Kawanishi of Toshiba - one of the brightest thinkers in the industry. So we took over the 1Mbit from Toshiba."

Taking public money to develop the chip, then calling in the Japanese to supply the technology gave the German press a field day.

"They criticised us heavily - they were crazy - they didn't understand", says Knorr.

"Toshiba was the master of manufacturing CMOS. We spent half a billion deutschmarks bringing up the Regensburg wafer fab and Toshiba taught us how to manufacture in it,” remembers Knorr.

New problems, however, were never far away. "Philips, at that time, was running into problems. They decided to pull out of the Megaproject", recounts Knorr. So, for the third time, he looked around for help.

"We came together with IBM and started co-development of the 64Mbit", continues Knorr. Again he ran into critical flak for going with an American partner when he was taking money from the German government and from Europe's JESSI programme.

"The German government chucked us out of the funding when we went with IBM", recalls Knorr, "we told them it was the cheapest way of funding the technology but they cut off the funds - crazy guys. We had no more funding from JESSI as a result of that. But our chief financial officer said: 'Leave governments alone; what you want you get from my pocket'".

“The 64Mbit development went well. IBM was very enthusiastic about our physicists", says Knorr, "when it was complete, John Akers (IBM Chairman at the time) said: 'Let's carry on. What should we do?'
“We said "Let's invite Toshiba in'. “
“They said: 'The Japanese?' “
“We said: 'Yes'. “
“So we asked the Toshiba people in, and then we had a party of three."

That was for the 256Mbit development. Later the party was extended to four when Motorola joined in for the 1Gigabit project.

So the project that started out fourteen years before as a German company wanting to protect its telecommunications and data processing businesses, had transformed into an inter-continental alliance dedicated to staying at the forefront of microelectronics technology.

No accountant would have followed that path; no pure businessman would have stayed on that track; it was a route that would be taken only by an engineer in an engineering company.

How far has that engineering culture been replaced, in the European chip industry of today, by an accountancy culture?