January 2009 Archives

This week's lesson in how to manage a semiconductor company by the famous CEO of Toshiba Semiconductor, Tsuyoshi Kawanishi, taken from his book Chip Management, looks at how to deal with the notorious Silicon Cycle.

The fact that Citigroup can order a new executive jet a few weeks after taking $45 billion in tax-payers' bail-out money, shows that the bankers just haven't got it yet.

The merger, now underway, of Matsushita and Sanyo is an unusually romantic business story.

Will we ever trust economists again? The Queen put her finger on it exactly when, during a visit to the LSE, she asked the economists: "Why didn't you see it coming?"

Thanks to Doug Dickinson of Linear Tech for this piece which was  published in the US press earlier this month under the headline:  "Service Outage (a note from the USA)" via Rolling Stone : National Affairs Daily by Tim Dickinson on 1/23/09. The article reads: 

We've had an unprecedented amount of comments on the situation at NXP with a CEO transition from Frans van Houten to Richard Clemmer. In response to reader requests for a compendium of all these comments, here they are:

Last week, discussion in The Wheatsheaf  turned to solving the problem of Guantanamo Bay i.e. what do you do with around 250 presumably rabid anti-Western guys after you've closed down their prison?

Crikey Moses. The chip market fell 22.5 per cent in Q4, could fall another 20 per cent in Q1, and may be 28 per cent down in 2009, according to Future Horizons at the company's International Forecast Seminar 2009 (IFS2009) in London yesterday.

Here are the ten best electricity-based inventions:

The most miserable thing about downturns is job losses. If you keep your job through a recession, the recession doesn't hurt you. If you lose it, it hurts like hell.

Has Intel scored the most spectacular own goal with its Atom microprocessor? After all, Intel and Microsoft did an amazing job in keeping PC prices high for about 25 years when Moore's Law said the prices should have halved every eighteen months.

The mad idea of trying to sell TV-to-the-cellphone is running into totally predictable problems.

See also Craig Barrett resignation sparks Intel manufacturing queries

Craig Barrett's resignation as Chairman of Intel was not done in the normal Intel way. When Gordon Moore handed the CEO role to Andy Grove, Moore retained the position of Chairman. When Grove handed over the CEO role to Barrett, Grove became Chairman and Moore became Emeritus Chairman. When Barrett handed over the CEO job to Otellini, Barrett became Chairman. Not so this time.

'When I was a student at the naval academy in World War II, I learned that there ware three levels of directives to subordinates: commands, orders and instructions.'

Will Intel have to change its business model to compete in the netbook market? After all Intel likes fat margins on its CPUs, while netbook CPUs are going to be low-margin, and Intel builds its fabs for high performance, while netbook CPUs require low-power CPUs - or they will when ARM-based netbook CPUs hit the market later this year.

'For a number of years microminiaturisation has been promised as just around the corner and now, well into 1961, it is still just around the corner' starts the comment column in Electronics Weekly's edition of March 15^th 1961, continuing 'each year the exhibitions show a crop of experimental devices, but hardly any down-to-earth hardware has been produced.'

It turns out there have been worse deals made by private equity companies than the disastrous takeover of NXP by KKR, Permira et al.

Sony seems to be handling the restructuring of its electronics business very clumsily leading to a sharp deterioration in morale at the company.

Here are the ten best inventions of all time:

Here's a bit of a turnaround. Last year all the noise was that the foundries would soon be holding the industry to ransom as the IDMs became increasingly dependent on them.

There was once a pioneering company which had a huge success with a class of computer dubbed a minicomputer.

How very wise that remark of Linear Tech's CEO Bob Swanson was when he said last year: "There's no pot of gold at the end of the cellphone rainbow, just a lot of red ink."

'Semiconductors are like a new hit song composed on an old classical theme', writes the legendary former CEO of Toshiba Semiconductors Tsuyoshi Kawanishi in his book 'Chip Management, 'What I mean by this is that the applications for semiconductors are nearly infinite, but the basic technology itself is classic'.

The miserable saga of Rambus drags on as the company makes an enemy of a Delaware judge by destroying relevant evidence.

So what's the Middle East Peace Envoy been doing this last eighteen months?  Not very much to judge by the carnage in the Middle East.

Jack Gifford, the founding CEO of Maxim, died earlier this week, He made his name at Fairchild, as a co-founder of AMD, and at Intersil before founding Maxim Integrated Products which became an outstanding success.

Intel, stung from taking a $950 million write-down on its investment in Wimax operator Clearwire, has announced it is going to be advising the new US administration to focus on wireless broadband and Wimax.

What we want in the UK, according to Simon Bond who runs the SETsquared programme for stimulating hi-tec start-ups, is some good exits. The techies have done their stuff building great technology, now the market needs to reward their backers with some juicy IPOs and trade sales.

Buying the past happens more often than you might think. Especially when bureaucrats are doing the buying. When Japan's government decided to take over the world computer industry in the 1970s, Japan's bureaucrats decided that Japan should build home-grown, vertically integrated, mainframe companies - just as the computer industry was about to go for the PC.

Are we in for a decade of no growth as happened to the Japanese economy when the 1980s asset bubble burst in 1990, ushering in the '90s decade when the stock market remained on its knees and interest rates went to zero?

Intel's $1.6 billion investment in the consortium which owns the fledgling Clearwire Wimax network has suffered a bit of a blow. It's now only worth $650 million.

'A new company, GEC Semiconductors, has been formed to produce the largest wholly UK-owned semiconductor company. This brings together under a single management the semiconductor activities of AEI Semiconductors at Lincoln and those of Marconi-Elliott Microelectronics at Glenrothes and Witham'.

So starts a story in Electronics Weekly's issue of August 13^th 1969.

If you want a good laugh over the next few weeks just think of all those investors in private equity companies who will get a letter in the next few weeks telling them how much, or rather how little, their investments are worth.

2009 should be a hot year as ARM really comes into conflict with Intel. ARM-based chip-sets for netbooks are out from Freescale and Qualcomm, with the Freescale chip-set claiming significant advantages over Intel's Atom: 8 hours battery life (typically 3 hours on Atom); a $20 chip-set + peripherals for ARM vs a $60 cost for Atom; and an end-product price of $200 for an ARM-based netbook compared to the $400+ for an Atom-based netbook.

Like dogs, every now and again the DRAM industry has its day. It's always been like this. The manufacturers make massive losses for years, the market remains over-supplied, the prices slump below production cost and then, like rain in the Sahara, everything blossoms at once: prices stop falling; demand soars, supply is limited and everyone makes an absolute packet.

Could rain be about to fall in the Sahara?

The future of solid-state devices is rosy, despite some serious problems yet to be overcome, according to several Bell Telephone laboratory speakers at a solid-state devices colloquium at the California Institute of Technology at Pasadena, California.'

So starts a story in the 'American Letter' column of Electronics Weekly's issue of March 22^nd 1961.

When Philips sold NXP to KKR and a consortium of private equity companies, NXP was valued at $11.6 billion.

The greatest leader the semiconductor industry ever had was Bob Noyce, co-inventor of the IC, co-founder and founding CEO of Fairchild Semiconductor, co-founder and founding CEO of Intel, founding CEO of Sematech, known to the industry as: 'The Mayor of Silicon Valley'.

A sign of the times: chip companies are turning to lawyers to boost revenues. The US International Trade Commission reports the highest number of new IP complaints in 2008 since 1983 - a total of 42.