How To Run A Semiconductor Company By Tsuyoshi Kawanishi
How To Manage A Semi Company Part II By Tsuyoshi Kawanishi
How To Run A Semiconductor Company Part III By T. Kawanishi
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.
'When people start thinking that the good times will last forever and they start kissing the silicon cycle good-bye, this is always a sure sign that bad times are ahead.'
'And when the downturn starts taking its toll, and the mood turns gloomy, this is always a sign that good times are round the corner.'
'As long as the semiconductor industry continues growing rapidly, and as long as the fast pace of technological innovation continues, there will be a silicon cycle.'
'The following variables and factors ten to encourage and exacerbate the silicon cycle.
- Continued technological innovation and technical competition.
- New players coming into the business
- High fixed costs which induce companies to continue producing in large volume even when sales decline.
- The tendency of the industry to over-react to changes in the general economic environment.'
How To Cope With The Silicon Cycle
1 Maintain a balanced mix of products. Even in recessions not all applications will be down.
2. Product differentiation and customer support. When recession occurs customers cut down on their vendors so ensure you have the best performance, price and service.
3. Strengthen your customer base. Increase the variety and number of your customers either by industry or by geography.
- Long-term customer vendor partnerships. Forge vendor-customer relationships at every level of the organisation - top management, sales people, engineers and factory people.
To successfully negotiate the Silicon Cycle, management must:
'Have foresight, consistency of purpose and a sense of balance in order to overcome the silicon cycle.'
'Stop complaining about the ups and downs of the silicon cycle. There are business opportunities at all points on the cycle.'
Hi David,
is it not the case that Toshiba and the rest of the Japanese industry have for the last 20 years concentrated on their insular market and not diversified their customer base like Kawanishi san preaches?
Or maybe nobody is a preacher in their own country...
I think you're right, Anon, and I think it's not just in Japan. Kawanishi was one of a breed of great semiconductor CEOs (e.g. Noyce, Moore, Grove, Sporck, Sanders, Sevin, Haggerty, Shepherd) and when he, and they, retired, there've been precious few in the last 20 years. Pistorio certainly is one. Swanson at Linear Tech is another. Gifford at Maxim also. I think Schumacher at Infineon had a touch of greatness. Beyer totally remodelled Intersil. So there've been a few, but the last 20 years has seen a dearth of great CEOs. I don't know why.
I think the answer to your point (I don't know why) is that all of that first generation were defining the industry: they were the pioneers and actually created the semiconductor industry as an industry.
Not meaning to criticisize them but there is "survivor bias": those names are famous because they created the winners.
It is much harder to reshape an industry, or to turn-around a super-tanking as it drifts off course.
The other ones I'd add would be:
Henry Nicolas (baking mad agreed, but he made Broadcom)
Irwin Jacobs - again, not perfect, but Qualcomm as a semiconductor player
Morris Chang ? A great CEO, and he makes more chips than most ;)
And then of courese, some suggestions here ;)
http://www.electronicsweekly.com/Articles/2009/01/08/45230/arm-freescale-ceos-among-semiconductor-insiders-to-watch-2009.htm
How should one define "great" in the context with which you have referred it to?
Juniboss: Successful in terms of how the semiconductor industry rates success: i.e. innovative, profit-making, growth-achieving and passing on a better company to the next CEO than he inherited
You're right Roberto, and I agree with your additions. But some of the later CEOs like Pistorio and Schumacher had the boldness, energy and innovativeness of the early CEOs, particularly in the way of getting Governments and Universities on-board and in forming clever alliances.