A Portentous Lunch

3o years ago this year, Jerry Sanders and Irwin Federman were having lunch in the Chantilly, Palo Alto, a restaurant which closed down earlier this year after 43 years serving customers in Palo Alto and, later, Redwood City.

They were merging their companies. AMD paid $442 million for Monolithic Memories.

Chantilly was an expensive restaurant and Sanders paid the bill.

“When I’m with Jerry, he picks up the tab,” Federman told the LA Times, “I figure, the guy who goes around in a Rolls-Royce and carries on his person, in clothes, jewelry and accoutrements, more than my house is worth, well, he pays the bills.”

When the deal was announced, Sanders said: “This is a concentration of force that will make us stronger in the worldwide market. We’re the first, but we won’t be the last to merge. . . . There’s going to be an oligopoly of big players, with perhaps a scattering of small companies. But this concept of a panoply of players is impossible.”

Sanders was right, but he probably underestimated the timescale. The industry remained surprisingly resistant to consolidation, probably because of the emergence of the foundry industry which freed design houses from the expense of fabs, and the major spate of consolidations has only happened in the last two years.

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