Corrigan: We're aiming at $5bn

Corrigan: We’re aiming at $5bnLSI Logic has just turned on a $1bn fab in Oregon and founder Wilf Corrigan is looking for a big return. David Manners spoke to him
What do you do when you’ve built a $2bn business? Build a $5bn one, says Wilf Corrigan, the former Imperial College student who founded LSI Logic in 1981.
“I’ve been in this business most of my working life (Motorola in the ‘60s and Fairchild in the ‘70s) this is mainly what I do. If you look at the semiconductor industry there are two safe places to be – one is in a niche up to $1bn a year, the other is to be $5bn or more – but the space in between is a more difficult place to be. So we need to get to $5bn pretty quickly – it’s a more protectable position,” explains Corrigan.  
  LSI founder Wilf Corrigan… “If you look at the semiconductor industry there are two safe places to be – one is in a niche up to $1bn a year, the other is to be $5bn or more.”-
Why? “Because we’ve just turned on a $1bn fab in Gresham, Oregon. When we get to 0.13 micron, fabs will cost $2-3bn – we need a customer base to support that investment.”
“The other way is to use foundry. Volume product is easy to contract out but if you ask a foundry for 20 wafers of this or 30 wafers of that, they won’t show much interest”.
Last year he bought Symbios Logic for $700m to get into the storage business. Had he paid too much for it? “Symbios is one reason why we’re going to do $2bn this year,” responds Corrigan. In 1998 LSI did $1.4bn. He reckons Symbios will contribute $1bn in revenues in 2000. Last year it did $600m.
“For instance we’re making a big thrust in fibre-channel which requires a lot of software people and Symbios has a lot of good people. It’s difficult to build up such a group”.
LSI is taking the mainly half micron Symbios product line, converting it to 0.35 and 0.25 micron, and getting it into LSI’s marketing channels outside the US which was, before the acquisition, Symbios’ main market.
Are the programmable logic companies eating his lunch? “No they’re eating the dregs of the business,” responds Corrigan feistily, “we’ve been de-emphasising gate arrays for some time – we’re glad to see people picking up the stuff we’ve left behind.”
With programmables up to one million gates, the low-end gate array business is going programmable. “Take a company which only makes 100 machines a year. They need an IC but if they ask us to do a design that’s maybe one wafer. That sort of job is better done by a programmable,” says Corrigan.
Nonetheless he acknowledges that not getting into programmables when he could have done was “probably a missed opportunity”.
An opportunity he didn’t miss was the Internet stock market boom. He bought Yahoo shares at 6 cents and sold them at $185 (“Since when they’ve doubled”, he says ruefully) so he probably thinks he’s had the best of the market bubble.
Though he doesn’t rate Internet stocks a good investment any more, he has got VC (venture capital) money in Internet start-ups. He claims: “VC is one of the most conservative investments.”
How’s that? “Generally, any VC fund I put some money into I know the people who are running it. They’ve separated the wheat from the chaff. The good guys (there are some dumb ones too) select very well. They go onto the boards of the companies they invest in and generally do an excellent job”.
That Silicon Valley attitude to VC investment is very different to the attitude here.
“Here people think VC investment is like a crap-shoot – you put money into 50 companies and one makes it – that’s quite erroneous. In Silicon Valley if you put money in ten companies, only one or two get liquidated and the others either go public, and provide substantial increases on the investment, or they get sold and make big profits”.
He should know. He says the Sunday Times estimate of his personal wealth at $250m is pretty near the mark.

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