Thursday, May 03, 2007

Excerpts from interview with CEO of Microchip Technology Inc.

At EETimes.com, Steve Sanghi, CEO; expresses some unconventional views of the semiconductor industry.


-"Semiconductors are a $350 billion industry. Historically, the semiconductor industry has been built on growing 17 to 18 percent a year. This cannot happen forever. Semiconductor companies are also largely built on these ideas: 'Build it and they will come. Price the parts for tomorrow. Moore's Law. Move to the next geometry.'

But the industry is slowing now. Most pundits say the semiconductor industry will grow 7 to 8 percent a year. The semiconductor industry needs to adjust to these mature growth rates, but I'm not sure it knows how to do so. And the 'build it and they will come' idea just won't happen anymore"...

-"private equity comes in and they believe that semiconductor companies are sitting on all-time historic high cash flows. However, I believe some of these private-equity deals will go bust. I believe private equity is going into the excessive bubble phase"...

-"what did we do to fix the company? This is where I didn't take any of the proposals from the consultants. We really needed to design our own system. Years later, we ended up giving our system the name 'Aggregate System.' It essentially means to re-design the enterprise, in which all parts of the company are working together"...

-"We don't ever build fabs. We buy other people's mistakes. The world is going to 300-mm, where I don't need to go. Our products don't require the bleeding-edge of lithography at 45-nm. There are so many 200-mm fabs that are up for sale and going on the market. We also have additional clean room capacity in our Oregon fab"...

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