September 4, 1976
Integrated Technology Corporation is a name registered initially as a parent
corporation of Integrated Circuit Engineering. Integrated Technology
Corporation was sold to Bowmar Instruments Corporation and the name subsequently
has been sold to a new Arizona corporation headed by Gary Orman.
Bud Frye will probably have to find a new name for his company. Bud Frye
is quite competent in LED production but probably is a little light on the
experience necessary to make the old LSI Systems activity operate. This plant,
originally constructed by Qualidyne, was subsequently sold to Standard
Microsystems and then to LSI Systems. For a brief period of time was owned by
ICE. The plant, equipment, and so on is too old to be economically productive
and a considerable amount of money will be required to upgrade the facility to
make it competitive. The best the facility ever did was approximately $.5
million a month in profits when the electronic watch chips were in short supply
and yields were satisfactory at that price level.
Transitron is typical of companies who started out well but did not keep up with
the technology and markets. I can't help but wonder what would have happened to
Transitron had they been located in Silicon Valley where a certain amount of
"keep-up" can be accomplished through exchange of personnel and informal local
communication channels. Transitron's final effort was an ambitious and
expensive bipolar microprocessor development.
In contrast to Transitron, Analog Devices has done quite well in Massachusetts
and has set up a plant in Ireland. By specializing in linear technology and
some A/D conversion, Analog has managed to hold a growing position in the
market. The Analog Device plant in Santa Clara has provided them with
additional communications to the processing and design skills available in
Silicon Valley. Analog Devices still has a technology indecision between I2L
and CMOS, but the Ireland plant is CMOS.
COMMODORE - NITRON/PURCHASE OF MOS TECHNOLOGY
Commodore thus far has always paid its bills to its vendors, Nitron and MOS
Technology. With Commodore's agreement to acquire MOS Technology, Inc., it may
be expected that the Nitron business will drop to zero. Commodore's purchase of
MOS Technology is so lucrative that it should help their cash and/or mortgage
position by $2 million or $3 million substantially easing their cash position.
Al Stein is apparently stirring things up at Motorola and it's too early to say
whether net results are good or bad. Certainly, Motorola needed to be stirred
up on process technology and it's probable that this part is good. It's
entirely possible that Stein will do Motorola a lot of good in processing and
ultimately get fired for his efforts because his management methods are pretty
much contrary to the traditions established by Galvin, Bill Weisz, and John
Mitchell and John Welty.
Timex seemingly has had many internal upheavals and is finally settling down
management-wise to determine which direction it should go in electronic watches.
National's watch problems with respect to both chip yields and assembly yields
should be solvable. Yield in watch assembly is usually not quite the disastrous
problem that the chip yield presents, since some repair and replace is available
at the module level. Of course, if this repair and replace is excessive, the
cost is prohibitively high and thus the profits are lost.
WESTERN DIGITAL/MARSHALL COX
Emerson has taken a good deal of time and has difficulty with Digital Equipment
Corporation agreeing on a compromise general manager. Marshall probably will
get the nearly impossible job of straightening out Western Digital.
NATIONAL VS FAIRCHILD IN WATCHES
Fairchild continues to do well in developing its watch business and is something
ahead in terms of chip yield, styling, and higher price merchandising than
BOOKINGS AND GENERAL BUSINESS CONDITIONS
Financial analysts and much of the stock market have used the bookings as a
measure of semiconductor company's performance. Because of the inaccuracies of
the system and the definition of bookings, it is still a little dangerous. It's
possible that since all analysts use bookings, the stock price will go up or
down reflecting the bookings but profit performance will not necessarily follow;
i.e., in some cases the higher bookings can be secured by a lower or even
unprofitable price in new products. A company which has high bookings may have
gotten there by booking at too low a price. Booking at too low a price is
especially dangerous now since people are approaching their production
capacities. For example, Bob Noyce indicated that he was very glad that Intel
did not book their 4K business in competition with TI since they were able to
come in at very substantially higher prices at a later time. Overall, business
conditions are good, but the details of the market will elude most planners,
since in specific products availability ranges from surplus to shortage.
With the current takeover of masking by projection mask aligners, with this
followed in about five years with e-beam technique, it appears that the
photoplate business is going to level off or probably decrease. Agfa-Gevaert is
edging Kodak out of the $15M/year emulsion photoplate market with better quality
and higher resolution needed for bipolar LSI.
ITT NORM MILLER
Norm is one of the very experienced semiconductor managers in the industry with
background at Motorola, Fairchild and Signetics. Because of Norm's technical
background, we can expect that ITT will be able to move both their MOS and
injection logic capability from Europe to the U.S. and as a result could become
a formidable factor in the U.S. market. ITT has done well in the bipolar
interface business and on selected huge custom logic orders from companies such
© 1976 Copyright Integrated Circuit Engineering Corporation