AC #600 Integrated Circuit Engineering Collection Series 16

November 13, 1976   Description:

    A series of 1976 reviews of  Don Hoefler's Microelectronics News

    ICE Collection - Project File 10085 - review of :

MICROELECTRONICS NEWSLETTER
November 13, 1976

THE NEW INTERSIL
Hoefler's review of the management of the new Intersil is a clear indication of the strengths and weaknesses of the combined companies. The original entrepreneurs/inventors, Jean Hoerni of Intersil and Bob Lloyd of AMS, are gone. Many of their basic ideas remain. Hoerni was never a leader in management, but was of course very strong technically. His patent has earned Fairchild tens of millions of dollars in royalties.

The next growth step of the new Intersil will be fairly sobering. From a fairly narrow product base, they will have to take on major companies such as Intel and Texas Instruments in production effectiveness to get anything like a reasonable share of the memory device market. Pressures from companies such as National in the completed systems market certainly will be formidable.

The new Intersil's chances of winning against the big boys are partly related to the growing problems at National, Fairchild, and to some extent Texas Instruments and Motorola. With sometimes incompetent middle-management, the Big Four has continually raised the specter of such things as yield problem on watches in production, reliability problems on both MIL and non-MIL parts, occasional blood baths in new ventures such as consumer products, and, in general, personnel policies which limit the attractiveness of the organization. The ability to achieve reasonable riches or something comparable to the personal paper worth of Bob Noyce and Gordon Moore of Intel, Charlie Sporck of National, Mark Sheppard and a handful of others at TI, is somewhat difficult. New middle- management comes with the realization that with the current mathematics related to stock options and practical pricing, the only really big winner would be one in which the market price of the stock moves up in substantial amount. While the new Intersil may not achieve this, the availability of the mathematical formulation plus Ori's personality at least provides him with an opportunity to attract the best people of the industry. This is the key to his competition with the "Big Four" and as a practical matter suggests some winning qualities. Even very junior engineers receive stock options at AMS which really makes them feel part of a growth situation.

Hoefler's analysis of the concentration of business in a few customers is misleading. It does indicate that most of AMS business is in systems, and AMS has been hurt before by their major customer slowing down. However, Intersil's sales to a distributor (Schweber) would continue pretty much the same if the distributors changed.

NATIONAL SEMICONDUCTOR
National Semiconductor appears to be dropping completely out of the finished watch and calculator marketplace. All expansion programs have been put on the shelf and plant closures during the holidays are serious with some workers working without compensation. The unity book to bill ratio as reported by WEMA in September put a lot of concern in the hands of most Silicon Valley producers; however, exceptions appear to be General Instruments and Motorola, who continue to hang in there with major expansion plans.

TRADE SECRETS, PATENTS AND COPYRIGHTS
Proper utilization of the trade secret, patent, and copyright laws is very complex and not much finesse has been developed in the semiconductor industry. For example, the older chemical drug industry has a lot more respect for patents than the semiconductor or the electronic industry. While there is a serious disadvantage in the possibility of inventing some new semiconductor process or device only to lose it, the same company also has fairly good insight as to the research development efforts of others. Thus, there seems at least a possibility of gaining about as much as you lose for the practical research situation.

While there are legal and ethical arguments whether this is fair system or not, it is the real one for semiconductor designers and producers. While there are elements of the market in which trade secrets can be effectively kept because of the lack of research by others, the real secret of the business is to know and understand the practical aspects of current law, litigation, and to have a thorough understanding of what the competition is doing so that management can make the proper decision whether to try the trade secret, patent, copyright law or open bargaining with others, as the better route.

© 1976 Copyright Integrated Circuit Engineering Corporation


Hoefler's Microelectronics News, November 13, 1976


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