Tag Archive: AMD


Suppose an industry staged an annual forecast and awards dinner (e.g., SIA on November 29), and virtually no one gave a particle?

Considering that I worked directly for the Semiconductor Industry Association for two years, and later for a company run by one of its founders for a decade, it is difficult for me to say this, but I must: Semiconductors are now (and maybe forever) a taken-for-granted commodity.

sleepingaudience1

Would you like some salsa with your chips?

Yes, they power every digital and the remaining analog gadget under the sun just like ground beef, chicken or carnitas are essential for making tacos, burritos and enchiladas. Everyone knows this.

So what else is new?

The semiconductor industry is going to be flat this year at $300 billion. It seems like the industry is always at $300 billion. I wrote a speech in 1996 projecting a $300 billion industry in 2000 or 12 years ago for those of you scoring at home.

One company, Wal-Mart alone at $464 billion in revenues (and growing) is larger than the entire chip industry. This is not news.

Earlier this month, the stately Economist published a cover piece “The Survival of the biggest; The internet’s warring giants” about Amazon, Apple, Facebook and Google with peripheral mention of Microsoft.

What happened to Intel, let alone AMD?  They didn’t even make the cutting-room floor.

What happened to the wonders of (Gordon) Moore’s Law (intellectual property content doubling on the same-sized piece of silicon real estate every 18-24 months)? Anyone want to hear that story for the umpthteen time?

What happened to the epic tales of the fight against the evil predatory-pricing, two-headed monster in the form of Japan’s “Business is War” government/industry?

All these stories are now contained in a coffee table book coming to a deep-discount rack near you.

The “Mass Intelligence” Economist references the great technology fights of yesteryear: IBM and Apple in the 1980s in PCs, and Microsoft and Netscape in the 1990s in web browsing. The U.K. popular “newspaper” displays a map, vaguely similar to England, Normandy, Bavaria, Prussia und Dänemark.

England is the “Empire of Microsofts.” Normandy is “Appleachia.” Bavaria is “Google Earth.” Prussia is “Fortress Facebook.”  Dänemark is “Amazonia.” There are small islands occupied by RIMM (Research in Motion) and Nokia, and a nest dedicated for microblogging, “Eyrie of Twitter.” The lowly chip is nowhere to be seen on this map or in the expansive article. Intel is not even afforded a shrinking iceberg.

Some may want to dismiss my musings contending that I am only focusing on one article in one magazine, albeit an incredibly influential publication. They will say the article can be seen as a mere anecdote. These critics could be correct. However, in this case I humbly opine the anecdote represents a trend. For the metaphor types: It is the sick canary inside the mine.

Certainly, there are 250,000 Americans employed in semiconductor innovation and (some) manufacturing. With all due respect to the engineering types in particular, they are mere role players. They are throwing the screens and opening up holes in the line for the superstars: Tim Cook of Apple, Jeff Bezos of Amazon, Mark Zuckerberg of Facebook and Larry Page of Google.

The chip is essential, but so is the sun. They are everywhere. The sun is there. What is commanding attention are mobile platforms and the software that makes them do what they do. Algorithms über alles!

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Rarely did a day go by in the 1990s and the post-Bubble era when the San Jose Mercury, the Wall Street Journal, the New York Times (not suggesting equivalency of influence) would write another gushing, fawning piece about “The Chip Giant,” Intel. No one could accuse the media of shorting the stock.

Today, Intel is trading at $20.52 with a market cap of $101 billion. Ten years ago on this date, the company’s stock traded at $17.58…sounds like a good stock to avoid. Even with all angst, Sturm und Drang about Facebook’s IPO FUBAR, the company still commands a $28.24 stock price and $60 billion in market capitalization. All things considered, this is not bad for a company publicly traded only since May 18 and which was founded in a Harvard dorm room less than one decade ago. If only Intel could grow this fast.

Don McLean in American Pie asked: If the music would ever play again? For the chip industry, the band could start playing if the industry starts growing again; if it comes up with a new way of making chips (e.g., nanotechnology); if it spearheads a new revolution. Incremental changes won’t cut it. And staying stuck in neutral at $300 billion will elicit the same yawns but only 10 years down the road.

Silicon Valley is called “Silicon Valley” for a particular reason that was germane decades ago. Let’s just hope no one seriously suggests changing the name to “Algorithm Valley.”

http://www.eetimes.com/electronics-news/4374705/SIA-expects-flat-chip-sales-in-2012-

http://data.cnbc.com/quotes/WMT

http://www.economist.com/news/leaders/21567355-concern-about-clout-internet-giants-growing-antitrust-watchdogs-should-tread

http://www.economist.com/news/21567361-google-apple-facebook-and-amazon-are-each-others-throats-all-sorts-ways-another-game

http://www.sia-online.org/events/2012/11/29/public-event/35th-annual-sia-award-dinner/

http://www.lyrics007.com/Don%20McLean%20Lyrics/American%20Pie%20Lyrics.html

Whatever happened to Scott McNealy?

We know what happened to his company; Sun Microsystems was swallowed up by Oracle.

And Steve Ballmer? Well, he is the chief executive officer of Softwaremeister Microsoft (Nasdaq: MSFT) with a market capitalization in excess of $200 billion.

And what about “Butthead?” Not MTV’s Beavis and Butthead, but the object of McNealy’s snide quip…His name is Bill Gates, the founder of Microsoft, one of the wealthiest individuals on the planet and a philanthropist. You may have heard of him.

ballmergates

Sometimes reporters, editors, bloggers, analysts, investors bestow rock-star status on C-level executives. And in return, some of these very same executives earn their stripes in part by resorting to let’s say “provocative” activities or tactics. Are these antics, including old-fashioned name calling, in the best interest of shareholders, employees, customers, suppliers and partners…the very same people for whom they have taken a vow of fiduciary responsibility?

“Ballmer and Butthead” is like catnip to the Fourth Estate Crowd, but is it really that funny when the company’s stock is in single digits and heading further south? How about concentrating on your business…a business that is now a part of Silicon Valley’s history.

Why even bring this matter up when Nasdaq: SUNW does not even exist anymore? That’s just the point. As difficult as it may be, C-level executives should be discouraged from engaging in sophomoric behavior and statements by their public relations counsel. The very people who you are denigrating today, you may be facing across a negotiating table tomorrow. Sun ultimately accepted $2 billion from Microsoft to end the protracted litigation between the companies. And Sun was desperate for the cash.

Certainly Scott is not the only former or present executive guilty of bombastic rhetoric, but boardroom deportment is even more important in these days in which literally trillions of dollars of aggregate personal wealth is being erased in just a matter of days, if not hours.

Personally, I would never offer investment advice to anyone and you would wise to not accept Wall Street counsel from me, except for one point: I never invest in companies in which I do not condone the behavior of the CEO. I am also very wary of companies in which the CEO and the company are synonymous terms…Hello Steve Jobs. What’s your blood pressure today?

There is no denying that McNealy is super bright with an undergraduate degree from Harvard and a MBA from Stanford…after all, Sun stands for Stanford University Network. Having said that, there is a difference between bright and smart: “Ballmer and Butthead” in hindsight was barely clever and not smart.

mcnealy

I stayed away from investing in Hewlett-Packard during the imperial reign of Carly Fiorina. Her efforts to bludgeon the HP culture into acquiring Compaq left permanent scars. Her fights with the media, particularly the San Jose Mercury News, were undertaken without the prospect of an upside. She was forced to resign three years later as HP’s CEO. Last year, she ran and lost in her attempt to wrest a Senate seat away from Barbara Boxer in California. And today… (she just won’t simply go away), she is working with the GOP Senatorial Campaign Committee.

Another stock that had the effect of a crucifix to a vampire for me was Advanced Micro Devices or AMD under the notorious direction of Jerry Sanders. Brash and colorful, Jerry was the ultimate loose cannon beyond any kind of reasonable control by his PR handlers (probably too strong of a word). Jerry was going to say what Jerry was going to say.

There was the night that he concluded an annual Semiconductor Industry Association dinner with “We have come a long way since the days we were fighting the Japs (over trade access).” He is (mis)credited for inventing the term that “Real men have fabs,” prompting semiconductor makers without their own factories…or fabs…to establish their own trade association, the Fabless Semiconductor Association, now the Global Semiconductor Alliance.

And of course my all time favorite from Jerry: “Money is life’s report card.” Guess that means Mother Teresa really sucked at life.

When it comes to corporate excess, no one does it better than Larry Ellison of Oracle…The planes, the yachts, the mansions, the divorces…And how many people are unemployed in this country? How many are underwater on their mortgages? How many are afraid to open up their investment portfolios? Larry doesn’t need my money, but I have made a vow to never invest in Oracle regardless of the company’s financial results as long as Larry is in charge.

The bottom line is that C-Level behavior does matter. Some are willing to look the other way just as long as the company is doing well. And what happens when the sun starts sinking against the horizon and the stock heads south? The “Ballmer and Butthead” quotes aren’t so funny. As John Madden once said: “When you are winning no one can hurt you; when you are losing, no one can help you.”

http://www.edn.com/article/479110-Ballmer_Butthead_and_McNealy.php

http://www.cbronline.com/blogs/technology/best_mcnealy_qu

http://en.wikipedia.org/wiki/Scott_McNealy

http://en.wikipedia.org/wiki/Sun_Microsystems

http://en.wikipedia.org/wiki/Bill_Gates

http://content.usatoday.com/communities/onpolitics/post/2011/07/carly-fiorina-senate-republican-campaign-committee-nrsc/1

http://en.wikipedia.org/wiki/Jerry_Sanders_(businessman)

http://en.wikipedia.org/wiki/Larry_Ellison

http://www.youtube.com/watch?v=sAAirNeKWxQ

http://www.motherteresa.org/

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