Well today is the day. I am officially retired from Fairchild after 36 years and 9 months on the job. I have worked for Fairchild Camera and Instrument, Fairchild a Schlumberger Company, National Semiconductor and Fairchild Semiconductor. It’s been everything I was hoping for and more. By the way, I walked out the front door at 8:05am, exactly per the plan.
As I write this post, know that I am not a company spokesman but I wanted to leave you with a few observations of the industry based on my experiences and observations. These are in no particular order of importance:
1. Proprietary Technology: I miss the 1980’s. By far, that was the most exciting time of my career. Yes, yields and technology was unrefined by today’s standards but, unlike today, the process technologies we developed were proprietary. We had the FAST and FACT technologies that our competitors and our foundries didn’t have. Each had strengths and weaknesses relative our competition but this enabled us to work closely with our Sales and Marketing group to sell our product to our customer base. Today, internal fabs are viewed little different than external foundries. The opportunity to separate yourself from the pack is limited.
2. Moving Jobs Overseas: Semiconductor Assembly has been overseas since the 1960s but today many overseas wafer fab foundries exist that didn’t exist decades ago, and this has reduced the role and importance of internal fabs. Of course, foundries have helped to establish second source product supplies that protect our customers from delivery supply disruptions and have also kept the internal fabs from becoming complacent. But the internal fabs have lost control of the process know-how that they once had exclusive rights to.
I have logged over 1.4 million frequent flier miles and have met many great people from our plants overseas in Korea, China, Malaysia and the Philippines as well as the offices in Singapore and Furstenfeldbrook. They have taught me much about their different cultures and customs and I have developed a tremendous respect for all of it. I also know that the competitive pressures that have caused our company and others to send production overseas have equalized somewhat as foreign worker salaries have risen. I would like to see the day when manufacturing comes back to the US. I believe it will happen, if only the US, State and Local governments would make it more attractive for our companies to thrive here.
3. Aquisitions: Like so many companies today, Fairchild has grown by acquisitions over the years. Some of these have proven productive and a win-win for both parties, as it should be. Unfortunately some have proven to be a one-sided proposition where the acquired company was swallowed whole and many of their employees layed off. I don’t like this at all. It is just not right. It may be a business reality of today but it is something that I abhor.
4. The automotive industry: I really like the automotive market for so many reasons. The product life is substantially longer than what exists for cellphones or other consumer goods. The automotive customers, such as Bosch and Continental and Hyundai all have strong engineering cultures and I have very much enjoyed working with them. They are demanding, rightly so, and they expect zero delivered defects. This is as it must be. No one wants to drive a car that breaks down everyday. To do well in the business requires close cooperation between the semiconductor supplier and automotive customer, particularly in the design stage. Cost and quality pressures are high. The automotive customers want low cost products every bit as much as any other customer.
One big difference, however, lies in their safe launch requirements. Here, it is important that these safe launch controls be added and costed up front and that the quoted price for these new products include these costs. The temptation for the suppliers is to skimp on these safe launch controls in order to keep product prices the same as for non-automotive products. This would be a big mistake, however, as any quality related customer returns after the launch would result in the customer demanding yet added controls be installed after product release at the supplier’s costs. A better way is to fully load these safe launch controls up front, and later reduce these controls after one or several years as the data supports their removal.
5. Customer focus: This is the most important formula for success. Whatever we do, it is vitally important that we put ourselves in the customer’s shoes, look at the challenges they face as well as their development roadmap and desires and develop a supporting strategy that helps them becomes wildly successful. Today, we sell many products to the big customers such as Samsung and Apple but these companies have significantly more engineering resources than Fairchild does.
So they buy our product because we are a good supplier that offers good product at low prices. I would continue this business but I would focus on the lower tier customers, ones that don’t have the same level of engineering resources, and work with them to provide value by helping them redesign their bards to have a smaller footprint, cost less, and integrate more functions using fewer total devices. This is where I know Fairchild can win.
6. Cost saving: Cost pressures are everywhere, not just on Fairchild but our competitors as well. I am amazed at how much we have been able to improve productivity, reduce costs and operate more efficiently. Our Federal Government would do well to emulate the semiconductor industry in this respect. But all companies need to look at both sides of the profit equation; revenue/margin generation as well as cost management. Increasing revenue and margin requires a focused approach to understand what our customer’s current and future needs are and develop a strategy to supply value to them. This means selling them more than just a product but also solutions to their problems or opportunities.
7. Co-workers: Over 36 years, I have come to think of my co-workers as my family. I love them all. We fight just as siblings do but we also have fun and learn how to work together. I will always think of the Fairchild plant at 333 Western Avenue as my family and it is my sincere wish that they prosper indefinitely. My advice for OnSemi is to take the time to get to know and trust them and capitalize on their capabilities. Make it a win-win proposition.
8. Employee reviews: Like most companies, Fairchild has an annual review process. The format changes frequently and as much as I sometimes hated going through the process, I think they serve their purpose in maintaining contact between the boss and the employee. At the end of the day, what matters is that there is open communication between the employees and management and both sides listen to and work with each other for the betterment of all.
9. The Change Formula: 25 years ago, I had training on human dynamics and high performing work teams. It was a “touchy feely” time in the industry and one that brought management closer to the worker. At that time, I learned about the change formula which was as follows: C ~ f(D x V x S), or Change is a function of Dissatisfaction with the ways things are x Vision of a desired end state x the Steps to get there.
I have never forgotten that formula and have used it often because it works. Whenever I was frustrated with the way things were, I studied that equation and determined why the desired change was not happening. Perhaps people were not really dissatisfied with the way things are, or perhaps they lacked the vision of the desired end state, or perhaps they just didn’t know the steps to get there.
In closing, I want to wish the good people of Fairchild and, in particular the S Portland plant at 333 Western Avenue, much success in your future. I will be cheering for your success.