CY, nice article here
<<Forbes.com
Mr. Rodgers' High-Tech Neighborhood
By David Einstein
For T.J. Rodgers, these are heady times. His company, Cypress Semiconductor, is enjoying record results as it churns out chips for the post-PC era. And he's stirring the pot again in Silicon Valley.
Rodgers, in case you don't know, is the outspoken chief executive whose distaste for political correctness has made him a lightning rod on hot-button issues that most industry leaders avoid the way a pianist ducks a tough Mozart concerto. He's taken on NASA, nuns and now the Rev. Jesse Jackson in his quest to uphold the honor of capitalism and free markets.
When Jackson came to the Valley last autumn, preaching diversity in the workforce and chiding tech companies for not employing enough black and Hispanic workers, Rodgers pounced on him like Stone Cold Steve Austin leaping off the top rope. He pointed out that minority representation in the area is in line with the number of minority workers qualified for high-tech jobs. If Jackson wants to raise the percentage of black workers in the valley--currently about 4%--Rodgers says he ought to focus on improving their education. Then they could be like the Asians, who hold 28% of the tech jobs in the valley.
``Jesse Jackson's value system is about as anathema to the basic core values of Silicon Valley as anybody's could be,'' says the clean-cut, 52-year-old Rodgers. ``We thrive on freedom and free markets, while he stands for decisions made by coercion and political power.''
The confrontation with the Rainbow Coalition man--which is ongoing at this point--is just the latest high-profile scuffle for Rodgers. In 1996 he mixed it up with a group of nuns who happened to own stock in Cypress (NYSE: CY - news). The Sisters of St. Francis in Philadelphia admonished Rodgers for not having a woman director. Most CEOs would rather move out of town than take on the church. But not Rodgers. He fired off a letter suggesting that the nuns' views were more politically correct than Christian. Cypress still doesn't have a woman on the board, which is chaired by 3Com (Nasdaq: COMS - news) CEO Eric Benhamou.
Rodgers also delights in hammering the government, in particular NASA. The space shuttle, he contends, is actually a flying pork barrel. ``Some shuttle experiments--at a cost of about $500 million each--are simply ludicrous. Who cares or will ever care if spiders spin their webs differently in zero gravity?'' he commented in a 1994 interview.
``One of my traits is that [I] really don't give too much of a damn about what people think as long as I think I'm doing things right,'' says Rodgers, adding that he has ``an extraordinary bias against political correctness'' and a deep-seated distrust of government.
Rodgers has implanted his doctrine of free will into the DNA of Cypress, where he impresses on his workers the virtues of generating wealth and the evil of government regulation. For a year-long period in the late 1990s, he conducted biweekly seminars on ``capitalism and freedom'' for executives and still holds informal Friday afternoon ``freedom seminars'' today for anyone who cares to attend.
The goal, he says, is to inculcate in people the notion that capitalism is right and moral and not just a way to make money. ``Wealth is important, and generating it is important,'' says Rodgers.
Rodgers practices what he preaches. San Jose, Calif.-based Cypress has done a remarkable job of changing gears to meet the needs of the new economy and as a result has climbed smartly out of a downturn that pummeled the entire chip industry from 1996 to 1998. In its first fiscal quarter, ended April 2, it posted record revenues of $264.2 million and net income of 41 cents per share, up from 9 cents in the same quarter a year ago.
Cypress' stock has mirrored its financial comeback. At its low point in the summer of 1998, it scraped $5.50. But since April 1999 it's risen steadily and today is trading at more than $50--giving the company a market value of $5.7 billion.
``We had some pretty ugly quarters, but we actually increased our research and development rather than cutting it, and we hung in there,'' says Rodgers, a Stanford-educated electrical engineer who founded Cypress in 1982.
The past year has been great for the entire semiconductor industry, so one has to wonder whether Cypress is riding high because the upturn has lifted all boats. Rodgers emphatically denies that and notes that Cypress is growing at twice the industry average.
Cypress has done particularly well in selling memory and other chips for cellular phones and other wireless equipment. In the first quarter, 78% of its revenues came from communications products, most of which didn't exist until two years ago. The company's customer list reads like a Who's Who of technology and includes Motorola (NYSE: MOT - news), Ericsson (Nasdaq: ERICY - news), Cisco Systems(Nasdaq: CSCO - news), Nortel (NYSE: NT - news) and Lucent Technologies (NYSE: LU - news).
Other fast-growing parts of Cypress' business are chips for clocks in PCs and other devices and chips for the Universal Serial Bus (USB) connections that are becoming standard on desktop and mobile computers. Cypress is No. 1 in both markets.
``The company has clearly done a good job in repositioning itself to take full advantage of what's going on in the marketplace,'' says Morgan Stanley Dean Witter analyst Mark Edelstone. ``They've really grown their communications focus and have some good leadership.''
Whenever a company pulls itself out of the doldrums, the CEO usually gets some credit, and Cypress is no exception. But in Rodgers' case, what he hasn't done may be as important as what he has. In the past, he was accused of running the company with too heavy a hand. Now, say some analysts, he's backed off and become more open to delegating authority and creating semi-autonomous divisions along the lines of Hewlett-Packard (NYSE: HWP - news).
``He's not micromanaging,'' says analyst Richard Whittington of Banc of America Securities. ``He's spending a lot less time with internal management and a lot more on external issues such as customer relationships and strategic marketing. That's the role you want your smartest guy to perform, and T.J. has to be one of the smartest guys in the Valley.``
The smartest and the most controversial. Welcome to Mr. Rodgers' neighborhood>>
from forbes.com |
