With the impending close of Microchip's $840 million acquisition of Micrel, Ray Zinn, Micrel's CEO for the past 37 years, looks to a future that includes mentoring high-tech U.S. startups.
Ray Zinn’s remarkable 37-year tenure as chairman, president and CEO of analog chip vendor Micrel Inc. may be drawing to a close, but the 77-year old semiconductor industry pioneer sounds as though he has no intention of riding off into the sunset.
”My most productive years are still ahead of me,” Zinn said in a recent interview with EE Times, adding that the 52 years of semiconductor industry experience on his resume carry a lot of value.
Zinn co-founded Micrel in 1978 after some 15 years with chip companies including Fairchild Semiconductor Corp., Nortek Inc., Teledyne Inc. and others. Zinn, whose career achievements include pioneering the lithography wafer stepper and being awarded more than 20 patents, eventually lead Micrel’s IPO in 1994. Remarkably, the company turned a profit in 36 of the 37 years Zinn was at the helm.
In May, Microchip Inc. announced it would acquire Micrel for roughly $840 million. After clearing antitrust regulatory review last month, that acquisition is expected to close sometime in the third quarter of this year. With the acquisition, Zinn is stepping aside to focus on other projects.
Ray Zinn, CEO, Micrel
Zinn’s plan for the immediate future is to mentor Silicon Valley startups, lending his rich leadership and entrepreneurial experience to the next-generation of technology firms. He has written a book, titled “Tough Things First,” detailing his experience and insights running a high-tech company for nearly four decades. The book is available for pre-order on Amazon.com and elsewhere.
He said he has already been approached by about 20 companies looking to benefit from his experience.
“I’m not going to go away,” Zinn said. “I’m not going to just ride off into the sunset.”
Zinn insists that his impetus for writing the book and serving as a mentor to Silicon Valley companies has no financial motive. Rather, he says, he wants to help U.S. startups succeed. “I don’t care if I make a dime on this book,” Zinn said. “I just want to get the message out about how to run a good company.”
Part of Zinn’s philosophy is that today’s chip companies and tech companies in general are far too focused on short term results, a by-product he acknowledges stems largely from Wall Street’s influence.
Prior to the dot com meltdown in the early 2000s, about 60-65% of all chips were consumed in the U.S. and Europe, Zinn said. But now, the opposite is true, he says, with roughly 60-65% being consumed in the Asia-Pacific region, where lower labor costs and other factories enables electronic products to be built more cheaply. This focus on cost, rather than innovation, is detrimental to the semiconductor industry’s long-term health, Zinn believes.
The future of the semiconductor industry “doesn’t look so good” as long as there remains a “tenacious focus on cost rather than innovation,” Zinn said.
Among other things, Zinn is a vocal advocate of keeping semiconductor manufacturing alive in the U.S. and, in particular, the Silicon Valley. Micrel’s chip fab in San Jose, Calif., is among the last remaining in the Silicon Valley. He blames California and Santa Clary Country policies that he says do not foster manufacturing as well as a lack of federal government focus on protecting high-tech industry in the U.S.
”The government is more focused on social programs than strengthening our economy,” Zinn says. Meanwhile, foreign countries such as China, India and South Korea are focused on technology self-sufficient and ramping up their semiconductor manufacturing capabilities.
Zinn is proud of many of Micrel’s achievements during his tenure, including its impressive record of profitability. He boasts that he and the company have weathered all manner of semiconductor industry cycles.
One thing that is taking place now that Zinn says is unprecedented in the industry’s history is the massive wave of consolidation that includes pending deals like Avago’s acquisition of Broadcom, NXP’s acquisition of Freescale, Cypress’s acquisition of Spansion and Microchip’s acquisition of Micrel, among others. While the semiconductor industry has always been an industry of very intensive M&A activity, what is happening now is taking it to a whole new level, Zinn said.
The acquisition activity is being driven by Wall Street, Zinn believes. Chip companies are under pressure to grow revenue at levels that they cannot achieve organically. Acquisition is the only way they can reach their revenue growth goals, he said.
“The industry is going to a place I’ve never seen before,” Zinn said.
—Dylan McGrath covers the semiconductor and related industries for EE Times.