SEOUL — When Ted Tewksbury suddenly retired as CEO of Integrated Device Technology (IDT) seven weeks ago, neither Tewksbury nor the company explained what happened, or why.
Further, after IDT hastily replaced Tewksbury -- on an interim basis -- with board member Jeffrey McCreary, formerly of Texas Instruments, McCreary has not talked to the media about what comes next at IDT under new management.
That silence, however, was broken last week in Seoul when McCreary showed up as a keynote speaker at the Analog Semiconductor Leaders' Forum, sponsored by Korea's specialty foundry, Dongbu HiTek.
In an interview with EE Times, McCreary revealed that Tewksbury's resignation was engineered by the company's board, which had been dealing for months with a "noisy" shareholder unhappy with IDT's "cheap stocks." The board's priority, said McCreary, is to make IDT's business "nicely and consistently profitable." The board also insists on IDT being "more judicious about where it puts the money" among a host of R&D projects IDT had undertaken over the years.
IDT's workforce is in the midst of adjusting to their interim chief, whose style is very different from that of Tewksbury, a veteran analog-engineer-turned-CEO who kept a low profile but remained firm and methodical in IDT's makeover from digital to analog and mixed signal since 2008. By contrast, McCreary, who spent 25 years of his career at TI, is a gregarious and outspoken engineer-turned-sales-guy, whose last job at TI was global chief marketing officer and chief sales officer.
IDT interim CEO Jeff McCreary
McCreary doesn't know how long his CEO stint at IDT will last. Asked about the future, McCreary said he informed the board of his interest in making his title permanent. The board is doing a CEO search and hasn't revealed its deadline.
McCreary said, "The board needs to do its job -- fully. If they decide to choose someone else, that's fine. I know that a business decision is never personal. I can go back to being on a board at IDT again."
Path to the future
McCreary noted that IDT needs to create "a path" to improve its operating margin, possibly to 20 percent. Although he declined to give detailed figures, due to the quiet period the company is in, the public record shows that IDT's operating margin for the full year in 2012 was 8.03 percent. In contrast, TI's operating margin during the same period was 18.89 percent.
McCreary also said IDT needs to "contain its appetite" for R&D projects. Noting that IDT invests more than $100 million in R&D, roughly 25 percent of the company's sales, McCreary said, "That's still quite a bit. But we need to deliver results."
Under Tewksbury's leadership, IDT had been making efforts to bring more focus to its business. Earlier this year, the company sold its smart energy product line to Atmel. IDT also divested its PCI Express enterprise flash controller business to PMC-Sierra for approximately $96 million in cash.
Obviously, from the board's point of view, that wasn't enough. "We are looking for more pieces like those that don't make sense to our business," said McCreary. Such a process, however, requires "surgical" precision, he added.
What remains the same
"What remains the same at IDT," said McCreary, are three product categories that "include timing, memory interface and serial switch." IDT has consistently thrived in these three areas, reportedly holding the leading market position in each.
Roughly speaking, 50 percent of IDT's revenue today comes from its claim-to-fame timing products; 30 percent from memory interfaces, critical to keep the speed up for registers and buffers between DRAM and servers; and 20 percent from serial switches, key to communication networks, according to McCreary.
IDT expects both timing and memory interface product categories to grow at 5 to 8 percent -- the semiconductor market average. Meanwhile, it predicts the serial switch segment to exceed the market's growth average. Sitting in a box between a radio card and digital card, IDT's serial switch products do everything from converting signals to compression and packet management, explained McCreary. "Every 4G base station needs this, and the 4G network is still growing."