News & Analysis
Comment
peter.clarke
ibm221
Steve Appleton in retrospect
Peter Clarke
2/3/2012 6:34 PM EST
Micron versus Korea
In the late 1990s, as in the 1980s, accusations of DRAM dumping were being made, but this time against South Korean chip companies. Korean DRAM maker Hyundai, which became Hynix, faced bankruptcy and Appleton was vociferous in his condemnation of moves to support Hynix and other South Korean companies.
In February 1998 Appleton accused the Korean government of already violating the conditions of the bailout package to the country provided by the International Monetary Fund. He told a House Banking Committee hearing: "We should not send tax dollars to Korea to brace up insolvent companies, on the one hand, while turning a blind eye to their export surge strategies that are harming U.S. companies, on the other." Appleton added: "If these were companies operating in the United States, they would have two choices – bankruptcy or undertake a massive belt tightening by cutting capital spending and bringing output back into line with current demand."
In December 2001, after another difficult year for DRAM, Micron agreed to acquire the commodity DRAM business of Toshiba, including the company's Dominion Semiconductor LLC manufacturing facility in Manassas,Virginia. . At the same time Hynix and Micron announced the companies had agreed to hold preliminary discussions to explore a possible strategic alliance or "other transaction."
In February 2002 the deal was proving difficult to make with leaks from Hynix to the Korean press that the company's debtors wanted $4.8 billion while Appleton who had started with an offer of around $2 billion had only been prepared to go to $3.8 billion. At the time Hynix owed about $6.5 billion in debt.
Despite what may have been attempts to force his hand Appleton signed a non-binding agreement to buy Hynix memory operations for $3.2 billion in stock and a $200-million cash investment for 15 percent of Hynix non-memory activities. Almost immediately, at the beginning of May 2002 the deal fell through.
As we now know the deal, which could have been a defining moment in Appleton's career, never happened and in the end Hynix' debt was converted into equity by the banks, a legacy which in part hangs over the company to this day.
Meanwhile, the rocky DRAM road continued to take its toll and in 2003 the company announced the intention to lay off roughly 1,800 workers, or 10 percent of its workforce, in a bid to return to profitability in the unforgiving world of commodity PC memory.
Intel, which to help it sell PC processors needed DRAMs for in package cache memory, was the savior of Micron. Intel invested $450 million in Micron in September 2003 to help it expand 300-mm wafer production and DDR2 production.
In July 2004, Appleton's love of adrenalin-fueled activities caught up with him when his stunt plane crashed in the desert east of Boise. Appleton was injured in that incident but managed to get away with an injured back, cuts and bruises. One other passenger, Micron employee Michael Duffy, was reported to have injuries of a "similar severity" at the time.
Next: Rambus and flash
In the late 1990s, as in the 1980s, accusations of DRAM dumping were being made, but this time against South Korean chip companies. Korean DRAM maker Hyundai, which became Hynix, faced bankruptcy and Appleton was vociferous in his condemnation of moves to support Hynix and other South Korean companies.
In February 1998 Appleton accused the Korean government of already violating the conditions of the bailout package to the country provided by the International Monetary Fund. He told a House Banking Committee hearing: "We should not send tax dollars to Korea to brace up insolvent companies, on the one hand, while turning a blind eye to their export surge strategies that are harming U.S. companies, on the other." Appleton added: "If these were companies operating in the United States, they would have two choices – bankruptcy or undertake a massive belt tightening by cutting capital spending and bringing output back into line with current demand."
In December 2001, after another difficult year for DRAM, Micron agreed to acquire the commodity DRAM business of Toshiba, including the company's Dominion Semiconductor LLC manufacturing facility in Manassas,Virginia. . At the same time Hynix and Micron announced the companies had agreed to hold preliminary discussions to explore a possible strategic alliance or "other transaction."
In February 2002 the deal was proving difficult to make with leaks from Hynix to the Korean press that the company's debtors wanted $4.8 billion while Appleton who had started with an offer of around $2 billion had only been prepared to go to $3.8 billion. At the time Hynix owed about $6.5 billion in debt.
Despite what may have been attempts to force his hand Appleton signed a non-binding agreement to buy Hynix memory operations for $3.2 billion in stock and a $200-million cash investment for 15 percent of Hynix non-memory activities. Almost immediately, at the beginning of May 2002 the deal fell through.
As we now know the deal, which could have been a defining moment in Appleton's career, never happened and in the end Hynix' debt was converted into equity by the banks, a legacy which in part hangs over the company to this day.
Meanwhile, the rocky DRAM road continued to take its toll and in 2003 the company announced the intention to lay off roughly 1,800 workers, or 10 percent of its workforce, in a bid to return to profitability in the unforgiving world of commodity PC memory.
Intel, which to help it sell PC processors needed DRAMs for in package cache memory, was the savior of Micron. Intel invested $450 million in Micron in September 2003 to help it expand 300-mm wafer production and DDR2 production.
In July 2004, Appleton's love of adrenalin-fueled activities caught up with him when his stunt plane crashed in the desert east of Boise. Appleton was injured in that incident but managed to get away with an injured back, cuts and bruises. One other passenger, Micron employee Michael Duffy, was reported to have injuries of a "similar severity" at the time.
Next: Rambus and flash
|
|
|
|
|
Navigate to related information
dylan.mcgrath
2/3/2012 7:23 PM EST
It's not possible to encapsulate the life of a man in two pages, but as far as Appleton's career in the semiconductor business, this hits the highs and lows as well as it possibly could. It's a very sad day for the chip industry.
Sign in to Reply
peter.clarke
2/4/2012 6:18 AM EST
Some postings in the forum thread below have been taken down. The EE Times forum encourages debate and freedom of speech but it is not the place for personal attacks leveled at people in the news, or against other contributors.
Sign in to Reply
Ketchikan
2/3/2012 8:22 PM EST
"Intel invested $450 million in Micron in September 2003 to help it expand 300-mm wafer production and DDR2 production"
The above statement is false. Intel invested nearly $500 million in Micron for the sole reason of ramping the production of RDRAM which the DRAM price fixing cartel (comprised of Micron, Infineon, Hynix & Samsung) purposely boycotted with the (successful) objective of driving RDRAM out of the DRAM market completely.
Steve Appleton was a fierce enemy of US innovation as he was spearheading a global conspiracy to steal Rambus' foundational IP and destroy it as an on going concern.
Steve Appleton led a global conspiracy aimed at the destruction of Rambus and the pure IP/NPE business model, using legal, financial and political tools to wage brutal persecution upon Rambus.
myself, as many others I believe are not shedding tears upon his departure...
Sign in to Reply
webserver227
2/3/2012 9:04 PM EST
You said it right. Appleton shut down the RDRAM dram production after buying the Toshiba dram plant that was making good quality high volume RDRAM to shut down the lifeblood of Rambus's RDRAM volumes when during the early part of ramping up RDRAM for Intel's P4 RDRAM CPU products. It was shown at Antittrust trial but 9 Jurors ignored the evidence. Lawyer Price used the US job scare to help them win that case. He said Micron goes Banrupt in 2 months if they are found guilty and Rambus lose still be OK since they are collect licenses from many dram makers for sdram and ddr products. That scare the shit out of these Jurors in SF. Micron cannot compete witn samsung anyway so in the next few years, what will happen to Micron? I think EK is a good example of where Micron is headed. If you disagree, you must have a brain size smaller than a pea.
Sign in to Reply
webserver227
2/3/2012 8:42 PM EST
Micron hated Hynix but in 2000-2001 wanted to buy Hynix because they want to kill Rambus. Antitrust court records shown that clearly. Hynix was forgiven y the FTC for dumping charges when CEO of Micron met secretly with Hyix CEO and the next few days or months they filed lawsuits from coast to coast to litigate Rambus to death. Can people see such simple truths or keep on denying these thieves criminal acts? Why do you hate Rambus for inventing dram inventions Jedec copied? Dont forget in 1992, when Rambus showed their inventions to these companies, nobody believd it would work or their inventions would work so how the hell they stole these ideas from Jedec? You ask yourself, how? Nobody believed those ideas would work. The industry just hated Rambus because they invented something they need but don't want to pay for a license for it. It is that simple. I believe if someone invented something of value, either you pay for it or not use it in your products. Rambus was never allow to present at jedec meetings deliberately by Jedec.
Sign in to Reply
webserver227
2/3/2012 8:56 PM EST
We have to be honest. Pay for inventions if you use them in your products. is that so hard to do? or just leave it out. is that hard to ask?
Just like buying an undervalue house fixing it up and sell it for a much higher profit. Is that wrong? Even a troll deserves to be rewarded for their abilities to find valuable patents from other inventors who sold them. It is the same thing as buying a cheap painting from a flea market and later found out it is worth millions. Nothing wrong with selling something of value to others. This is capitalism at work. If you don't want to pay for inventions then just leave it out. What so difficult about that? If you have to use that inventions, this just proves these inventions aare significant. Is that hard for engineers to understand? So, please don't bash any inventors asking for a license. It is their inventions that companies to stealing.
Sign in to Reply
webserver227
2/3/2012 9:05 PM EST
Where's everybody? Am I the only poster here? Common, let's talk. I guess most people are too busy. This is a problem for humanity. We need time for life not time to work and make ends meet.
Sign in to Reply
nosubject
2/4/2012 12:41 AM EST
http://www.aolnews.com/2010/06/06/cautionary-tale-a-killing-in-the-stock-market/
RIP
Sign in to Reply
peter.clarke
2/4/2012 6:17 AM EST
Some postings in the above forum have been taken down. The EE Times forum encourages debate and freedom of speech but it is not the place for personal attacks leveled at people in the news or against other contributors.
Sign in to Reply
hughbetcha
2/5/2012 1:09 PM EST
If there was ever any reality behind theory of "dumping semiconductors" it had all but been transformed into a political charade by the time Micron started picking on the Koreans in the mid '90s.
I debated the dumping issue with Steve a number of times in person, on the phone and by email. He would acknowledge that the ultimate goal was to raise prices, not protect U.S. strategic interests.
Regardless of our differences, he was always polite and professional. may he rest in peace.
Sign in to Reply
webserver227
2/6/2012 2:45 PM EST
The lesson here is daring adventures could lead to shorter lifespan. Some people can this Karma but I called it chance of death. Just like committing a crime,a robber will get caught sooner or later if they keep on committing a crime.
This is why we learned from Confucius to be a righteous man standing up with pride instead of the lowly man who has lack of respect.
Ming.
Sign in to Reply
Code Monkey
2/7/2012 10:08 AM EST
Aside from Confucious getting lost in translation, Appleton took his chances and paid the price. There are other high profile pilots (such as John Travolta and David Gilmour) who fly safely and grow old. The first rule of doing something dangerous is "Don't screw up". If you can't guarantee that, don't do it.
Sign in to Reply
webserver227
2/6/2012 4:02 PM EST
In the movies, the coward guy normally runs to the cops for plea agreement for immunity. That is exactly what Appleton did after the doj investigated priing fixing charges during the time when Intel was transitioning to RDRAM for an amestry agreement and no Micron employees went to jail.
Sign in to Reply
chipchap42
2/6/2012 5:37 PM EST
Nice piece Peter. As you say, Steve played a sometimes poor hand of cards well. As a pilot myself, I also am very sorry to see that cause his death. Yes, those who never take risks may have a longer lifespan, but ultimately what's the point of life unless you make something of it.
RIP Steve.
Sign in to Reply
KB3001
2/7/2012 5:48 AM EST
Well said chipchap42. RIP Steve.
Sign in to Reply
John.McVey
2/7/2012 6:44 PM EST
It saddens me for so many of these comments to be focused on the RDRAM situation. There is so much more to the Steve Appleton story. There are few CEO's that are so approachable, so generous to their communities, and willing to forego salary during hard times. He will be missed.
Sign in to Reply
selinz
2/7/2012 7:48 PM EST
Well, as an "outsider" at the same JEDEC meetings that RAMBUS was banned from, the description from webserver227 above is quite different from the many companies attending. These included Micron, ATI, Hynix, Infineon, Intel, and many others. I don't want to badmouth Rambus, other than to say that there are two sides to the story.
Sign in to Reply
selinz
2/7/2012 7:53 PM EST
WRT Steve Appleton, he led a truly unique company. They had (I'm a bit out of touch with recent activity) a lot of internal R&D and didn't hesitate to develop their own solutions. In fact, in some areas with which I was familiar, they had some predatory IP of their own. I think you'll find that any large and successful (as judged by relative longevity) company will tend to be that way.
Sign in to Reply
Jonathan Davis
2/7/2012 8:08 PM EST
The Semiconductor Industry Has Lost a Hero -- my reflections:
http://www.semi.org/en/node/40691?id=highlights
Sign in to Reply
peter.clarke
2/16/2012 5:37 AM EST
Hi Jonathon
That's a nice piece remembering the man.
Sign in to Reply
ibm221
2/8/2012 7:26 PM EST
folks , it' s time to adopt some religion.
Steve put all his energy and hope in airplanes (20+), it's insane and unhealthy.
he didn't have a full life as he claimed as well, consider his 4 kids left behind...
Sign in to Reply