Daniel Artusi's decision late last month to leave Motorola's semiconductor products sector (SPS), where he was in charge of the networking and computing systems group, raises a bigger question: what kind of companies will best weather the downturn?

Artusi was highly regarded by Motorola. On top of his technical depth he brought energy and positive thinking. This was not a man just mouthing company marketing slogans. Artusi really believed that Motorola had great products in the networking space. He has the kind of can-do mentality that every organization needs.

In going to Silicon Laboratories as chief operating officer, Artusi joins a well-regarded but small semiconductor company that needs to broaden a narrow product line. That is a tough agenda during a period of consolidation in the communications IC market.

Austin, Texas, is a city that has plenty of talented working engineers, but a lack of management talent. Many of the semiconductor startups here have thrown over their CEOs this year, and hired veteran managers from IBM, Motorola and other big companies.

Whether these older managers from large companies have the energy and mindset to lead small startups is a big question here in Austin, which has been hit hard by the downturn of 2001.

Motorola SPS needs to fix a basic problem that bothered Artusi deeply. The Motorola mobile phone operation, based in Illinois, demands and gets very favorable pricing from Motorola's wireless IC division, based in Austin. The internal transfer pricing is below cost, according to SPS managers here, which makes it difficult for SPS to regain profitability within the three-year deadline laid down recently by Schaumberg.

This reminds me of a husband blaming his spouse for the family's financial plight. It poisons the whole house. If conflicts over serving the internal customer or the outside customer are cramping sales to the larger merchant market, then the choice is clear: spin out the semiconductor division.

Moreover, in an era where foundries offer an alternative, systems companies probably do not enjoy manufacturing cost benefits from having an in-house chip division.

Artusi's departure from Motorola may point to important competitive advantages for faster-moving small companies that are independent of in-house systems divisions, with the ability to rely on foundries for manufacturing.

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