Cisco wants to see wafer-processing time cut from 10 to 12 down to six to eight weeks, said Richard Ellis, director of global commodity supplier management at Cisco. And the company wants memory makers to make as standard parts content addressable memories (CAMs) that better meet Cisco's needs, he said at a forum on memory technology hosted by Semico Research here Thursday (Nov. 14).

The full court press comes at a time when Cisco is cutting its supplier base from a whopping 1,350 companies in 2000 to about 600 companies by the end of fiscal 2003. "That's still a mind-boggling number, but it's a significant improvement from where we have been," said Ellis.

Raising the stakes, Cisco plans to spend as much as 85 percent of its dollars with a shortlist of preferred suppliers by the end of 2003. Today Cisco deals with 32 memory suppliers, a number it says will be cut to a handful. The vendor consolidation comes in the wake of Cisco's being saddled with $2 billion in inventory when the dot-com bubble burst.

"We think the biggest problem this industry faces is too much material in the pipeline, and we don't want to go there again. If we can work this out, it will make a historic Harvard Business School case," Ellis said.

Semiconductors will never be bought on demand like PCs or routers, where buyers expect delivery within days if not hours. However, forecasting errors can be slashed if fab cycle times drop to six weeks, said Ellis. The Sun Microsystems Inc. veteran joined Cisco two months ago.

Ellis said the 300-mm Tricenti fab he visited in Japan recently now has a six-week wafer-processing time. Samsung executives in Korea briefed him on their plan to reduce cycle times, too, he added.

The Cisco executive is also working with large memory companies to take on the design of CAMs that more closely meet Cisco's requirements. Currently, more than 90 percent of Cisco's CAMs are based on a so-called CAM2 internal design, with two other follow-on in-house designs in the works at Cisco.

Ellis has suggested memory makers purchase a fledgling CAM startup to gain the engineering expertise to design such products with input from Cisco's own engineers. "There is a lot of interest with Micron and Samsung in taking on collaborative engineering like this and taking in CAMs as more of a standard part," Ellis said.

Cisco estimates about 21 percent of its memory purchases are for CAMs, a figure that could translate into as many as 30 million units a year. However, Ellis said he expects it could take three to five years to hammer out a CAM collaboration.

Such a design partnership is just one example of many Ellis would like to foster as part of a plan to increase communications between Cisco and its suppliers. "How you bring together your internal and external engineering and the resulting decisions you make will determine your success," he said.