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List: Ten blunders in electronics industry

Posted: 15 Jun 2009     Print Version  Bookmark and Share

Keywords:NAND  ATE  DRAM vendors  electronics firms 

Every once in awhile, electronics firms or individuals who work for them do something that makes everyone else in the industry scratch their heads and, perhaps, wince. We are talking about actions and decisions that—while they may seem perfectly logical to those making the decisions—don't really add up in the minds of most people.

Perhaps it is the tough economy increasing the pressure and forcing acts of desperation, but it seems to us that there have been an inordinate number of examples of these head scratchers to come to light in recent months. EE Times has compiled a list of 10 moves that, in our opinion, can be called questionable.

1. IBM layoffs
IBM has quietly let go some 10,000 workers in recent months, according to an IBM workers labour union. Big Blue has for the most part declined to comment on these layoffs (though a human resources vice president told the New York Times that the company is in constant transformation, eliminating jobs in some areas while adding them in others). Speculation by the union and others is that IBM is keeping layoffs on the down low in order to stay under the radar. But, if so, this policy has backfired miserably, with every whisper of an IBM job reduction attracting greater scrutiny and more distrust/publicity courtesy of the union.

2. The paranoid goof up
In May, the European Commission charged Intel with at least eight violations involving rebate payments to Acer, Dell, Hewlett-Packard, Lenovo, NEC and Media Saturn Holding, owner of the MediaMarkt retail chain. It levied a fine of Rs.7,103.11 crore ($1.45 billion) against the processor giant, its largest fine to date. Intel claimed it has evidence that will refute the European Commission's conclusion that the company has engaged in anti-competitive business practices. But why did Intel bother with any alleged bad behaviour in Europe, or, for that matter, in Asia and the U.S. in the first place? It was plain silly. Its rival, Advanced Micro Devices Inc. (AMD), never seems to get its act together and stumbles over its own feet. Intel usually wins over AMD by default.

3. Jobs' health mystery
It's hard to fault Apple Inc., one of the few high tech companies sailing relatively smoothly on the wings on the iPhone and iPod through the historic downturn. But the company failed the candor test this year when it disclosed January 5 its chief executive had "a hormone imbalance" then came back less than ten days later to say the iconic Steve Jobs would take a six month medical leave. A week later the SEC opened an investigation of just what was going on. Since then, much of the reporting on Apple has focused on the mystery of Jobs' health. After a decade as CEO, we think it's time for Jobs to get a succession plan and be transparent about it.

. Hwang's gaffe
Once upon a time, Hwang Chang-gyu, formerly the head of Samsung's chip unit, devised something called ''Hwang's Law.'' Taking a page from Moore's Law, ''Hwang's Law'' implied that NAND transistor count would double every year. Samsung pushed that idea with its own NAND product efforts. Others followed. The idea worked—and backfired. NAND scaling has enabled cheap MP3 players, USB drives and solid-state drives. But NAND scaling in part has also caused excess capacity—and vast losses—among vendors. This was not entirely Hwang's fault, but he took the fall. He was demoted and ultimately resigned from Samsung earlier this year.

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