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Ex-CEO looks back at IDT hedge scuffle

Posted: 10 May 2016     Print Version  Bookmark and Share

Keywords:IDT  MaxLinear  activist investor  Starboard Value  semiconductor 

EE Times: Are you happy with the outcome at Entropic?

Tewksbury: Entropic pioneered MOCA (Multimedia over Coax Alliance) home networking standard and had connectivity technologies, but never made RF or analogue-front end products. MaxLinear, on the other hand, is a leading provider of integrated RF and mix-signal ICs. So this was really a good match with lots of synergy. Kishore [Seendripu, CEO of MaxLinear] has done a fantastic job at MaxLinear and executed the acquisition flawlessly.

EE Times: So, now you're on the MaxLinear board. You're also on the board of a company called Jariet Technologies. Who are they?

Tewksbury: [Jariet] is a startup spun off from Semtech. By using deep-submicron process such as 14nm FinFET, Jariet has technologies that take advantage of analogue performance to realise the lowest power, highest performing converters on the market. They'll be used in wireless back hauls, for example.

EE Times: Do you see yourself continuing to play a role as a consultant?

Tewksbury: I don't see consulting is a long-term job for me. I am looking for a more permanent job.

EE Times: Who do you consult for?

Tewksbury: I'm embarrassed to say, but my clients are more and more Chinese. A lot of private equity firms are popping up in China. There' a growing demand for consulting services. They ask us to identify leadership and possible acquisition targets in the United States.

EE Times: Why are you embarrassed?

Tewksbury: Because I'd rather be building the U.S. semiconductor industry. The U.S. chip industry has been running in the mode of an unprecedented number of consolidations today. Under pressure from investors with a short-term mindset, companies are finding themselves left with little time to innovate. It's worrisome.

As more U.S. chip vendors and their technologies are acquired by those overseas, we face two issues: security concerns and loss of competitiveness.

Semiconductor M&A activity

Figure 2: Source: Dealogic; McKinsey Analysis

EE Times: In contrast, how's China doing?

Tewksbury: Chinese chip companies have the government's strong backing. They're building a large ecosystem that includes everyone ranging from equipment vendors to growing customers in Asia. Higher education institutions like Tsinghua University are cranking out highly capable engineers. Lots of funding is available to chip vendors both from VCs and private equity firms. China has a big focus on semiconductors.

While we take our eyes off the ball, China is creating strategic value for its semiconductor business.

EE Times: You expressed your desire to run a company as a CEO. How's being a CEO different from being a board member?

Tewksbury: The CEO needs to be a visionary. He makes plans, puts in place goals and builds core competency at the company. The board of directors, on the other hand, isn't the source of ideas and values. Their responsibility is to guide and audit. Their role is much more passive.

However, the board is the heart and soul of the company. If it isn't aligned with the company, look what we went through at IDT, you'd get in trouble.

What really happened at IDT?

EE Times: It's been almost four years since you left IDT. Maybe it's about time you could tell us what really happened at IDT during the last 18 months you were there.

Tewksbury: So, we're turning the clock back to late 2011 to early 2012, right? I still remember the day in late 2011, when our CFO, who just returned from a conference, walked into my office. He looked pale. He said that we need to talk about Starboard.

I asked, 'Who's Starboard?'

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