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National Semi CEO joins 'green revolution'

Posted: 12 Sep 2008 ?? ?Print Version ?Bookmark and Share

Keywords:green trend? automotive? analog IC? solar?

Brian Halla rides trends vigorously. In late 1990s, when General Motors Corp. launched its oversized off-road vehicle Hummer, Brian Halla, chairman and CEO of National Semiconductor Inc., has snapped up one of the $50,000-plus gas-guzzlers.

The vehicle was huge, and Halla's choice of a dazzling sunshine yellow could be easily seen in the parking lot from the window of his office on the aptly named Semiconductor Drive in Santa Clara, California.

The Hummer was a certified gas-hog and a rabid environmental pollutant, but it was the rage and with crude oil selling for only $10 per barrel at the time Halla and other enthusiasts proudly drove their Hummers to work and around town.

At National, all kinds of experimentations in new markets were also going on. The company acquired a bunch of companies as it expanded none-analog business and explored opportunities in digital ICs, as well as mixed-signal products. Its acquisitions in late 1990s were Cyrix Corp., a marketer of x-86 software-compatible PC microprocessor, and Algorex Inc., vendor of high-performance DSP products.

National's annual revenues then were in the range from $2 billion to $2.5 billion slightly ahead of today's fiscal running rate.

The changing times
That was before. The landscape has changed dramatically in the last five years in National. At the corporate level, Halla presides over an improved company he has driven in a different direction over the last five or more years, sharpening its focus on analog ICs and abandoning several new product lines as the company redefined its core business.

On a personal note, Halla follows his heart although he too is not averse to changes. National Semiconductor's boss continues to drive his Hummer even as crude oil prices have skyrocketed since 2000 to touch almost $150 per barrel this summer.

Halla's yellow Hummer is gone, and is replaced by a newer vehicle of the same brand. Now, he has a blue car. He also has a Lexus sedan and has ordered the electric Tesla Roadster, which reportedly has 25 National Semi ICs in its power electronics module, according to the spokeswoman for the company. "Celebrities, according to Halla jokes, are leapfrogging him in line," she said.

Swerving to new direction
Bumping out National from its new focus won't be as easy.

The company has evolved from the multiproduct IC vendor Halla joined in May 1996 from LSI Logic and that evolutionary process continues today, moving the company sharply back into analog ICs and into the direction of the hottest and fastest-growing segments of the high-tech industry.

In its fiscal year ended May 25, 2008, more than 98 percent of National's revenue of $1.9 billion came from analog sales compared with 71 percent eight years ago.

The company closed the latest fiscal year with two operating divisions such as power management and signal path against three, namely analog, information appliance and network products in fiscal 2000.

Better market focus
Today, National under Halla is directing more resources toward energy and power management products, wireless communications, healthcare, security, sensing and detection, all the segments that show promise of rapid growth and areas where consumers and corporations increasingly use to show awareness in costs and public responsibility.

As skyrocketing crude oil prices lopped off interest in Detroit's big and heavy gas-consuming vehicles and as high-tech companies and other industrial enterprises became more concerned about green issues such as energy use, environmental footprint and alternate energy, semiconductor companies and technology OEMs have similarly shifted gear to recognize and embrace this trend.

Paradigm shift
No other company has been more insistent in moving in this direction than National under Halla who said several "new megatrends" are driving the high-tech sector and wants to position his company to participate in and benefit from the shifting business paradigm. Halla called the new repositioning of his company as National 3.0.

"We're a clear leader according to the Semiconductor Industry Association World Semiconductor Trade Stattistics and others in the area of power management," Halla said during a conference call on the company's recent fiscal 2009 Q1 results. "Being a provider in power efficient circuits and a world hurtling toward a global energy crisis gives us a unique opportunity to help solve the pressing problems," he added.

Halla's contribution
Many in the IC industry consider Halla as fascinating and a colorful character whose decades of experience in the industry are remarkable especially with regard to his regular pontifications in the direction of the industry.

He is also aware that observers monitor his comments about the industry and unabashedly seizes any opportunity to pump up National's image.

"National is somewhat of an industry bellwether or industry proxy that can hopefully shed some light on where we are in the cycle and how close we are to the next upturn," Halla said during the latest meeting with analysts. "Without going into detail, there's some cool stuff on the horizon," he added.

Top priorities
Other high-tech executives have similarly and exhaustively outlined similar views of where they believe the industry is heading. Power management is a concern and so are alternate energy products including solar as well as security, sensing and detection.

But while other executives can cite these fledgling product areas, Halla somehow makes them seem fascinatingly new even as he hints National was a leader in these sectors, a case that might be difficult to make without his trademark bravado.

"With an eye toward tomorrow's demanding growth drives, we focus our company to attach these new markets and provide the early solutions driven by these new megatrends," he said.

National's shares fell sharply after it announced Q1 fiscal 09 results that trailed expectations and said Q2 revenue would be within the range from $470 million to $480 million, below analysts' average estimate of $485.6 million.

"We do expect a seasonal uptick in billed activity in our customer base," said Lewis Chew, chief financial officer, National. "How much of an increase is really the question of the day. At this time, we are assuming a modest increase that is probably slightly less than what you might consider to be normal seasonality," he added.

"The slump would only be temporal," said Halla. Once the company's investments and focus on power management and other energy efficient and environmental friendly products heat up, "National should be on the rise again," he added.

"That's because customers expect companies to offer products that not only are compelling, but which also address current concerns," he asserted.

Forward movement
"What National 3.0 is all about is recognizing that whether we like it or not the ordinary consumers measure our industry by what we've done for them lately," Halla said.

"What have you really done to reduce my health care costs?" he added. "What have you done to increase my security given the world the way it is made. So National is all about recognizing new megatrends that are merging that will drive volume in the nontraditional markets."

Halla does know how to ride hot trends. However, can he turn the trendy products into huge profits for National?

That's the question analyst and investors will be asking the National's boss in the succeeding meetings.

- Bolaji Ojo
EE Times

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