November 14, 2016
RB: Hello. This is Robert Blair, host of Silicon Genesis at Stanford Libraries. Today is November 14, 2016 and we are at the home of John Dickson, a veteran of the semiconductor industry and a native of the United Kingdom. John, like many of the semiconductor pioneers, began his story outside the United States and was attracted to Silicon Valley startup culture. He holds an electrical engineering degree from Sheffield University in the United Kingdom. He has held multiple roles in product development, general management, and chief executive officer positions of large semiconductor companies during his career. Like many of the semiconductor leaders, John has retired only to reengage in a new role and utilize his experience to move technology forward. John has served on multiple boards and currently serves on the board of KLA-Tencor in his second retirement, a semiconductor industry equipment maker. Let’s now hear from John Dickson and his humble story from Sheffield, United Kingdom to his semiconductor industry CEO career.
RB: Today is November 14, 2016 and we’re at the home of John Dickson, a veteran semiconductor industry executive with roots in the UK and France and an extensive career in the United States. Hello, John. Thank you for joining us today -
JD: Hello Bob.
RB: - and contributing to Silicon Genesis at Stanford. We are going to talk about your experience in the semiconductor industry over about four decades or so. You and I are both Brits by origin and we’ve ended up here in Silicon Valley like a lot of other people, which, as we both know, is the founding place of the planar silicon transistor which famously changed the world. So let’s start at the beginning if I may. Tell us a little bit about where you were born, what your parents were doing professionally, and a little bit about your childhood hobbies as you grew up and approached the university years.
JD: Yeah. So I was born in Sheffield in the north of England, in Yorkshire in 1946. Went to school there. Grew up there. My father was a fireman, became the chief fire officer for South Yorkshire or whatever it was in those days. And my mother was a parent at home. I have one brother who is three years older than me. He went in a totally different direction. But I guess that’s just the way of families. They just follow different routes and, you know.
RB: And what did you do when you were at school, John? What were your hobbies? Were you an artist or wanted to be an engineer? You fixed cars or -
JD: No, no, I – no, no, I – we – my brother and I worked a lot on motorcycles and bikes. My father would turn his hand to anything. He could build houses, build engines, strip cars down, decorate, wire houses. So he had us do a lot of that. So we were very involved. In those days, you probably remember changing the oil in the car meant draining it out, getting one of your mother’s stockings and then draining it through it again to get the muck out and pouring it back in again into the engine and re-cutting tires and retreading tires and all those things that happened in post war UK. So we were very involved in those sort of things really.
RB: So you have a very practical home life?
JD: Yeah, I think so by definition almost, yeah.
RB: Okay. So what triggered you, John, to do electrical engineering? Was it largely based on that kind of environment at home or what your dad suggested or you somehow -?
JD: No, not really. It’s probably the latter. I went to, as you know, Bob, coming from the UK, in those days, each child in the UK went through a standard test at the age of 11, the 11+. And if you passed, you went to a grammar school and if you didn’t, you left school at 15 or whatever and went to work. I passed. In fact, I was the only child in a year of 90 children in Sheffield in that particular school that passed the 11+, which doesn’t I think make me a genius. It meant the school was pretty awful and most of the kids didn’t get a fair shake. But I did pass. I went to a grammar school and did pretty well in all subjects. And, again, as you probably remember at the age of 15 or 16 in the UK, you had to choose between science or arts for your final two years at school. And I just chose almost by random science – mathematics, physics, chemistry, and the like. And then when it came to what’s next after school – after leaving school – I asked my father what he thought and he said there will always be jobs for engineers. Why don’t you do engineering? There was no such thing as career guidance or university guidance at the school I went to. It was just, you know, thank you very much and goodbye. And so I signed up for electronic engineering which my father thought would be the best opportunity, then went to Sheffield University to do that. So it wasn’t – I don’t think I’m one of these people who, from the age of four or five, was designing electronics or doing this, that, and the other. It was more what will work for you. Where will the income come from? Where will the jobs be? So guided by my father I guess but very loosely.
RB: Certainly that 11+ examination was a divisive event in our school careers. And I went through the same thing obviously. And so that’s interesting.
JD: Yes, and particularly as my brother failed the 11+. So he went a different route and went into the steel industry in Sheffield at the age of 15, which seems almost barbaric these days but it’s what it was, wasn’t it, in the nineteen sixties.
RB: Well it turned out to be the capital of the steel industry.
RB: Sheffield Steel is or was the headquarters. So you graduated with honors in ’66. And so now you have a quality degree, you got to find a job. What did you do with degree in hand? Write some letters? Make some phone calls?
JD: Well I guess you – you remember it as well but each university had its own sort of careers guidance place and you’d go up to them and sit through the library and pull all the brochures out for GEC, for STC, for God knows who else. And I guess, in those days, it was pretty easy to get a job. I think I had about five offers to choose from and I finally settled for Plessey – Plessey Telecommunications down in Nottingham as a graduate trainee, you know, a two-year graduate trainee type deal. There was very little training at Plessey. I think they were more interested in how many graduates they got than what they did with them. And so I started off in the transmission division working on transmission lines, 1.3 megahertz, which is just nothing these days but was pretty exciting in then. Did that for a couple of years but it really wasn’t – didn’t feel very, very satisfactory at all. It felt – I often used to think at that age – I left university at 20, so at the age of 22, I thought, God, I’ve got another 43 years of this sort of stuff and that’s not really – doesn’t feel like the right thing to do. So I started reading various magazines and saw an article in Management Today on Texas Instruments. And it was a very flattering article and looked very exciting. So I wrote to them and asked if they had any jobs and I got a job there. So that was 1969
RB: So that was in Bedford?
JD: Bedford, yes.
RB: So you sort of cast a vote in favor of the American direction already at that age, TI being a U.S. company versus the British establishment, Plessey and GEC.
JD: Yes. Well I can’t comment on GEC or AEI or STC or any of those names. But the sense that I had working in Nottingham – there were probably about 5,000 employees on site, which was a big location in those days in the UK – it felt like it was in the 1920s. You know, it’s a very old factory and dark and gloomy.
RB: With the dark green walls.
JD: Exactly. All that sort of stuff. Yes, yes, yes. Big cafeteria, status conscious, directors’ cafeteria, executive’s cafeteria, you know, the peasants cafeteria, all that – you know all that sort of stuff.
RB: Yeah, yeah.
JD: And TI, just based on this article – which I probably still have somewhere – just seemed a really different sort of place and every photo had somebody who looked a bit like me, the same sort of age. And it felt like an interesting industry to be in. So I wrote and went down there and it was phenomenal really in comparison. Nice cafeterias. Beautiful, shiny manufacturing floors, lots and lots of people in their mid-thirties or early thirties and it just felt very dynamic. And the other thing about it I guess – when I did my degree at Sheffield, we probably only did about 40 hours on semiconductor theory. It was all valves or vacuum tubes as they call it over here. And I remember the lecturer saying, you know, there are two types of transistor. One’s PNP, one’s NPN. You’ll never see anybody using NPNs and that was the end of that. Then I get to TI and I’m surrounded by the damn things, you know, there’s millions of them. And I just struck me how far behind – maybe in the UK, maybe not in the U.S. – but how far behind the universities were in semiconductors with respect to people like Fairchild or TI or whatever. So it was just a very, very different, dynamic environment. There’s a sense you could do anything you wanted to do.
RB: Yeah, that was the sense I got, too. And, you know, you went to TI. I went to Fairchild. But, I mean, it was the same concept of moving to the American culture, semiconductor culture, rather than the old British establishment.
JD: Exactly, yes. Much more open.
RB: So what job got your attention at TI? What did you do when you first got there?
JD: My first job was a manufacturing supervisor and I was in charge of 16 young women.
RB: That’s a nice start.
JD: Yes, yes, all Italian. Bedford, as you probably know, is a very Italian town. So we had all these Italian young ladies and it was a VHF/UHF transistor assembly line. So I started off doing that. And it was just a – I mean, the shock of moving from a UK company to something like TI was traumatic. I remember the first thing I did at Plessey every morning was read the newspaper at the desk, you know, for ten minutes, fifteen minutes or whatever. And I did that for the first few days at TI until it was very, very obvious that that’s not what you do when you start work. And it was just different. It was – I learned a lot about supervising people. Learned a lot about technology, about management. So I did that for a while. I then picked up the test area for VHF/UHF. Then I picked up the frontend fabs, wafer fabs. So I had the whole front to back deal for VHF/UHF. The fabs in those days were one inch diameter for the products we were making – they were one inch diameter, one and a half inch diameter. From there, I went into planning and moved into integrated circuits, which were TTL in those days and 74N series. Then I went down to Nice to the European headquarters, worked there for a while in semiconductors and then moved across to the calculator division, which was then maybe about a $200 million business I guess, selling calculators – TI calculators, which then became the consumer division. And I worked there for Eckhard Pfeiffer who ultimately became the CEO of Compaq.
RB: I remember the name, yes.
JD: Yes, he became CEO of Compaq. So that was pretty good. It was good to get the experience of a consumer product rather than these little black things and all that sort of stuff. And then I was offered the job of managing TI Plymouth, which was a factory in Plymouth in England, and went back to the UK to do that. And, I mean, that was different again. We produced about 9 million ICs a month and about 25 million diodes a month which is hard to imagine what people do with all these things. And it was, again, a very tremendous learning exercise as technologies developed and all that we did there. And I remember back in maybe ’79, 1980, my boss in Europe was a guy called Robb Wilmot, who I know you know
RB: I know Rob well, yeah.
JD: And he called me up one day and said, what are you going to do with all your people next year? And I said, you know, what do you mean what am I going to do with all my people next year? And he said, well they won’t have any jobs next year. And Rob always came at things sort of crab wise – and it turned out what he thought would happen was that gate arrays would replace discrete logic, which it did as you know, but maybe took twenty years to do that, not twelve months. But that was the transition point from discrete logic I guess to gate arrays and whatever. And then I moved back up to Bedford to run all the bipolar business, which strangely included CMOS gate arrays. But it did include gate arrays. And, again, that was – if you think back to those days, the – I think the biggest gate array we had was maybe 2,000 gates and the volume was 400 gates. And it’s just staggering how this industry has moved on to billions.
RB: Yes, those were in the three micron days not the seven nano days. [laughter]
JD: You could see – yes.
RB: So you were at TI for fifteen years or so.
JD: ’69 to ’83.
RB: Yeah, so you had a long run there and covered a lot of ground in two countries.
JD: Yes, yes.
RB: So you obviously enjoyed it. Robb Wilmot, of course, was with ICL. And then I believe after TI, you actually moved to ICL.
JD: Yes, I went to ICL in ’83. ICL was the national champion computer company in the UK, probably about four billion dollars of revenue then making mainframes all the way down to PCs and systems and whatever. And Robb had been asked by the UK government to save the company. The company was just about bankrupt. So they hired Robb out of TI as CEO. He brought in Peter Bonfield from TI from the U.S. Peter was running the calculator division of IT. And I joined about a year later. And I started out running the purchasing department at ICL. And Robb had changed the strategy rather dramatically when he joined the company. ICL made everything itself. Made its own semiconductors. It made its own disc drives, made its own printers, made its own tape drives or whatever as I guess most guys did in those days. Robb had decided that the value add of that was zero and what he should really look is the systems capability and we’d outsource all the other sort of stuff, which we did very rapidly and dramatically. So the purchasing division became, in itself, a sourcing for just about everything except the basic design of whatever it was we did. So we were there to set up relationships with CDC, with Fujitsu, with Siemens, with Hitachi, or whatever, for their technology that we could embed. It was quite an interesting job. I never, ever thought I’d be in a purchasing department but it was very interesting to do that. And then I gradually got more and in the end I was the COO of ICL, running all the development and the government relations, manufacturing & logistics, and all that sort of stuff. So it was a fun time. And ICL, in those days, really led the charge on open systems. We don’t even think about open systems anymore. But if you think back to the early eighties, all the interfaces between CPUs and printers and disc drives were all closed. IBM wouldn’t let anybody have any access to the code of the interfaces so you could only attach IBM gear to IBM boxes. And ICL really took a lead in changing that, both in Europe itself, and the U.S. And, in fact, we saw at the time documents – internal documents – from IBM saying this company’s doing something rather different here and leading this sort of charge in open systems. And it worked. I mean, it’s where we are today.
RB: Do you think that was Wilmot’s vision?
RB: So he spotted that and made the move?
JD: Yes. I think – I mean, this is not about Robb Wilmot but Robb, for me, is one of the most far-sighted guys in the industry. What he didn’t do was to get the timing right. It was like the gate array thing that he thought would displace TTL logic in a matter of months or quarters or whatever. That never happened. But he got the point to gate arrays right. The whole microprocessor business, the open systems architecture, all of those things. Robb’s just very, very good at that sort of stuff. So yes, that was an exciting time, very exciting.
RB: Yeah, I remember, you know, a few years later he was a customer of LSI, of course, in the CMOS gate array era. Okay, so you were at ICL for not that long, just to -
JD: ’83 to ’90 – yes, the end of ’90 so seven years, eight years.
RB: Yeah, seven or eight years, yeah, okay. And then after that, I think you actually made a physical move to the U.S.
JD: Yes, I did. I did.
RB: So how did that happen? I mean, that’s a bigger move than just going to France.
JD: Well it’s – a lot of things happened which you were party to I think at the time. We decided at ICL that we weren’t big enough to survive and prosper. And we decided that probably in the – maybe in the 1980s. So we started to talk to just about every other computer company in Europe about getting together. So we talked to Nixdorf, we talked to Olivetti, we talked to Bull we talked to Philips, we talked to Nokia, we talked to Norsk Data, you know it, all these guys have disappeared and gone somewhere else. And their view was we agree with your long term view of what’s going to happen but we think we’ll beat you to that point. So we have no interest. So we finally turned to Fujitsu who we’d had a deep relationship with in terms of the semiconductors we used and the disc drives in particular, and asked them if they would have any interest in investing in the company. And, as you probably know, Fujitsu was the mainframe architecture – I mean, an IBM architecture mainframe company. So they said they would invest and then – which was maybe, I don’t know, twenty, thirty percent investment, but then they decided that they couldn’t get whatever benefit they needed from such a low investment. So they took their investment up to eighty percent, which, in effect, meant they owned the company. And while I agreed with the strategy, I just – I had worked with Fujitsu for seven or eight years or whatever and I just – the thoughts of flying out to Tokyo once a month and presenting to, you know, a room full of Japanese executives who either simulate sleep or pretend to sleep or whatever – and presenting our case and having a very different rhythm, I thought no. Perhaps that’s not the right place to be. And I had met your old boss and my boss to be, Wilf Corrigan. We used to have vendor conferences which you know very well and Wilf, although always the CEOs are invited, very few CEOs of suppliers attend those meetings as I think you would agree. Wilf was different. I think he was different because he was always coming to Wimbledon at the time of the vendor conference. But he came to the vendor conference. And I think I got to know Wilf reasonably well and he’d said maybe a year before I left ICL, if ever you want to come to the U.S., give me a call. So I called him and he said sure, sure. I’ve got the company called Headland Technologies in California. How about coming to manage Headland? And he described it. And he said it’s sort of break even and it needs some help and all that sort of stuff, so why don’t you come do that? So that’s how I came to be here.
RB: So that was around 1991, ’92-ish?
JD: I came in January ’91.
RB: January ’91, okay. Okay. I think we just did overlap there for a little while. Then I left and I think in ’92 or -
JD: You and I left at the same time I think.
RB: Yeah, yeah, okay. Okay. But you didn’t stay that long.
JD: Well, I mean, I do – and I say this to Wilf when I see him – I never quite understood which dictionary he used because the description of this company just being on the edge of profitability was – the edge we were hovering was not what it was. I mean, you know I think, the company was losing a ton of money and had lots of execution problems. And then even worse than that, I think Wilf viewed it as a – when he had capacity in the LSI fabs – he viewed Headland as a fab filler. When he had real customers for LSI, he threw us out. So the whole manufacturing strategy of Headland was totally tactical which in semiconductors you can’t do. You maybe can do it in assembly and tests but you can’t do that in fabs. So we were -
RB: You were borrowing on the good will of the gate array business.
JD: Yeah, we were neither fish nor fowl. And then it was very, very tough business. Memory control and graphics chips. So, at some point, Wilf decided it should be rolled into LSI, back into the parent, which was fine. I was quite happy with that. But then I think I got on the wrong side of Wilf, which, as you know, quite a few people do at some point. I often think Wilf is like the old electrostatic experiment we did at school where two balls gradually get closer, then do this. And I think Wilf is – in the end, he said, you need to find a job somewhere else and you can stay out at Headland as long as you want. And then a couple weeks later his wonderful HR guy said Wilf wants to know why you’re still here. You know, so, you know how those -
RB: Yep, that sounds like my story too.
JD: [laughter] Yes. So I’d been interviewing with three venture guys who were invested in Shographics which was a 3-D graphics company. There’s Sequoia, Alpha – Alpha Ventures and one other. I forget now. It was the company that made very high performance 3-D graphics cards. And it was meant to be a sort of competitor to something like Silicon Graphics using X terminals and PEX terminals which, again, have disappeared long ago. When we actually got the – the graphics would work but the concept of trying to sell to the national labs, car designers, weather people, whatever else, where they had these huge throbbing disc drives under each engineers desks and whatever, trying to sell them the concept that this was a client server concept and they wouldn’t have any disc drives under the desk and yet they were doing all this fancy graphics. The thing just didn’t work out and we ran out of money. Sequoia pulled the plug. So we went into bankruptcy which was a good exercise, I think a good learning exercise and went through all of that. And then once that was done, I was looking around for other things to do and ended up interviewing with AT&T for their microelectronics organization based in Pennsylvania and New Jersey and got the job of running that.
RB: So that was a big shift. I mean, you went through the real startup cycle, including going bankrupt and dealing with VCs pulling plugs and, as you say, good experience. Then you flipped back to the big company again essentially and across the country. But you didn’t go back to the UK.
JD: No, no. No, no, no. No, no, no. It would be obvious to say, I think, that technology is here isn’t it. This is the heartland, whether it’s on the East Coast or West Coast or whatever. Principally West Coast. But it’s here and we were enjoying the U.S. And the thing that I liked about AT&T, I went out there on interview and it’s just an amazingly expensive organization. I mean, just all the wonders of monopoly. And the business, the microelectronics business then was $1.3 billion of revenue and it was losing money. And I asked the guy who I would work for when I was running that business how they were going to make it profitable and his view was that they needed to grow it. They needed to grow the revenue. One point three billion was not enough to make money. And I’d come just from a VC backed company where the VC investors would be saying, you know, a hundred million dollars, you should be profitable. You should be generating positive cash flow and you should be out on your own. And here’s this $1.3 billion beast that’s losing money and needs to grow more. So that seemed like an obvious there’s stuff to be done here. And then in the interview process, the buildings. Every executive had his own bathroom. The building that I was interviewed in had its own art curator so there were murals on the wall and all this sort of stuff. And you think there’s a way here to make money. You know, this is not really hard stuff. So they offered me the job and I went over there and more of the money aspect – the waste of money is just very, very evident. I’m still here in Saratoga, received a call from my then to be secretary saying what sort of car would you like. Every officer at AT&T gets a company car. It has to be American and it can’t be a Corvette. So it has to be a four-door, has to be American. And I thought well this is California, this is New Jersey. There’s snow and ice and all that sort of stuff so I said I’d like a Jeep, you know, a Grand Cherokee or whatever. And she said what color would you like? And I said a blue one. She came the next day and she said they don’t do blue ones. And I said well I think they do. I’d just been down to Keily or Keely or whatever it was in those days and I said there’s three or four blue ones on the lot. She disappeared again and came back again in a matter of hours. She said the problem is blue was a ’93 color. It’s discontinued in ’94 but we’ll paint the car blue if you want, if you’d like the new car. And I said you’d paint a new car, brand new car a different color if I want it that way? She said absolutely. That’s what we do. And that’s, I mean, just example after example of just costs piled up that we pay for in our telephone bill. So it just -
RB: That’s amazing.
JD: Yes, yes, yes..
RB: So when you went in there, John, did you go in with enough clout to actually make some tough decisions?
JD: Oh I think so.
RB: Did you go in as CEO of that division with the charter to make it happen?
JD: Yeah. Well the beauty of microelectronics and AT&T was that, I mean, Bell Labs, AT&T invented the transistor so they invented the business. But it was a small business in what was maybe a hundred billion dollar corporation. So you get the freedom of not being important to the rest of the company, you know, network systems and all of – long lines and all of those wonderful things. So yes, there was a lot of freedom actually. And the unit was in everything. It was in static RAMS. It was in D-RAMS. It was in microprocessors. It was in the logic. It was in gate arrays. You name it, it had everything. And because of the wonders of the lobbying system, it had – when I got there, it didn’t have that many factories but they would build factories to please senators or congressmen. So every state had an AT&T factory in it. I mean, it just makes all sort of sense. If you’re a monopoly, you need to keep on the right side of elected power. So there was a tremendous amount of waste that could be taken out and shut down fairly quickly. So we did that. We got out of the memory business, got out of a lot of the sort of bits and pieces type business and focused in communications, which is where their expertise was and is. And the business grew but eighty percent of our revenues were to AT&T, the parent, the systems division, and only twenty percent externally. So we were always handicapped when we went to talk to people like Cisco or Ericsson or Nokia or whatever because they believed that whatever IP they had in dealing with us, we would somehow transfer it back through the microelectronics business to -
RB: To the systems people.
JD: To the systems company which didn’t happen actually. I mean, they had no interest and I guess they wouldn’t have been able to – being rather arrogant as AT&T and Bell Labs were, they probably never would have thought it was worthwhile looking at the IP anyway. But it was a barrier so we started – and one of the reasons I guess I went there – I thought that at some point it could be spun out of the parents as an independent company. But before we got there, the company, AT&T, had decided to spin out all of its manufacturing, its hardware businesses which was network systems which was a wireless business, switching business, the transmission business, ourselves, the IP business, which became Lucent Technologies in 1996. And we in the micro business tried to persuade the head of Lucent to let us go on our own at the same time but he said no, you know, the business is software and silicon and so we need to go forward. So we made – didn’t make a big difference to us but it still left us trapped with having a parent that was taking our products and customers who thought maybe we were transferring the IP. So I guess by about 2000 we’d – when Lucent was starting to struggle a little bit then. I mean, Lucent grew at a phenomenal rate when it was free from AT&T. And, at one point, its market cap was bigger than AT&T and AT&T wanted discounts on products because of that and there was all sorts of different tensions. But it became clear that Lucent wasn’t going to be a long term growth engine and needed to realign what it was doing. So we decided to spin out the component business which then was the semiconductor business and the optics business which then was about six billion dollars of revenue. And that would be in 2000. And in ’93, it had been $1.3 billion revenue. So we’d grown the business pretty successfully. So we decided to spin out. Announced that in 2000. Intel came along and tried to buy the business which, as it happened, they were lucky they didn’t, given the write down they would have taken later. But everybody was keen to get into optical electronics in those days and communications. But we spun it out. Unfortunately we spun out in the teeth of the recession. You know, the market collapsed in 2001. The IPO initially was sized at an offering price of eighteen bucks. But after about three weeks of road shows, it was clear we weren’t going to move the business at eighteen bucks. So we finally settled on a price of six dollars and we just about completed the IPO before everything just fell apart. You know, Nortel started announcing earnings warnings and all these various things that went on. It was the second largest technology IPO in history at that time. We raised three billion dollars and got the company separated. But then the market truly collapsed and was a, I mean, just a stunning example I think – the optical electronic business which had been two billion dollars at the IPO within a year was two hundred million dollars. I mean, the customers just went.
RB: Yeah, there’s a number of companies in the valley here I think that saw dramatic, I mean, dramatic drops in -
JD: All these stories about the internet doubling every twenty seconds and all this sort of stuff and we’ll never have enough fiber in the ground. And I guess there’s still dark fiber in the ground from 2001 now. So then we were in – Lucent had passed down. We raised three billion dollars. Lucent passed two billion dollars of debt down to us which left us a billion dollars of cash. But the rate at which the revenue collapsed, we ran out of cash pretty quickly. So we were very close to bankruptcy for maybe a year, year and a half, two years. And the banks being the happy people they are, always want their money back when you need it. But we got through that and stabilized the business. We shut down the optics business which in itself, particularly in the states I guess, but the litigious nature of the states being what it is, we had a lot of advice saying that would be a disaster to do that because you did the IPO on the basis that you have optics and you have ICs and you’re going to get together and now you’re going to close this business down. But we did it anyway. So it became an IC business. And we got it to profitability, cash flow positive. And that was it really. I left in or I retired in 2005 without my – I guess it would be just a little bit short of sixty which is I guess what I’d always wanted to do and moved on. And the company merged with our old alma mater, LSI Logic a couple years later.
RB: With LSI eventually. So you avoided going back to the ranch [laughter] by a couple of years.
JD: Yes, yes. But the funny thing of all that is that one of the companies I joined the board of was Avago. And Avago ultimately bought LSI Logic so it ultimately bought Agere Systems. So the whole thing is one big -
RB: It’s an interesting circle.
JD: Yes, yes, yes, it is. It is.
RB: This time you were outside looking in.
JD: Yes, yes.
RB: So it’s interesting.
JD: So that’s it.
RB: So that was an interesting series of events from large company to startup to large company to retirement. But you didn’t stop there. I mean, like a lot of us I think, you know, we retire and then we get a little bit bored and what are we going to do next kind of thing. So after you retired from there, did you play some golf? And what got you back into - ?
JD: No, I’ve never been a golfer. I guess I thought about it in the days when I was at TI’s headquarters in Nice. But we were driven by Dallas. I guess like all multinational companies, you’re driven by the time scale of the headquarters and we’d go into work in Nice at eight and we’d be there every night until eight or nine or whatever because Dallas was still online. And I got two young kids then and I’d go home and maybe they’d be awake, maybe they wouldn’t and all that sort of stuff. And I thought briefly about golf and I thought, you know, if all I’m going to do is do this in the week and then I disappear Saturday morning for a whole day or whatever, that’s just no. So I never got into the golf thing. I went on a few boards. I thought that’d be interesting – National Semiconductor, Freescale, a Swiss company called Mettler Toledo, Avago. And I was happy retired. And then in 2008, a friend of mine who worked at Lucent with me – he’d left Lucent and gone to run BT in the UK, Ben Verwaayen. He’d always had a hankering to run Lucent. And when Lucent was in its troubles after I’d left Lucent, he’d gone to the board and said I think I can do a better job as CEO and the board had said thank you and good night and, you know, we’ll talk to you when we talk to you. So he sort of carried this cross for Lucent. And after a few years at BT, Lucent had merged with Alcatel to form Alcatel. Lucent headquartered in Paris and that was in trouble yet again. And they asked Ben to go and be CEO. So he was vindicated and happy and he asked me to come and do some consulting for him. And the consulting was interview all of my top management team and tell me what they think, what’s happening, which was a very, very interesting experience. The CEO gives you carte blanche to talk to anyone you want to talk to and they know that, then the executives are very – it’s a very interesting play of communications and power. So I did that for a couple of months. And then, at the end of that, he said would you come and join me? And I said no, no, I’m done. I’m retired. I’m in California and that’s the end of it. And so that was that. And then he continued strangely to send me presentations that he was reviewing in the business and saying what do you think of this, what do you think of that? And that went on for a few years, couple of years. And then finally in 2010, he fired his head of operations, worldwide operations and said would you come and run operations for me? And I said no. And he said, well how about coming and doing it for a month or whatever. And it’s in Paris and Denise and I like Paris. And so we said we’d do that. I mean, it’s the sort of thing you couldn’t do in the U.S. You couldn’t hire a VP of operations for a month and not disclose it as a, you know, an 8k or whatever. So I did that. And he said we’ll extend it as you see fit. And I did it for two years. And it was -
RB: So you physically moved back to Paris for a couple of years?
JD: Yes, yes, we lived in Paris for two years. So I had the worldwide operations of Alcatel-Lucent, which was interesting in many, many ways. The company had tens of thousands too many people. It had never ever rationalized a product line between Alcatel and Lucent. So they had maybe five different switches for exchange, different wireless systems and all this sort of stuff. They’d never reconciled the IT systems, Oracle, SAP, God knows what other. And it had this joint venture which you probably dealt with in your time. Alcatel Shanghai Bell which was part of my remit. So it was just – in many, many ways, it was the sort of thing that I think most executives would like to do. I had no career imperative. And if I didn’t like what I was being told to do, I could leave at the drop of a hat or whatever, live in Paris, which is rather nice, and do lots of stuff. So that was really very enjoyable. Working with the Communist Party in China because the Shanghai Bell joint venture was with the Chinese government so we had a board of directors that had senior communist party members and they have a very different outlook on life to what we have. We wanted to reduce the – what the factory did which was a very inefficient but very, very large factory. And we just could not shed people. And, you know, you think about the UK, you can’t lay off people. You think about France, you can’t lay off people. Think about U.S., you can lay off people. You think about China that you thought you could lay off people but no. And I asked the chairman – I always remember saying how are you measured? You know, how does SASAC, which is a communist party organization, how do they measure you? And it’s – the most important item is civilian stability. After that, it’s revenue. And after that it’s profit. The first one is civil stability so the very idea of laying people off and having people in the streets is an end of career thing. It’s a no-no. But we had to manage this and find a way to solve all. So it was just interesting. A nice – sort of things that stretch your brain a little bit and are different but interesting. But that – I finished that in 2012 and I’m retired again.
RB: And back here in California?
RB: So this is home now?
JD: Yes, yes.
RB: For the moment.
JD: Yes, for the moment.
RB: Okay. So where do you think the semiconductor industry’s at today, John? I mean, the big guys are getting bigger. There’s a lot of consolidation going on big time. You know, Intel’s acquiring big companies even these days. Where do you see it going now? I mean, we’re down to seven nanometer device sizes and the iPhone is a powerful computer in itself. First of all, what would you suggest to a thirty year old that wants to be in the semiconductor business today and where do you think it’s going?
JD: I think that’s a very, very good question. I guess if a thirty year old said to me he wants to be in the semiconductor industry, I’d say go somewhere else really. I think it’s -
RB: Why would that be?
JD: Because I think it’s become a grind. I think when you and I started and when a lot of the people you’ve talked to started, it was an industry with an infinite horizon and there were things that we learned and did that no one had ever done before. You could make an impact developing devices or whatever, it was expensive then but it was not prohibitive which it is now. There’s been a massive consolidation of intellectual property, systems on a chip, change the world, I think. The industry has become a systems industry. Costs a hundred million dollars to develop a chip and how many customers are you going to have out there? And I think the whole Moore’s Law, learning curve or whatever is definitely – is coming perhaps not to an end but it’s coming to an excruciatingly expensive point in its life. I’m on the board of KLA-Tencor which has eighty percent of the metrology business in fabs. And it’s just, you know, the average price of the equipments we sell are twenty million bucks. And if we could get forty million bucks for them, we would do. And we’re finding defects that are just beyond – I mean, we just get – you know very well at this stage we’re getting down to single atoms and all these various things. So I think the industry is slowing. The learning curve reminds me back in TI days and I’m sure you’ll empathize with this. TI was a deeply devout believer in the learning curve and we had to lower prices. Customers didn’t ask us, didn’t have to ask us to lower prices – we had to lower prices each year because the company believed that if you lower prices, you got more volume and you accelerated the learning curve.
RB: Which was true for decades.
JD: It was absolutely true for decades. And we would go to customers and lower prices without them even asking for it. And I remember the transition from that. We had locked door meetings saying should we put the prices up? Should, you know, we dominate the market? There’s no reason why we couldn’t put the prices up. But there was this tremendous fear that if Dallas – the headquarters found out that we were stepping off the learning curve, you’d be fired. I mean, it was a dismissal offense. And, in those days, as you said, the learning curve – you could touch it, you could feel it, you could see the benefits. But a lot of that has gone. And now we’ve got this consolidation which I think is – people have been talking about, as you know, for twenty or thirty years, that it’s going to happen and it didn’t happen. But in the last two years, it’s massive. I mean, it’s – was on the board of Avago when Avago was just a spinout from Agilent Technologies which, in turn, was a spinout from HP and look where it is now. You know, it’s a sixteen billion dollar a year revenue company. And the way that Hock Tan manages it, which I think is the right way to manage it, is to say all of this stuff that people have done for years in the semiconductor business is just wasting money. It’s a slow growth industry. We need to get the cash and profit out in the business and focus on where we can make forty percent operating margins which you and I, I think, never saw in our day. If it’s five percent operating margin you’d be in good shape. So I think its glory days are behind it. I mean, it’s still deeply fundamental to everything that goes on now. And as you mentioned the iPhone – there’s more computing power in the iPhone than all the nations put together in World War II. You carry that in your pocket. I mean, how stunning is that?
RB: Yeah. It’s just unbelievable. Yeah, it’s unbelievable.
JD: I mean, I remember when I was at ICL and in purchasing in those days, and this was buying disc drives on an OEM basis, we planned on thirteen dollars a megabyte. It was a good price to buy – to embed in our computers or whatever. Seagate I saw in the quarterly report just a few weeks ago, the average disc drive size is 1.7 terabytes and they sell those for 150 bucks. Well if you price that at $13 a megabyte, each disc drive that now sells for 150 would cost you twenty-two million dollars. I mean, it’s stunning. Beyond belief.
RB: By the way, a terabyte down at Fry’s Electronics is eighty bucks, not 150.
JD: Really? Okay.
RB: I mean, the numbers are staggering, staggering. And, you know, talk about change the world. I mean, it has. Just going back a little bit, John, back in the UK days, I read that you were awarded the medal for the (?) UK industry which is not trivial. Tell us a little bit about that.
JD: One of the things that I guess I’ve done a lot with in terms of factories is the efficiency of factories and particularly in cycle time and how you manage the flow through a factory. I guess I’ve always had a belief that it’s something that would deliver tremendous advantage to customers, that if you can spin a factory very, very quickly, then you don’t need inventory and you can be very responsive to whatever the customers want. And increasingly, customers were forcing all of us, I think, whether you were a systems company or a semiconductor company, and I’m sure you remember this, to very, very, very short lead times. I remember in Agere when we were servicing Nokia when we had the DSP in their phones, they talked very glibly about giving us one day, 24-hour lead time. And if you think about the manufacturing processes, if you have a conventional – well we put it in one end and it comes out of the other, you just can’t service customers with that sort of belief. So I just pushed and pushed and pushed on how we could make our factories much, much more effective in terms of spinning, very quickly moving stuff through. And we realigned all of our factories and we got to do that. We had maybe – when I was at ICL – maybe twenty turns of inventory a year, which was very, very fast for a systems company building mainframes. And we did the same, unbelievably I think, with the joint venture in China with ASB and it just – I think it was something that had not been done in the UK. Factories are factories are factories and they’re dark and they’re gloomy and, you know, you put stuff in and maybe it comes out, maybe it doesn’t. Maybe it works and maybe it doesn’t. And the press picked up on that sort of stuff and the IEE, the Institution of Electrical Engineers, had this Mensforth medal. They had two awards a year, one for UK National, and one for somebody from anywhere else in the world. And that’s the reason I got the – because the factories were voted best in Britain. Course there aren’t that many factories left in Britain or here either for that matter these days. But it was important then.
RB: That’s really interesting. And you stay in touch with Robb Wilmot?
JD: Yes. Robb’s here. He lives up in gold country. He’s retired but still has his finger in lots of various pies.
RB: It’s a while since I talked to him but yeah, very interesting guy. Very interesting guy. So with four decades moving around the world, John, from chips to systems to chips to systems, if you had to do it again, what do you think you missed and what would you do differently fundamentally or were you very, very happy with that career path?
JD: No, I’m really – I’ve got a lot to be thankful and grateful for for the career path. I think the one thing that I would do, and this applies to decision making in businesses, I think most people, myself included, always take too long to make decisions. I think very often the decision path is obvious but for all sorts of different reasons people hedge, fudge, delay, want more information, so on, so forth. And I think if there’s one thing I’ve learned is to trust your intuition and judgements and go with imperfect information and execute, you know, as best you can. So that would be a lesson. But, I mean, if I were to go back to 19 whenever it was, 1966 when I left university, I’d follow the same path if it was the same environment, yeah, I’d do the same thing again in a heartbeat I think.
RB: Okay. Well that’s good. I mean, there are guys that did chemistry that wish they’d done law and there are lawyers that wish they’d done chemistry.
RB: So that’s interesting. Okay. With kids coming out of school today, I mean, it’s difficult to know what to do. I mean, with social media and the rise of software, manufacturing guys and chip guys are, you know, not like they used to be. I mean, if your son was – daughter – was coming out of college now in early twenties, which sort of direction would you point them in career wise at ten thousand feet?
JD: Yeah, I’m not sure I would point them in a particular direction. I do think the old adage that you need to get the best education you can and then you have a platform still applies and let them work it out from there. You know, I got grandkids and one’s nineteen and struggling with what he wants to do. And I’ve got others coming up and through – I think the key thing is just to accumulate as much knowledge as you can and then the choices become wider. But kids never do that, do they, Bob?
RB: No, no. I mean, we all have our own recollections of how we got channeled into what we do. Sometimes it was because your dad insisted. Sometimes it was because you liked it. Others because you didn’t know what else to do.
RB: And there’s cases of that all around us.
JD: I’m not sure it’s any tougher for these kids than it was for us. I think we talk a lot about how much tougher it is but I think, in some ways, we make it tougher for kids these days.
RB: Back in the early days, you know, when our generation needed to know something, I mean, it wasn’t easy to find it out.
JD: Yes, you had to work.
RB: I mean, there was an encyclopedia Britannica if you had one. There was the newspaper which didn’t have much. There was the news which, you know, didn’t have a lot. I mean, today you just Google something and unbelievable what information you got access to today to help you.
JD: Yeah. There’s nothing that you don’t need to know these days.
JD: Which is fantastic but is, in some ways I think, quite debilitating because it takes away that need to work it out and to find and learn tasks -
RB: It’s almost too easy today.
RB: Yeah, yeah. I mean, the mobile – I mean, the smart phone today is a weakness in many aspects of things.
JD: But we’re talking like old men, Bob. That’s the problem.
RB: Well we are. [laughter] So there’s a new generation already in place behind us. Anything else you’d like to go back on, John? Are you -?
JD: No, I’m fine. Thank you. Appreciate your time.
RB: Well listen, thank you very much for inviting us.
JD: It’s a pleasure.
RB: And this interview will be published on the Stanford University Library website for everybody to see from now until forever. And thank you, John.
JD: Yes. Thank you. Thanks, Bob. Thank you.
[End of Interview with John Dickson – November 14, 2016 – Silicon Genesis]