Crossing the Cultural Divide, Part 1

Editor’s Note: this is the first part of a two-part series. Here is the second part of Cross the Cultural Divide.

For Japan, Penetrating U.S. and Global Markets Means Making Changes

TOKYO — The struggle for domestic corporations in any country to become global means more than just selling tools or other products outside their national borders. Often it means a clash of cultures that forces a company to rethink the way it does business, adopting different, if not outright foreign, means of getting things done in order to compete internationally.

Alas, Electronic News (the print edition): we hardly knew ye!Nowhere is this more evident than in the globalization of Japanese semiconductor equipment companies. Just as American companies have eyed Japanese markets, Japanese companies seek to become competitive forces on the other side of the Pacific. As a result these companies have had to overcome the cultural and political obstacles that separate the United States and Japan.

“As a matter of fact, the conflicts in Japanese business culture in the United States started years ago,” observed Tetsuro Higashi, chief executive officer and president of Tokyo Electron Ltd. (TEL), the largest semiconductor tool maker in Japan and the second largest in the world. Those conflicts extend back 150 to 160 years ago, Higashi suggested. “Since then we have been struggling.”

But those struggles have paved the way for change on both sides of the Pacific. For many Japanese companies, competing in America and around the globe has meant changing the decision-making process.

Higashi observed what many others have also pointed out: that leadership and decision-making within American companies tends to follow a top-down model, whereas Japanese companies tend to be much more consensus based; the organization as a whole plays a much more central role than the chief executive officer.

“In Japan it takes a long time to make one decision,” Higashi said. “But once it is decided the action is very quick.” This lengthy time preceding action can frustrate U.S. companies and executives, he added.

 Technicians assemble memory testers at one of Advantest's production facilities outside of Tokyo.
Technicians assemble memory testers at one of Advantest's production facilities outside of Tokyo.

It can even frustrate Japanese executives at times, once they have become used to American decision-making methods, said Toshio Maruyama, executive managing director and senior vice president of Advantest Corp.’s Automated Test Equipment Sales division. Maruyama spent 10 years helping Advantest establish a presence in the United States before returning to work in Japan.

“I agree with the American style,” Maruyama said, adding that the Japanese style of decision making, with its potentially long and numerous meetings, can affect productivity.

Of course, in the volatile world of semiconductors, time is often a critical factor. This is why TEL has taken a cue from its U.S. brethren and reorganized its corporate structure. Three years ago, it split its executive functions from its board of directors; in Japan typically the board also handles what in the United States would be considered executive duties and powers. Now TEL’s board oversees the fundamental policies and long-term goals, while its executives set corporate strategy to achieve the company’s goals and handle day-to-day operations, Higashi explained.

TEL may have an historical edge over other Japanese companies when it comes to understanding American business practices. TEL was founded in 1963 as an electronics import/export company and had considerable dealings with U.S. suppliers and customers from the beginning.

“Compared to other Japanese companies, our understanding of the American way is much deeper, I think,” Higashi said.

Indeed, TEL has been a leader among Japanese in adopting the American custom of the stock option. “We are the first company in Japan to offer stock options through the entire (corporate) group,” not just the parent company, Higashi explained.

Of course, it only recently became legal for Japanese companies to offer stock options in this manner, but then it is a foreign concept after all. As Advantest’s Maruyama explained, until recently employee turnover in Japan was virtually nonexistent. The Japanese, both employer and employee, saw employment with a company as a lifetime commitment, which has made it difficult for Japanese companies establishing U.S. subsidiaries to adjust to American practices of merit and performance bonuses and stock options in order to attract qualified candidates.

“It’s a very tough job,” Maruyama admitted, “this is one bottleneck we are having.”

But that bottleneck may soon be opened. “We are getting better though,” he added, noting that this phenomenon was one of the reasons behind Advantest’s announcement last fall that its U.S. subsidiary, Advantest America, would be publicly traded on the New York Stock Exchange.

Editor’s Note: As explained at length elsewhere on this site, this is a news story written by me that originally appeared on the now-defunct Electronic News’ website, which is long gone. It’s former sister pub Electronic Design News (EDN) currently holds the copyright to all Electronic News copy (to the best of my knowledge). You can still see a copy of this story at EDN.

Robust Solution Needed

Alas, Electronic News, we hardly knew ye: RIP.Buzzwords. Public relations jargon. Robust, worldwide, revolutionizing time-to-market jargon that the industry can’t seem to avoid and leverages us in the trade press uniquely crazy.

These are the words that make us audibly groan with pain when we see them. These are the words that we joke about around the office and in meetings. These are the words we forbid each other to say when socializing with one another on weekends. If we all worked in Texas Instruments’ marketing department, we would call these words our “key care-abouts.”

These are the words that jack up our time-to-copy and must be swiftly deleted. We writers hate these things. And it’s a robust, industry-leading hate, to be sure.

Thus, with the help of my colleagues, I have developed the Dirty Jargon List, á la George Carlin, comprising words and phrases that should be avoided. We hope this first-to-market jargon list will underscore Electronic News’ commitment to industry-leading copy. At the top of our jargon list is the tired, overworked “solution.” It seems products are no longer just that, but solutions. Everything is a solution, and the people that make solutions are, you guessed it, “solutions providers.” As one Electronic News writer pointed out, this is essentially meaningless. If someone asks me the time and I tell them, I’m a solution provider. Perish the thought.

This man is evil. He uses the term "robust." Correlation? Put “robust” in front of the word solution, and our first instinct is to dive for the paper shredder or the recycling bin.

The next-least popular cliché among editors is “world,” as in world-class or world’s first and the ever popular worldwide leader. Of course, “global” fits in this category as well. When I see “world-class solution,” my first impulse is to reach for a tactical nuclear weapon.

Other words on the jargon list include “unique,” “leverage” and “leading.” And then there are the hackneyed phrases, such as best-of-breed, state-of-the-art, bleeding-edge, cutting-edge, trailing-edge, priced competitively, superior performance and the new cliché on the block, orders of magnitude. Let us not forget the canned quotes that begin “we are pleased” or “we are excited,” or the increasingly prevalent “with the rapid development of.” Then there is the-ahem-solution that “underscores the company’s commitment to the industry.”

Leverage is my personal favorite. Everyone is leveraging something these days, usually solutions. It makes one ponder how the first semiconductor companies ever got started. What did they have to leverage? Vacuum tubes? Stone knives and bear skins? Rocks?

Of course, I don’t expect marketing or public-relations people in the industry to read this and experience an epiphany. More likely, they will e-mail me and say: “Gosh, Jeff, you’re right. Our company will position itself to become the industry leader in cliché-less copy! Our press releases will provide a robust jargon solution that will revolutionize your time-to-copy.”

No, a solution won’t be leveraged easily. It dates back to the dawn of civilization. Here’s an example of a press release from the archaeological record:

“The world’s leading clay tablet company, Babylonian Tablet Corp., is pleased and excited to announce today that it is launching ClayMud®, a new world-class tablet technology. Leveraging the company’s experience in mud-brick technology, Babylonian Tablet has developed a new industry-leading state-of-the art solution that will revolutionize cuneiform writing. By mixing clay from the Euphrates River with mud from the Tigris, Babylonian Tablet has developed a uniquely robust offering for royal scribes. ClayMud® is softer than previous generations of tablet clays, allowing scribes to work more efficiently, while drying in half the time of competing clays, improving royal time-to-market by orders of magnitude lower.”

An issue of Cuneiform Weekly before they changed to an email format.And here’s how it appeared in Cuneiform Weekly:

“Mud-brick and clay tablet maker Babylonian Tablet Corp. (BTC) recently rolled out its new ClayMud material for cuneiform tablets. ClayMud utilizes Euphrates River Clay mixed with Tigris River mud to produce tablet material that BTC claims is softer than previous-generation materials but cuts drying time in half.”

So much for leveraging a robust solution.

Editor’s Note: As explained at length elsewhere on this site, this is a news story written by me that originally appeared on the now-defunct Electronic News’ website, which is long gone. It’s former sister pub Electronic Design News (EDN) currently holds the copyright to all Electronic News copy (to the best of my knowledge). You can still see a copy of this story at EDN.

Is the Sky Falling?

Analysts, Tool Makers Say No

One would have thought the sky was falling on the semiconductor industry last Thursday morning as technology stocks dropped, with semiconductor capital equipment shares leading the way.

Chicken Little must be an investor.

Alas, Electronic News (the print edition): we hardly knew ye!Assembly equipment company Kulicke and Soffa Industries Inc. (K&S) Wednesday evening announced that it experienced some customer order deferrals and pushouts for ball-bonder tools because of space constraints and wafer and substrate shortages affecting certain customers.

“We hope no one overreacts to this news,” said C. Scott Kulicke, the company’s chairman and chief executive officer.

But overreaction is exactly what happened according to analysts and other equipment manufacturers. The K&S announcement, coupled with reports that Motorola Inc. would reduce its projection of demand for wireless handsets, prompted already nervous investors to sell off technology stocks Thursday.

On Thursday as of noon EDT, the tech-heavy Nasdaq index had lost 22 points, or 0.61 percent, falling to 3,635 after dropping more than 3 percent earlier in the day. Even the consistent performers in the capital equipment industry weren’t immune; Applied Materials Inc. was down $3.56 and closed at $69 per share. The Nasdaq rebounded, however, to close at 3,750, up 101 points.

While many chip stocks, including chipmakers IBM and Intel, ended Thursday on positive notes, equipment stocks remained tepid. The Semiconductor Equipment and Materials International (SEMI) index of equipment companies ended the day down more than three points. Technology stocks in general seemed to be holding their gains on Friday-the Nasdaq was up more than 14 points as of 12:45 p.m. EDT. Equipment stocks, however, continued to be lukewarm; the SEMI index was down another 1.5 points.

No Cause for Alarm

Fat kid in a bunny suit -- that's me!
Well, now I can say it: they were WRONG!

Technology and financial analysts said investor reaction had to do with mixed signals in the marketplace, and not the analog/digital kind.

On one hand, there was the K&S announcement, the Motorola announcement, and recent reports from some companies that near-future earnings may not be as high as predicted. But this tends to be typical for second-quarter reports during the summer, even during an upswing. Furthermore, many companies are posting record earnings and aren’t experiencing the traditional summer slowdown. Also, the Semiconductor Industry Association (SIA) last Thursday reported that world semi sales had topped $16.6 billion in June, a 48 percent year-to-year increase over June 1999 and an all-time record.

“(The SIA) figures are through the roof, which indicates the industry is as good as it can get, and every time we say that, it gets better,” observed Risto Puhakka, vice president of VLSI Research Inc. He added that the stock price of chipmakers doesn’t seem to be getting stronger, however, and some have even declined recently. “We have a lot of mixed signals from the marketplace,” he said.

“The basic thing is that the industry is at full swing, and you see shortages here and there,” Puhakka said. As for sensitive investors and bouncing stock prices, everyone is trying to figure out where it’s going to peak and how soon, he added.

Several analysts noted that assembly equipment companies have much shorter lead-times on orders than front-end tool makers, and that they are the first to feel the effects of a downturn because the assembly industry closely tracks the chip industry in general. This may have been part of the reason investors reacted the way they did, said Dick Greene, principal equipment analyst with SEMI.

“I haven’t seen anything in our data that reflects any particular signs of a downturn,” Greene said.

S.G. Cowen Securities Corp. analysts concluded that the reasons behind K&S’s announcement were essentially the same reasons behind Teradyne Inc.’s previous announcement of lower than expected quarterly earnings, said Tia-min Pang, managing director and equipment analyst.

Pang said that K&S revealed in a conference call Thursday that a Taiwanese subcontractor was primarily responsible for the order push-out because of space constraints at its facilities. Looking to other customers to fill the vacant slots, K&S discovered that other subcontract accounts had tempered their outlook, taking a more conservative approach to near-term spending, Pang said. The company indicated that most of these customers are located outside of Taiwan and for most, the issue is a lack of finished wafers from their foundry fab partners, he added.

This was consistent with Teradyne’s announcement that customers in Korea and Singapore had eased spending because the number of available finished wafers was less than anticipated, according to S.G. Cowen. The firm concluded that Teradyne and K&S share a mutual customer, Amkor Technology, that contributed to both companies’ announcements. Amkor reported quarterly earnings Wednesday night. The packaging and test company said that its fab utilization rates were 75 percent, which could mean one of three things, according to Pang. Either Amkor experienced a lack of wafers to test and package during the quarter, lost market share to its Taiwanese competitors or Amkor and Teradyne’s specific market segment is experiencing softness, Pang said.

“In digging deeper, it appears to be customer-, (geography-) and chip-application-specific,” Pang concluded. “We’re not seeing it anywhere else, just these two companies.”

Editor’s Note: As explained at length elsewhere on this site, this is a news story written by me that originally appeared on the now-defunct Electronic News’ website, which is long gone. It’s former sister pub Electronic Design News (EDN) currently holds the copyright to all Electronic News copy (to the best of my knowledge). You can still see a copy of this story at EDN.

‘Twas the Night Before Semicon

Alas, Electronic News (the print edition): we hardly knew ye!‘Twas the night before Semicon,
when all through Moscone,

Technicians and marketers scurried,
looking for coffee.

The tchotchke were hung by display booths with care,
In hopes that journalists and chipmakers soon would be there.

The executives were nestled all snug in their hotels;
Business was booming; they’d said good-bye to dry spells.

And me with my laptop, my boss with her briefcase
Were both gearing up for the crazy Semicon rat race.

When out on Mission Street there arose such a clatter,
I sprang from the Argent lobby to see what was the matter.

Away down 4th Street I flew like memory flash,
Angering morning commuters with a jaywalking dash.

The sun behind the breast of newly drifted fog
Gave a blurry luster to objects seen through last night’s grog.

When on what should my tired eyes do seize?
A gaudily lit booth and eight tiny booth-bunnies.

With a little old executive shouting like a carnival barker,
I knew in a moment, no doubt, he must be a marketer.

More rapid than eagles his product claims they came,
He whistled and shouted and hawked them by name:

“Now Copper! Now low-k! Now RPT!
On a 300mm bridge tool, that’s the key!

Semicon West: I used to dread this time of year when I worked at E-News.“To the front page, to the top of the market!
Now dash away! That’s what we want: a stock split!”

He was well-dressed and groomed, a right slick PR elf,
And I groaned when I saw him, in spite of myself.

But with a wink of his eye and a flick of a well-manicured hand,
I had a press kit and tchotchke, useless, gaudy, but grand.

He spoke lots of words, touting the companies wares,
Of my wearisome feelings, he seemed not to care.

And laying his hand upon a Brooks Brothers-clad hip,
He winked at me again as if providing a hot news tip.

He sprang to his booth, to his girls gave a whistle,
And away they all flew, like a chip-guided smart missile.

But I heard him exclaim, ere he schmoozed out of sight,
“Merry Semicon to all, come to our company party tonight!”

Editor’s Note: As explained at length elsewhere on this site, this is a news story written by me that originally appeared on the now-defunct Electronic News’ website, which is long gone. It’s former sister pub Electronic Design News (EDN) currently holds the copyright to all Electronic News copy (to the best of my knowledge). You can still see a copy of this story at EDN.

Editor’s Note Part the Second: Now I can say what I never could before, at least not in a public forum. I hated Semicon West. Hated. HATED.

HATED.

Hated. Not because of anything or anyone in particular — it was just hell month for me as the editor for Electronic News that covered semiconductor capital equipment. I used to get my ass kicked with work for a couple weeks before the show, and then during the week of the show that ass kicking was multiplied times infinity plus one.

I used to absolutely dread the coming of July, all the free booze not withstanding.

But Soft! What Nasdaq Through Yonder Chasm Drops?

William Shakespeare had a thing about the fickle nature of things. Everything was fickle: women, pride, time, love — even whole countries. But nothing was as fickle as fortune in Elizabethan times. In King Henry V, Shakespeare tells us all about “Fortune’s furious fickle wheel.” In Romeo and Juliet, the Bard’s young heroine reminds us that “O fortune, fortune! All men call thee fickle.”

Alas, Electronic News (the print edition): we hardly knew ye!One wonders what the Bard would think about the modern-day stock exchange. Here, even good news can spawn a Nasdaq nosedive. I refer of course to Semiconductor Equipment and Materials International and the trade group’s release of equipment book-to-bill figures for April. It was another record month, but the ratio of bookings to orders wasn’t quite as high as last month’s ratio, which paved the way for the Nasdaq to plummet to a record low. Fickle fortune(s), indeed.

What would Shakespeare make of the rise and fall of Silicon Valley’s sometimes nebulous empires, and the ebb and flow of more wealth in a day’s time than one could accrue in an entire lifetime in the 16th and 17th centuries?

Would he be perhaps inspired by the fickle nature of the stock market?

I like to think so.

Thus, without further ado, The Royal Shakespeare Electronic News Company gives you:

Much Ado About Money

This is not an original Shakespeare play. Dramatis Personae: CEOnicus, King of Siliconia; Adminio, assistant to the King; Shareholdio; Day Traydbalt; Analysto

ACT I. Scene 1. The King’s corner office.

CEOnicus: Adminio! Take thee note of my words.

Adminio: Yes, m’lord?

CEOnicus: To my citizens tell: Trade reporters, investors, employees, lend me your ears. Orders are up! Throughout all there is a most glorious backlog! Three shifts slave through night and day, sun and moon to ship our fair products! Now do not tarry, Adminio: To the Web you must post! Let the e-mail go forth!

Adminio: Yes, m’lord.

CEOnicus: Oh, brave new world that has such circuits in it!

ACT II. Prologue.

Analysto: Ah, orders are up, and backlog there is still in the Valley of Siliconia.

The Land of the Dragon beyond the rising Sun makes overtures, The East seeks more chips from the West!

`Tis true, said orders are not up as much as last month, But beware the ides of fiscal year! It is foretold, and we are prepared.The second-quarter doldrums we must not rue, for Siliconia is in the midst of an upswing!

Scene 1. Day Traydbalt’s cubicle

Traydbalt: Mon dieu! Margin, margin, wherefore art thou, oh margin! I am ruined! I spy thine shrinking book-to-bill! Curse fortune’s fickle fate, that I did not sell yesterday! Sell, Sell! Oh fie on you, little mouse! Thou canst not click fast enough!

Scene II. The King’s corner office. He is studying his PC.

CEOnicus: Oh a pox on this fickle market! Our stock plummets! O God! God! How weary, stale, flat, and unprofitable seem to me all the uses of this world!

Shareholdio: CEOnicus! A pox on thee, thou fobbing folly fallen eggshell! Why dost our stock droppeth?

CEOnicus: Alas, it is that vile Day Traydbalt! He shall taste the bite of my sword! Had all his hairs been lives, my revenge had stomach for them all!

ACT III. Scene 1. A corner Starbucks in Siliconia

CEOnicus: Aha! Thou ruttish fly-bitten puttock! Traydbalt, you shalt taste my steel wrath!

Traydbalt: Nay, CEOnicus, I beg you for my life! I am poor and near penniless now! For my gambles have paid me dearly! Woe is my fickle fate!

CEOnicus: Alas, I have not the strength to slay thee! Pity hath seized my heart. Men at some time are masters of their fates: The fault, dear Traydbalt, is not in our margins, but in ourselves, that we are underlings.

Analysto: To this screed must all subscribe: All’s well that ends well.

Editor’s Note: As explained at length elsewhere on this site, this is a news story written by me that originally appeared on the now-defunct Electronic News’ website, which is long gone. It’s former sister pub Electronic Design News (EDN) currently holds the copyright to all Electronic News copy (to the best of my knowledge). You can still see a copy of this story at EDN.