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Last week, Lip-Bu Tan, the CEO of Cadence, received the Dr. Morris Chang Exemplary Leadership Award from GSA. Before getting to the award, let me say a few words about who GSA are, and who Morris Chang is, in case you are not familiar with them.
Morris Chang was the founding chairman of TSMC back in 1987. It was the first dedicated foundry, and is now the largest foundry in the world, by a long way. The separation of responsibility between the foundry for manufacturing, and fabless semiconductor companies for design and go-to-market is the most important business change in the semiconductor industry since the original invention of the integrated circuit. So I think it is true to say that Morris Chang is the father of the modern semiconductor industry.
GSA stands for Global Semiconductor Alliance, but it used to have a name that was a bit more informative, which was the FSA for Fabless Semiconductor Association. Back in the '90s, the only semiconductor association was the SIA, the Semiconductor Industry Association. When fabless semiconductor companies such as Xilinx, Qualcomm, Broadcom, and more first came on the scene, the SIA was still stuck in the days of "real men have fabs" and wouldn't let them become members. So the FSA was created in 1994 to proselytize the fabless business model. In 2007, they changed the name to GSA, since that original mission had been successfully accomplished: the fabless semiconductor ecosystem was pretty much the whole (non-memory) semiconductor industry.
Lip-Bu Tan has been CEO of Cadence for eight years. It is actually his first CEO job, and he got it like everyone gets their first CEO job (other than founding a company), namely being in the right place when a company is in deep trouble. When Lip-Bu took over in 2009, the company was not in good shape, having to restate earnings and with a stock price down around $3, I think. There are obviously more ways to measure leadership than the stock price, but it is an objective measure of how other people perceive the company's value. The chart on the right shows the stock price for the last 10 years. The bottom of the dip is when Lip-Bu became CEO, the steep fall was from the previous regime.
Lip-Bu's name is obviously Chinese, but in fact he was born in Malaysia, educated next door in Singapore, then at MIT, and USF. In 1987, he founded Walden International where he is still the Chairman today. He joined the Cadence board in 2004, and then in the turmoil of 2009, he stepped up and took over from one day to the next as acting CEO, while the board searched for a permanent replacement. It turned out they didn't have to look very far, and the board asked him to continue leading the company. Lip-Bu has been Cadence's CEO ever since.
GSA created a video for the award ceremony. It opens with Morris Chang talking about what leadership means and how Lip-Bu exemplifies it, doubling Cadence's revenue, increasing its stock price many-fold, and changing Cadence for the better in a myriad of ways (many of which are hard to discern unless you work here). John Shoven, the chairman of the board, talked a little about persuading Lip-Bu to become CEO. There were many tributes from other industry luminaries such as Simon Segars, the CEO of ARM, Tsai Ming-Kai, the CEO of Mediatek, Meg Whitman, the CEO of HP Enterprise, and many more.
Then it was Lip-Bu's turn to give his acceptance speech. He started with his family. One key piece of advice came from his sons, Andrew and Elliot, who told him not to read comments about his performance on the internet. There are two really key teams that you need to be a successful team. The most obvious one is the senior management team since the leadership that you provide is largely modulated through the executive team. The less obvious one is the board. You need their active support. It is a fiction that as CEO you don't have a boss, the board is your boss. More indirectly, Lip-Bu has the partners of Walden to thank. As Dr. Leo Li pointed out when making the award, as a result of being at Walden for 25 years, Lip-Bu knows everyone in the semiconductor industry, and seemingly everyone in China.
Then, of course, a company like Cadence would be nothing without customers. It is not just the obvious truism that if customers don't value products enough to give Cadence money, then there is no company. Developing products, especially for the leading edge, is a true partnership.
Lip-Bu pointed out that the areas in which he is especially interested are hyperscale datacenters, automotive, IoT, and genomic sequencing. These were some of the same areas that Alec Ross had highlighted in his earlier keynote: driverless cars, liquid biopsy, machine learning, global supply chains, open culture.
I happened to be sitting next to the organizer of the event, so I can wrap up with a little color on what it takes. There were 1500 people there. The event company is based in Dallas (as is GSA, across the road from TI) and so a lot of the event comes in trucks from Texas. It takes pretty much all year to organize, from the postmortem meetings soon after the event, to the two days that it takes to set up the room. I guess they will soon be starting on the 2017 dinner.
Watch the GSA video:
I can do no better than to add my own congratulations to Morris Chang's, who says early in the video, that "Lip-Bu richly deserves the Morris Chang leadership award."
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