
	Home \| Who We Are \| Our Philosophy \| Site Policies \| Become a Sponsor \| Credits \| Products of the Year 2011 \| RSS FEEDS \| Site Map Search

lowpowerZONE Archive of engeniusBLOG

Half A Century Of Innovation

Apr 6, 2009 at 12:00

I have made it a very firm practice not to talk about the business models of companies in my purview – except face-to-face with them in their own conference room(s). I am not a tattle-tale, passing other people’s business on to others; I don’t throw designers’ names around in other companies; nor do I ever, ever, discuss the road maps of the companies I cover with others. I have been invited, to my great pleasure, to address a company about how I, as an engineering outsider, see their business: but that was a closed-door session.

But, just for once, I am so dumbstruck with the happenings at National Semiconductor that I have to put some facts – all public facts, not internal material that I might otherwise know about – out on the table and allow you, our readers, to comment back to us. I am trying to deliberately feed our blog in this way in the hope that you will respond with your own personal viewpoints, experiences, and other values, so that we can all better understand what has been going on and where National is going…

I have to say that blogs are not my natural medium, but I will check in as often as I can – and I hope that readers will also comment on other readers’ postings. This is a totally anonymous process; give yourself a wonderful nom-de-plume and please feel comfortable with it and just say what you want to say. If something is out of legal bounds we will make sure that what is posted does not get either you, or us, in trouble. We analog people are not prone to getting into public forums, but I hope on this occasion we can help one another out.

OK, let’s get some facts out there:

For about eighteen months National has been pushing its PowerWise franchise, a rather arbitrary (?) rating of product power consumption compared to performance of its ICs, not just power management ICs, so that a design engineer, they feel, can choose to put together the greenest design possible. National puts an ® mark alongside, even though the name is already used by a consortium of six electricity distribution companies in Ontario, and by an Australian company making line power distribution products.

This PowerWise quality factor tends to make me as nervous as I have ever felt about any sort of Q factor in electronics. Do you think that this metric is valid; is it something you would take into account early in your design; is it something that someone sincerely managed to sell to senior management in a Monday morning PowerPoint presentation; or do you just see it as a silly piece of marketing double-talk? I do know from competition that the whole matter is regarded as a joke by some of them.

On November 12, 2008, National announced that it was eliminating 330 positions in the company. I only knew a few names on that list, but while there were a couple who absolutely did not appear to be worthwhile employees, there were also some perfectly viable individuals who looked like they must have gotten on the bad side of someone in authority. Most of the latter seem to have landed new positions almost immediately within the analog industry. Were you one of them?

For some months in 2008 National had been hinting/teasing about a solar energy product that was going to increase the insolation efficiency of photovoltaic solar panels. The first real public announcement came on March 5, 2009, when it was claimed that SolarMagic could recapture up to 57% of the insolation lost by clouds and other sun interfering barriers, like tree branches. The information given was, to me, more than a little sketchy, but I think you can imagine some sort of common output dc bus being fed with individual panel dc-dc converters – equipped with some intelligence as to input voltage changes, caused by shading – to make the whole process smarter and more efficient. Is that a good theorem?

I had been hearing rumors of further layoffs at National for some weeks – and in fact asked one of my PR contacts directly, the very day before they happened – and then they came with a 4 AM (Pacific) announcement on March 11, 2009. 850 jobs to go immediately, 550 of them in Santa Clara, plus another 875 jobs over the next couple of years as National shifts its manufacturing and back-end work into fewer locations. The California employees were lucky in one sense: under the “socialist laws” (as someone described them to me) existing in the State, National will be required to pay each employee two months’ salary. Who did the company let go? The cream of the cream, no less. Engineers, designers, product managers: people who it would take years to recruit. Why, people?

Among those National let go was Bob Pease: with little argument, he has to have been seen as the public face of the company, and an inspiration for thousands of upcoming analog engineers. He is also a controversial figure in some ways, but he was the major brand of the company. Frankly, and not meant negatively, the only way that he should have left National would have been in a box. One can imagine that a couple of sizable U-Hauls will be required to empty his corporate space. Will National also expurgate his history in its corporate memory by somehow deleting the 208 Pease hits in their search engine?

And like the Catholic Church of old, in a totally amoral act, National has eliminated the Research Library… Everything is available on the Internet, folks! If I was in a position to do so I would make a bid for the Library’s contents. Is there an investor with deep pockets out there who could buy it for us, and preserve it?

Eight days after the early morning of the long knives, on March 19, 2009, the company announced that it was acquiring Act Solar, Inc. Act Solar is different from National in that it has actually delivered its PowerString product in this field, providing shading performance awfully like the claims of SolarMagic. Was this acquisition made to bolster SolarMagic? Was SolarMagic in danger of not actually working as advertised? Were there legal difficulties in sight for SolarMagic with PowerString left in the picture, or technology hurdles that were not seen earlier? This Editor wants to know, people!

National Semiconductor started in business in 1959, fifty years ago. It has been an icon in the analog business model. Stupid, short-sighted management throughout the years allowed – some would say forced – the creation of the Maxims, Linears, etc., of the world, but National was still to be highly regarded as initiators of technology in our field. Yet look at them in 2008: 47% of their business was in power management, 25% was in amplifiers; yet only 5% was in data conversion. How, as an analog company, could you let that happen? Yet another audio boomer is hardly going to impress us hardened journalists. How did they go so wrong, so biased in such narrow fields, so waiting for the market to suck such a huge amount of sales from one dominant technology area?

Of the 7300 employees that they had, National has now discarded, and will be discarding, with current announcements, 25% of their workforce. Nearly 1800 families will be left hanging. I had an e-mail today from an off-California campus engineering employee who still has a job but is clearly not having any fun, and who is nervous. I have received e-mails from others desperate to find out who is hiring (and there are analog companies – even though they have had their own layoffs – who are taking advantage of this wonderful pot of resume gold that National has handed to them).

What is this all about? Over the years Halla has managed to go off the analog track a few times; he even managed to goad Intel into cutting the company off as a supplier. What is he trying to prove here?

Brian Halla, Chairman & CEO of National, had the audacity to present himself in front of the Mercury News (San José Mercury News to some of us older ex-residents) Editorial Board, three days before the morning of the long knives, on March 8, 2009, to brag about his recently-delivered Tesla Roadster, which he sounds rather terrified to actually drive. How Halla physically fits into the vehicle is another concern, as our slim-lined Lee Goldberg had some problems. How does a man who has spent at least $109,000 (that’s the base price without many of the extras that are available) on a car sleep at night, three days before castrating his company? Please don’t tell me that it is a company car. Does he still park his gaudy yellow Hummer in Santa Clara now, or is it the Tesla? Which environmental role model should we see here?

Halla’s compensation package in 2007 was worth $12 million. It could have been $16 million if he had met targets, which he didn’t. Revenues in 2006 were $2.2 billion; they fell to $1.9 billion in 2007, then $1.89 billion in 2008; in 2009 they will be 40% lower. This is a man who is desperate to prove himself, despite himself. But, financially, he is already successful, and the plight of others seems to be as immaterial to him as the plight of the average 401(k) holder is to Wall Street. Did you feel any company concern when you were told of your future, guys?

The company is carrying a huge debt. After a balloon payment in April 2009 (required when the long-term debt was re-negotiated in December 2008 -- when the company knew the **** was going to hit the fan) together with increased interest rates, there will still be over $1 billion in debt on the balance sheet. Is the company viable financially? Do you agree with analysts that this is a stock to HOLD?

Halla has surrounded himself, on his Board, with a group of nice but decidedly non-threatening Directors. They include a guy from Micron Technology, the former CFO of both Tektronix and National, a former Secretary of the Navy (under Clinton), and retirees from Agere, Novell, and Analog Devices. Is this a team to challenge your technological savvy and corporate direction in 2009?

So, it seems, reading between the rather vague lines, that Halla wants to take the company in the direction of being a systems supplier of alternate energy (with PowerWise and SolarMagic as the keystones), relying on National’s legacy analog power parts to do so. Is this a sensible business plan, or are you horrified?

Certainly our whole business has become heavily dependent on legacy parts – some companies more than others – and they are often parts to be extremely proud of. But every year that you stop future development, you close market doors, be it because of excessive manufacturing costs compared to the competition, or because you fall behind in supply voltage trends and speeds. Do you believe this to be true, or can you live off fifty years of “laurels?”

Please use our blog to comment. This, to me, is an important one, and one that is quite personal. I’ve left a lot of questions with you. Please help me with the answers.

Thank you.

Posted in lowpowerZONE

Comments

F.C. Trevor GALE
Posted on Jun 13, 2011 at 10:26

Bob (R.A.) Pease is the most knowledgeable resource I have observed in the world of analog engineering. To be layed off or retired is not the reward he deserves; I worked in the Space business as a senior engineer responsible for R.F. and other analog design, admittedly also with interfacing to computers within my remit, and after a reorganisation there was no place for people like me, only for project managers and politically-motivated individuals; I was already (at 53 yrs old!) in position to take retirement financially but I still wanted to work but nobody wanted a hands-on, 'out-of-the-box' thinking engineer like myself, so I can imagine how Bob feels even though my knowledge is way less than his in this field. So I still persue my interests, (see www.tgale.net for those) yes with soldering-iron in hand, in my extensive workshop here at home and my ham radio station. You just can't let it go, can you? No. Now, my health isn't as it should be but I look forwards to a recovery to once again go hiking with a 'real' 120-rollfilm camera in the Swiss Alps and doing lots of other things besides; I hope Bob will find the time to do his interests likewise - somehow I think he will and I wish him all the very best at this stage in Life. Cheers, Bob!

trekkie
Posted on May 12, 2009 at 16:19

No, not like Ralph Kramden, more like a Ferengi. The "Rules of Acquisition" are probably his bedtime reading. Google it.

Don Sauer
Posted on Apr 25, 2009 at 9:30

Brian reminds me of Ralph Kramden who was always looking for ways to make his "big score" that would set him up for life. If Ralph ever did succeed, what would happen after that?

corporateslave
Posted on Apr 24, 2009 at 13:16

Anyone remember the time capsule? I don't remember when they said they would dig it up... but I'm sure it will be a laugh. It sounded stupid when they buried it... things like "Geode would be the best cpu in the world", "NSM will be at $1,000/share"...

Goes along with other great Halla moments like. "predicting the market recovery after the dot com crash". Or any of the (too many to count) dumb ideas Halla has had. In fact the only success Halla has had, was when he turned around and sold the bad ideas he bought in the first place. When everything was going good it didn't matter how much you screwed up, the market carried you anyway. But now when things are bad... I think it will show. I think Halla has kept his job, because people were afraid of a negative impact/uncertainty of change. Halla and friends give themselves plenty of stock/votes, but maybe others finally think uncertainty is better than what we have.

National unfortunately is a corporation not an innovative company. The executives rape the company in compensation, but don't really don't offer much in return. But is it really much different elsewhere? Our industry has grown out of the innovators who founded and created and now it is run by "corporate" guys who come in and focus on re-orgs and optimization, but offer no innovation. Take a look back at re-orgs over the last 10-20 years... are there any that did what they promised? All they do is make it look like something is happening, until it's time to re-org again..

Just think of the valley itself... it started as a "bed and breakfast" type place to work, now it's just a sprawled out corporate hell. This is what our industry has turned into. We may be highly paid, but we are still corporate slaves.

Kevin Hilbiber
Posted on Apr 23, 2009 at 15:38

Having long been an acolyte and fan of NSC, having cut my teeth on their 1976 applications data book, that others copied in part later- I have long wondered what was going on there. Using a CFL ballast to run led's? Is this "power wise"? I use an LM358 and a few resistors, capacitors and a pair of gp TO-92 transistors to obtain an off line PWM dimmer for led's. No magnetics, no need for a "75V maximum" power supply as the "power wise" series require.

Regarding Bob Pease being cut off- I bet if NSC could, they would lay off Bob Widlar now too. Who single handedly bettered the Band Gap Reference my Pop published on in 1964, making possible all these "legacy" chips that are now being dumped by the wayside. Sorry to hear that such an excellent company as NSC has become just another corporation that is top heavy and bottom stupid. Sigh. EDN- you will lose lots of subscribers who enjoyed Pease Porridge. Hope that ad revenue makes up for this loss. :D

linearspec
Posted on Apr 21, 2009 at 8:16

Sanjaya, all, Brian H has basically told the employees that the ONLY thing that matters is SolarMagic and the other 'blue flame' focus on LED drivers. Opamps, ADCs and interface are gutted down to about 1/3 of the original manpower. Most of the marketing and product development resources have been already moved to SolarMagic and integrated power modules (ala Vicor, Synqor).

Sanjaya Maniktala
Posted on Apr 20, 2009 at 10:02

I worked at NSC for 5 years. I have written three well-known books on Power Conversion, one of which has a very nice review right here on engenius/analogzone. Incidentally, I felt National management was always short-sighted. I think the company has awesome talent (which is why they are still there), but it was always run very badly indeed. So now I can say, "I told ya so". Earlier, you would have said I was over-reacting. OK, they did not even pay me the regular author incentive supposedly due to all engineers, and for years. In general making it very very difficult for me (or anyone else there) to be an author beyond an article or two. My book from McGraw-Hill was used by them freely as a raffle item to promote their new Arrow/National website, but when I said "hey, at least pay me my incentive (AEP) dues" an ugly Email exchange followed, at the end of which they grudgingly seem to have paid me a paltry 1/6th of what they pay routinely for a single article to others. All this, despite a written committment from their erstwhile AEP manager, that they would pay me on a chapter basis (indiicating each chapter would be treated as an article). I was their only gues columnsit on Planet Analofg and they almost fired me because I wrote a general article on how I think, as an Engineer, power management should be managed for better efficiency. They also did not pay me for that. I mention all this since I think it is a classic case of being penny-wise, pound foolish. So perhaps Pease got too expensive for them, and was not accepting paltry paybacks like I did for years. He was expensive I know, but he sure brought in the crowds. He would also fight to get paid. But that creates a lot of envy among the dead-wood middle managers. Soon they inevitably gang up on you and start painting you as some sort of mercenenary, not a professional, which you are.

When I first heard about Bob, I had immediately thought to myself "How very stupid of them". But I was not surprised. Why? The answer to that is "Remember, I spent five years there (you probably didn't)."

I have a blog link on my website in which I have talked about Halla's thoughtless if not provocative utterances at San Jose Mercury News, just a week or two before they laid off almost a third of their employees, many of them who I respect and remember fondly. I also talked about Bob Pease. Here is what I wrote:

From the EDN blog called "Anablog" (now withdrawn mysteriously), and the Electronic Design blog (Click here) 99.99% people commented very negatively about axing a legend like Bob Pease so unceremoniously. I too was horrified they went that far, and more so, did it in so brutal a manner. Didn't he deserve at least a golden parachute on his way down, after decades of service to them? Couldn't they have at least kept his honor by not timing it with the layoffs? What was the message they were trying to send out by doing so? That they care two hoots about his contributions over the years? That they are somehow bigger than him today simply because they felled a bigger man? Well, in fact, that may be their only claim to fame as the company shrinks in revenue and employees with every passing day. I remember, when I was growing up years ago in India, I always felt Bob Pease was the part greater than the whole. He was National for me. True, rubbing shoulders with him in Building D somewhat tempered my idea of a legend, but I know he did a lot in the past, and still is the biggest attraction for National. You have no idea how people flock around him at the Analog Seminars. (Well they flock around Halla too, but for different reasons). Pease is certainly a thousand times bigger than all the top brass rolled into one. Those modern, brash managers do not even come close to him in the final reckoning. For starters, they need to learn how to treat our heroes with honor. In fact more so as the heroes inevitably drift into meaninglessness and nothingness with naturally increasing age. We must respect them on the way out too. We must realize that all they have left eventually is their legacy. And we must guard it for them. Because it is ours too. They gave us a lot over the years. In my case, I understand and almost agree that I was inconsequential (though I see they still have to almost lie about my presence there as you can see in the above snapshot). But I am proud that at least I went on my terms, when I decided I wanted to go. Unfortunately, I think poor Bob Pease overstayed his welcome. So it seems on that fateful day he was carried out virtually against his will. But, do you think we remember and honor Caesar today, or the band of nameless, scruffy individuals who sank swords into his body? History will decide once again.

Happy NSC Ex
Posted on Apr 17, 2009 at 13:40

Dennis Monticelli is a good man and a long time faithful employee of NSC. He talks the talk and his post sounds like he marketing the plan well. Unfortunately, as is the case with all of the previous NSC strategic debacles it’s very difficult to draw a direct line from this in-vogue green strategy to bottom line profits. A few years back NSC was touting their expertise in portable power and at least the cell phone market was growing rapidly with the advent of increased functionality at the time. After missing the boat with that strategy largely due to an inability to meet customer needs and expectations, NSC is now moving to another SOC strategy aimed an a potential emerging market. Where the green technology market is going and how fast it will get there in lieu of the current economy is anyone’s guess. Combine this with NSC’s current well stated financial situation and I’m very glad to have my time at NSC well behind me. I wish good people like Dennis well but somehow I feel that National Semiconductor Corporation will go the way of their library, splintered in many pieces.

Digital Video Guy
Posted on Apr 17, 2009 at 10:28

Thank you for the fine and searching editorial on NSC. Descriptions such as "scarry" and "horrifying" don't quite express the terrible state that NSC is in today. I'm now quite pleased that I retired several years ago. But, after working there for 25 years, it is hard for me to see what was a fine analog company dismembered and raped by such predatory management. NSC reminds me of Microsoft in some ways, but most particularly in the bad habit it has of buying perfectly good companies and then completely screwing them up, dismembering them and discarding the mess without any resulting benefit (remember ComLinear?). With ComLinear NSC bought a veritable goldmine, but especially ComLinear's expertise in digital video. Arguably one of the most profitable product lineups NSC has, they have decided to eliminate many of these products and screw some of their most loyal customers. That's no way to stay in business. I wouldn't take any bets that NSC will be around in 2059 given its present situation. Happy Halla-daze!

analyst
Posted on Apr 14, 2009 at 19:18

on, regarding Solarmagic turning around - I wouldn't take that bet. National has $250M of bonds due at end of May 2010. Another big chunk of 1/3 of a billion due in 2012. Now, look over at the latest SEC filings from National. Here --> http://finance.yahoo.com/q/is?s=nsm ..................As you can see the Net Income From Continuing Operations has absolutely cratered. Their last quarter produced ONLY $21M net income. Their last FY quarter will likely be worse. The Interest Expense (which is interest from their LTD or bonds) is at $18M a quarter.
Rumors are saying now they may not even make bookings/billings in the quarters of their fiscal year.

I think they are putting all their eggs in the SolarMagic basket. They will either sell or dismantle the product lines for opamps, ADCs, Linear Regulators and Audio - and any part that cannot be integrated into modules.

Paul McGoldrick
Posted on Apr 14, 2009 at 18:50

Thank you, Maestro, for your shrewd observations about Mumbai's analog capabilities I'll be sure to put the city on my Editorial visit list. We now have enough displaced engineers in the industry that any further talk of expanding Visa programs should result in a lot of screaming from all of us. analog_Wanderer: you see the present direction as version 3.0 of National. I've lived through a lot more versions than that and I'm not at all sure that the solar path is even a direction -- it feels like a badly thought-out cheaply designed Japanese Wii game... Suffering NSM Fools badly: Oops, I knew that the Hummer was yellow now -- someone mentioned it to me with a side comment that it would not be out of place leading a gay pride parade. And, Jerry,it should be law in your desert part of the world for new housing to be forced to have both solar power and solar water heating -- and waste water recycling wouldn't be out of line either. And I agree with you that shading should not be an issue in a decent design. Lee argues with me that some smarts might be useful when the panels age and the outputs become uneven. Thanks to all. Paul McGoldrick

Don Sauer
Posted on Apr 14, 2009 at 16:20

I am hoping this blog might change Brian's luck. In all my experience (which includes actual personal experience), it is hard to remember Brian doing any thing that actually benefited National Semiconductor. It is more like he has sort of an anti-midas touch. He appears to be able to turn something that is solid gold into solid brown just by touching it. Some of us have too much fond memories of the great days at National Semiconductor, and don't wish to see a repeat of what happened when Brian took on Intel. Maybe this one time he will be right. Maybe this blog might help change his luck. If this one time things turn out as he expects them to, I personally will be happy for both him and National.

Brian Baller
Posted on Apr 14, 2009 at 8:18

Well, of course Dennis M is not going to rock the boat. He has long supported Brian Halla's every move.

Asp over margin dollars
KMS
Tearing up the analog core business units
Non qualified and non technical "executives".

Self serving or niave? You be the judge.

Jerry Steele
Posted on Apr 13, 2009 at 5:28

Talk about marketing spin, compared to meaningful technology, Solar Magic is a technology that only compensates for what really are faulty installations.

Properly done, solar panels are never subject to partial shading.

I know a little about what I'm talking about, owning an off-grid solar home.

Suffering NSM Fools Badly
Posted on Apr 11, 2009 at 20:35

Brian Halla doesn't park his "gaudy yellow Hummer in Santa Clara" any longer. He parks his obnoxious blue Hummer instead for the last three years.

analog_wanderer
Posted on Apr 11, 2009 at 1:11

I cleaned up my post from the Yahoo message board which was written in a fit of disappointment with the new direction, National 3.0.

The troika of Brian Halla/Don Macleod/Lewis Chew are fundamentally changing National Semiconductor to once again pursue selling complete semiconductor "systems" or "modules" (National 3.0), similarly to the "systems on a chip" (SoC) strategy (National 1.0), which was a solid state solution. The SoC strategy led to the internally infamous "we've burned the boats and were not turning back" speech, referring to the core analog building block legacy of the company. When the SoC strategy failed to meet expectations (a polite way of pointing out Intel's successful Crush 2000 program [as in "crush the competition"] strategy, scorching National's SoC strategy like a Southern California wildfire). These excursions into the digital systems arena cost the company dearly with the acquisitions of Cyrix, Mediamatics, Innocomm, and about five or six others. After these "assets" were jettisoned, at a loss of course. Halla & Company once again returned to the ANALOG well to raise money and to resurrect a modicum of respectability (National 2.0); the analog "boats" had to be rebuilt again and analog became the mantra again. Is it difficult to determine why the company's brand is crap? Why Wall Street beats the stock like a rented mule when there's a whiff of financial uncertainty? Strategy du jour is no way to build a brand or customer loyalty in the analog semiconductor business, where product lifetimes last many years longer than its digital brethren.

This emphasis again (just like in the SoC era: National 1.0)on average selling price (ASPs)should not supplant the more important gross/operating margin and revenue. ASPs should be third priority! Unfortunately, the once admirable balance sheet from two years ago is relegated to history. When the company focused on analog products/margin, the stock performed (from January 2003 to about July 2007) better than any other peer competitors (ADI, LLTC, MXIM, TXN, ISIL, STM, FCS, etc.).

Apparently, 30-year company veteran, Mr. Macleod, the former CFO and now president, and CFO Lewis Chew lack an appreciation of National Semiconductor's heritage and history of analog innovation and success.

Lastly, the "retirement" (a laughing euphemism) of analog industry icons like Bob Pease and Pat Tucci, along with many other analog designers and applications engineers in their 50s and 60s will handicap National Semiconductor when it comes to rebuilding those company-saving boats again.

National Semiconductor's 50th anniversary will be next month; I genuinely hope it's still around the next 50 but I have my doubts. Despite the last 15 years of Sporck, five years of Amelio, the first seven years and last two years of Halla, the company survives. This truly is a testimony to to all the engineers and supporting cast who toil away despite "C-level" executive blunders. Now, after last month's purge there are even fewer engineers to build those analog boats.

maestro
Posted on Apr 10, 2009 at 20:25

Who needs Bob Pease? Who needs analog anyway? It can all now be handled by call centers in Bombay and Calcutta where you get someone on the line telling his name is John when it's really Rajiv or Ravi. Did Washington say we should encourage more students to pursue EE because we have a shortage? So how do we then convince the newer generation that EE is worth pursuing when they see National laying off 25% among whom some were actually very good engineers, yes Bob being one of them who actually understands micro electronics as does Dennis and many others. But National isn't alone on all of this. ADI sold off some of their business and gave away Joe Buxton and even Paul Brokaw. What in the hell is wrong with these guys? What were they thinking. Personally, I would consider buying National stock on one condition, next time before they do a layoff, I'd ask that they change dealers. Oooops make that leaders, but what's the difference anyway, leaders are often dealers arent't they? I don't enough about the company to predict anything but I will say that I've met some great engineers from National, don't believe me? Just ask the ADI power management and amps group, same with LTC and Maxim.

Paul McGoldrick
Posted on Apr 9, 2009 at 17:54

Mainly for Andy T, but also as a general note, the blog at EN-Genius is moderated but submissions cannot be edited. They are therefore either approved, or not approved. So far in this thread the moderator has not had to disapprove any submissions. The news from Rumor Mill that the library was "distributed" among the company's engineers is, to me, OK. The volumes are at least going to homes that will appreciate them rather than potentially ending up at a flea market on Bascom Avenue. Paul McGoldrick

Another Paul
Posted on Apr 9, 2009 at 13:35

Remember when the failure of executives got them an immediate walk out the front door? Now it's more like baseball. They all get three strikes but the last one always seems to take out the entire team.

NSC began it's downward spiral when Charlie turned over the reins to Amelio and Halla has only made things worse. There has been little to no recovery from the brilliant decisions in the 'me, too' framework. Internet Appliances is a shining example of this. It was never more than a wish and a release on the business wire. No technology or clear roadmaps were ever demonstrated to us inside the company or the eager buyers.

The best demonstration of incompetance was the NSC weakness in, and eventual withdrawal from, Sematech. That entire organization was Charlies creation and the New Kids on the Block just flittered it away.

I left the company 6 years ago and dumped my stock options within 2 years. Good move on my part.

NSC
Posted on Apr 9, 2009 at 10:23

6.15% SR NOTES due 2012 ($375M)
Id Class Description Curr Rating Rating Date Rating Action Watch Status

CUS:637640AD5 Senior Unsecured USD Baa1 7 JUN 2007 Assign Not on watch

6.6% GTD SR NOTES due 2017 ($375M)
Id Class Description Curr Rating Rating Date Rating Action Watch Status

CUS:637640AE3 Senior Unsecured USD Baa1 7 JUN 2007 Assign Not on watch

GTD FLT RT NOTES due 2010 ($250M)
Id Class Description Curr Rating Rating Date Rating Action Watch Status

CUS:637640AC7 Senior Unsecured USD Baa1 7 JUN 2007 Assign Not on watch

TERM LOAN FACILITY due 2012 ($500M)
Id Class Description Curr Rating Rating Date Rating Action Watch Status

CUS:637644AB1 Senior Unsecured Bank Credit Facility

Rumor Mill
Posted on Apr 9, 2009 at 1:55

Reports reach this Undisclosed Source from within NSC that the volumes comprising the famous Research Library have been parceled out amongst the employees, current and former. A sad fate for a one-of-a-kind collection.

Andy T
Posted on Apr 8, 2009 at 19:19

As part of my week-starting routine, I read this editorial early this week and passed it on to several of my colleagues at National, not thinking much about the spicey writeup (hey, it's Paul and everyone knows Paul) beyond its novelty and gutsy perspective. Now, as a former AnalogZone contributor, I just wanted to come out into the public eye, and say, "gee, thanks a lot guys". My commentary contribution over at EDN, a place I read and post regularly on Rako's and Wirbel's blogs because it is not moderated and you hear (heard) the voice of the engineering community, regarding a university's autonomous underwater vehicle was moderated for the first time today and looks like it was actually edited, removing the better part of a summarizing sentence, with nary an F-bomb or misuse of their/there/they're in my submission. My punch line is now gone, something I learned through writing here a half decade ago as a matter of fact. My commentary on Rako's Bob Pease layoff piece was obliterated, as was everyone else's who spoke kindly of the guru. Yeah, thanks a lot guys. Was all this necessary? Will this even get past the En-Genius moderator without edits? Why not just erase it all like EDN did and kiss and makeup, maybe even get an advertiser out of it? Business is business. Why is En-genius still allowing this to be up, yet EDN is now in major overreaction mode on any topic? Sorry everyone, but that EDN edit thing today drew me out here for a personally-opinionated public rant versus just sending an email.

Paul McGoldrick
Posted on Apr 8, 2009 at 19:17

thanks finance_guy for the information on the long-term debt. The numbers do not look good.

In other news the anablog on EDN is now moderated -- with a 24 hour posting promise -- apparently so only nice things can be written about Reed's advertsers, or potential advertisers. Ah, the freedom of the press...

Paul McGoldrick

finance_guy
Posted on Apr 8, 2009 at 14:09

Public info on debt:
http://cxa.marketwatch.com/finra/BondCenter/BondDetail.aspx?ID=NjM3NjQwQUM3">

NSM.GD / CUSIP: 637640AC7 Maturity Date: 06/15/2010
Offer Size* $250,000.00 Amount Outstanding* $250,000.00
* dollar amount in THOUSANDS.

Now, take a look at the cash flow statement from the quarterly SEC (page 5) and you can see they have $292M net cash from operating activities for first 9 months of the current fiscal year. My guess is it will tough for National to realize another $100M net cash from operation for the next quarter. So they realize $400M in net cash from operating activities next year...maybe. But if trend continues, $300M net is more likely. That's why National may be forced to either issue more stock or get a new bond or set of bonds.

http://idea.sec.gov/Archives/edgar/data/70530/000007053009000012/form10q_30109.htm#SCF

Paul McGoldrick
Posted on Apr 7, 2009 at 21:56

Thank you for your postings to date.

First, Mr. Monticelli; yes, I have very personal feelings about National. It was formed about two years after I put a soldering iron to good use for the first time. It has been a litmus for the industry -- both good and bad. Even ex-employees, of which there are an awfully large number, who left mostly due to management failures to listen to good ideas, still use the Credit Union...

I have no doubt that you and your team are dedicated to making solar, and I presume other alternate energy sources, a success for the company. The problem is that this is not an activity that National should be involved in. National is a semiconductor operation: design, fabrication, and sales. If you want to make modules, then a completely separate operation should have been formed: one with the right financing, the right designers, the right applications guys, and the right sales team.

It is unfortunate that as engineers we are often fooled into actions by fellow managers who have a different agenda, one dependent, it seems in this case, on the stock price and the rewards that follow.

Gutting a company to make way for a completely different activity, in a completely different marketplace, is like suggesting to Amtrak that they should add some profitable freight cars at the end of their trains, but make the overall train shorter because you cannot haul more passengers with the energy you have available.

From other comments, I have to agree that the debt that National is carrying is terribly high. The balloon payment of $250 million for next year is not one that I understood had been public, as yet. Compared to the cash situation that is one heck of a lot of money. Is it enough to bring the company down? I don't know. I am not a fiscal expert to any extent; I can only make comparisons with other companies and how solid they are, or are not. My comparisons would include Intersil, for example, with a really clean balance sheet.

I am upset – really upset – by the news that EDN may have pulled content, including readers' responses, because of some pressure from National. If that is true, and I have no way of proving it myself, both National and the publisher should be ashamed of themselves.

Other readers have contacted me directly by e-mail, saying that they could not post on this blog because they would be too easily identified. I respect that, but would note that, in general, there still remains a terrible level of fear in those employees who still have jobs and those whose settlement packages might be "adjusted." Not a productive environment.

The notion that National may be in line to be bought out is rather far fetched at this moment. However, if the economy recovers in the next six months – and there are certainly some favorable indicators in the electronics sector that this is happening – National is going to be in an extremely weak position, and that is the point at which we might see some action by a purchasing group.

People have told me for the last fifteen years that nobody can afford to build a new analog company that has its own fabs. But one that already has those fabs, and is going cheap, may become extremely attractive to a group that has a notion about what analog parts can be designed, and sold.

Thanks,
Paul McGoldrick

sindarin12
Posted on Apr 7, 2009 at 18:30

"Halla inherited a vibrant analog business at National, one built by the sort of men who gave analog designers their reputation for eccentricity."
---
Words now escape me. What a quote to remember. I guess the shareholders of this company don't care that in less than a decade, Halla took National Semiconductor at its heights, and now he's left it like Carthage. All needed now is to finish salting the ground so nothing else can be designed or grown at this place.

tube man
Posted on Apr 7, 2009 at 14:58

Lee - who cares what an editor has to say? As you had posted, these texts can easily be reposted elsewhere, but the editor's provocation of spontaneity and emotion du jour of a shocked or opinionated reader will not be captured realtime, as it was. The disappearance of over 90 priceless comments to that EDN editorial and topic were erased and that's the issue here - EDN muzzled its readers' opinions. Smacking your customer, something I was taught as a teen in my first ever job by a master craftsman as a no-no, seems to be in vogue in all this.

jonathan nathan
Posted on Apr 7, 2009 at 8:20

Just wait until 2010, when the next big chunk of the 1.5 billion dollar long term debt (LTD) is due. That chunk of bonds will be about $250M. At that point, with the collapsing revenue month-per-month at National, there are three realistic options: (1) Issue more stock, thus causing the shares to collapse (again); (2) Refinance the LTD again at a higher interest rate - and credit rating will take another hit; (3) Cut costs via layoffs and shutdowns (again).
The cash reserve situation is not good. TI alone has about 1-2 billion in cash reserves, while National cash reserves are getting thinner by the week. National is saddled with over a billion of LTD, while competitors like TI have ZERO LTD.
Even odds in 2 years that National will be forced to merge or will be bought outright. Don't worry about Brian Halla and his cadre of buddies (Don , Lewis, Dennis M). They will get their golden parachutes and jump from the ruined company to their next gig.

Lee Goldberg
Posted on Apr 7, 2009 at 6:33

I am sad to say that I just verified that the two editorials on the National layoffs that had been published on the EDN web site are now missing. It's a pity too because the authors Paul Rako and Loring Wirbel provided some valuable insights on the situation. The other unnerving aspect is that the suddenly-empty spots in the blogs seem to have National's fingerprints all over them. While I don't have any conclusive evidence, I cannot believe that the publishers at EDN/Reed would pull down the opinions of well-respected editors unless there was some stiff external pressure applied to sensitive parts of their anatomy.

The only bright spot here is that Loring Wirbel is trying to reconstruct both columns and post them on his private blog - The Icono-Comudgeon-Clast iconocurmudgeonclast.blogspot.com/. I expect they will be up by the end of today if all goes well.

y_ditchi2chi
Posted on Apr 6, 2009 at 23:00

I was reading the Yahoo finance board and came across this post http://messages.finance.yahoo.com/Business_&_Finance/Investments/Stocks_(A_to_Z)/Stocks_N/threadview?bn=12867&tid=52579&mid=52596 Paul wrote about Bob Pease, who we all know about, but I was wondering about this Tucci fellow. Found this http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/1999/02/01/BU78272.DTL and it says he was a Director of System Products Design. Seems like the last guy you want to layoff if you really want to be a system company.

bite the hand
Posted on Apr 6, 2009 at 22:50

With all due respect to Mr Monticelli (wow, CTO's read this stuff!), having a "chip or two" along with those blue app note databooks of the old days to go with them means that NSC's customer's could build the systems to be deployed in Solar. NSC's grab for making complete systems means it's current customers, those that buy "one or two chips" and integrate there own "secret sauce" will be subsidizing there own long-term demise. How will NSC survive the transition when customers realize that MSC is out to compete with them? I also suspect, again turning to SolarMagic, that most of the shading power management could be done with a MicroChip dsPIC microcontroller (digital, with some A/D and D/A/PWM interfaces and a smattering of low threshold MOSFETs and not much else, as most of the decisions and complexity of shading power management is in the microprocessor (which NSC does not make) and software. If thats the case, how is this example "analog intensive", apart from the Kool-Aide NSC have apparently been drinking? And one more sign of a dinosaur is a lack of agility and excess momentum - Solar, with the drop in economy and oil prices, is **dieing*: http://www.cleantech.com/news/4297/ldk-stock-spikes-despite-morgan-sta Clearly those 1725 people NSC dumped last month won't be buying solar panels.

Dennis Monticelli
Posted on Apr 6, 2009 at 20:34

I sense in your blog that National Semiconductor is a company you care about. I do too, having spent nearly 35 years and my entire career here. As CTO, innovation is my job, yet you imply that our best years are behind us. Nothing is further from the truth! We have a large core of technologists that are working on solutions to some of the most challenging system problems of the future. National will address those challenges both with best-in-class functional blocks (like those that carry the PowerWise label) and complete solutions that draw upon our legacy of high performance analog design. The key to both paths is understanding the overall system challenge and then thinking creatively. Consider SolarMagic for example. National has done nothing less than to rethink and redesign the electronic architecture of photovoltaic systems. Frankly, if we just provided that industry with a chip or two, it wouldn’t have met needs. Fast growing solar companies need a complete solution to maximize the energy harvest from arrays. We listened, we learned and we have succeeded. National is shipping SolarMagic modules this month. Our purchase of ActSolar, a company with complementary technology, expands our innovative team and they share our vision to optimize solar installations of all sizes.

I have been closely involved with SolarMagic since its inception and am proud of my company for having taken a leading position in the renewable energy field. SolarMagic is but one example of several thrusts at National that apply our expertise to the creation of analog intensive solutions that will affect our very quality of life. At National we’re moving forward not backward. The next 50 years will surely be different, but they will be exciting and full of innovation.

Dennis Monticelli

tube man
Posted on Apr 6, 2009 at 16:26

Some interesting info on "NSM" here:

http://messages.finance.yahoo.com/Stocks_(A_to_Z)/Stocks_N/threadview?m=tm&bn=12867&tid=52610&mid=52614&tof=1

here:

http://messages.finance.yahoo.com/Stocks_(A_to_Z)/Stocks_N/threadview?m=tm&bn=12867&tid=52579&mid=52579&tof=8&frt=2

and here:

http://messages.finance.yahoo.com/Stocks_(A_to_Z)/Stocks_N/threadview?m=tm&bn=12867&tid=52579&mid=52596&tof=8

You also saw it here first, comrades. EDN's Paul Rako's "Anablog" on Bob Pease's layoff got muzzled, censored, pulled, despite being in the top five commented blog topics for him a few weeks ago - who pulled it and why? Why are the voices of the engineering community being muzzled and by whom? Try and click on the Google findings here after fashioning yourself a nice, aluminum foil haberdashery:

http://www.google.com/search?hl=en&safe=off&q="National Semiconductor lays off Bob Pease - Anablog - Blog on EDN"&btnG=Search

I heard on the street that almost the entire non-audio amplifier marketing team was let go (not sure if it is true, but that is the rumor), one of their largest revenue producing lines, yet a profit was declared and dividends were paid out for the quarter.

This editorial invites more questions than answers, IMO. Is Wall St happy with all this executive pandering for short term "profit" and dividend payouts? Was buying back stock $10 ago a wise use of cash by the CFO, or was it better placed in R&D for company growth, versus geezer exec
bailout maximization?

The only way I can see that these talented employees could be "redundant" is if NSC had others that were already doing the job - this all smells like a buyout is in the works, but that infers strategy and intelligence and is something that usually happens after the ink is dry on the deal. Maybe it will happen sooner than later if there is no deal in the works with the debt and revenue prospects laid out here and on the Yahoo Finance message boards.

Meanwhile, a lot of talent and technique exported from NSC to the likes of Xilinx, Maxim, and others. Xilinx will now get a clue how to make a decent SERDES. having picked up NSC talent in this latest "resource action".

Speculation and personal opinion from the outside here, nothing more.

marketing maven
Posted on Apr 4, 2009 at 2:10

Silicon Valley is as guilty as Wall Street of inflating the fat cats at the top at the expense of the diligent and productive worker bees at the bottom, in my opinion. Compare the disparity between median - or even well-compensated workers - and CEO income in Europe, or in any other global region, with the disparity here in the U.S., and the gap will make your head spin to rival Linda Blair in "The Exorcist."

It's time we started rewarding real innovation and ingenuity across the board, rather than continuing to fatten the already-bloated layers of largely-clueless management.

Rewarding failure is SO 20th century....