Silicon Valley's maverick speaks

Silicon Valley faces the threat of losing its position as the technology hub of the United States and the rest of the world. T.J. Rodgers is not convinced by this view.

Cypress Semiconductor Corp. founder and outspoken investor, Rodgers, said he would not want to work or start a business anywhere else. It may surprise anyone familiar with Rodgers' staunch libertarian and conservative views and his liberal stance.

Rodgers told the Business Journal that he and his vineyards in Woodside were a place where people start companies.

The Wisconsinite, who holds a Dartmouth College degree in New Hampshire was drawn to California by The Beach Boys' surf music from the 1960s and the chance to study electrical engineering and physics at Stanford University. I could imagine myself on the beach doing cool stuff at the weekends. Rodgers, referring the state beach located south of Half Moon Bay, said that he was unaware that he would need a suit to swim at San Gregorio.

Thurman John (T.J.) Rodgers

Scientist, tech founder, and investor

Age: 75

Hometown: Oshkosh,Wisconsin

Residence: Woodside,California

Family: Valeta Massey, wife

Dartmouth College, 1970 B.A. Stanford University (1973 M.A. and 1975 Ph.D.

Rodgers' career began in 1982, when he founded Cypress Semiconductor Inc. after working at American Microsystems Inc. and Advanced Micro Devices Inc. He was CEO of the San Jose-based chip company for 34 year before focusing on investments. Rodgers founded Clos de la Tech - a pinot noir winery and vineyard - and owns businesses in the hospitality industry in Wisconsin.

Rodgers, while studying at Stanford University, invented a chip that earned him a position at American Microsystems Inc. When that didn't go as planned, he moved on to Advanced Micro Devices Inc. After stints at AMI and AMD the young, brash man that Fortune magazine named "America's Toughest boss" in 1993 wanted to be able to run his business the way he saw fit.

Rodgers launched San Jose's Cypress 11 years before Fortune gave him a slogan. He amassed more than 7,000 patents in his time there. In 2016, he stepped down as CEO aged 68 and won a proxy fight against the company that he founded regarding how it was managed after he left. Infineon Technologies AG, a German chip giant, acquired Cypress in 2019 for $9 billion.

I read technical books and solve technical problems. This is what I like. This is what I do.

Rodgers, in our interview from last month when we discussed his views about business and the global economy, reflected on what has changed. This Q&A includes excerpts of that discussion which have been edited to make it more concise and clear.

What's the difference between Silicon Valley as you knew it and what you see now? The principle -- that smart money is given to smart people who start businesses -- hasn't really changed. Artificial intelligence, biology and genetics are some of the new fields that people work on. The idea of starting a business and living in an area where it's considered a good thing to do remains the same. California was liberal then, but in the traditional sense. It's gotten a lot liberaler and more devoted to big government than before. It's not something I like, but I'm not bothered by it because I'm just not involved in such things. I am still involved in startups, I invest in startups and I enjoy learning.

Why? It's okay that they don't do the same things as we do. As an example, I sit on the board of two Boston-based companies. Boston, a major financial center and MIT's technical university are both world-class. When you search Greater Boston, there's no sign of the new Intel or Google.

When a company that has a long history in California gives the finger to California and moves their headquarters out of the state along with 237 others, you know something is going on. You can fail, they're saying. The interesting thing about all the things they reject -- like government interference and high taxes -- is that none of them really matter. This is the same bureaucratic nonsense you'll find anywhere. We have better meddlers in California than anywhere else. California's core success, which is smart people, money, and companies, hasn't altered.

Is it true you turned down a job at Intel offered by Andy Grove (co-founder of Intel) early on in your career? That's true.

Why did you do it? Why did you do that?

What happened? What happened? We were rolled by tanks. But I made all this stuff by myself. I was alone. Some people wanted to bring me on.

I had interviews with Intel, American Microsystems, and Fairchild. I was surprised to see a lot of bureaucrats in large offices with expensive furniture at Fairchild.

Grove was the person I spoke with when I interviewed at Intel. He told me, "here's our work, this is what we do." He was straightforward and very clear. But I thought he's a hard-asses. I won't have the same freedom as I did at Stanford, to do what I want to do. This guy is tough.

I then went to AMI and found some nice people with whom I could work. They offered me a contract, and they paid me royalties for the technology that I developed. I made money. It was AMI and not Intel. At the time, it wasn't obvious who would win and I made a wrong decision. Intel destroyed our technology during the five years that I worked at AMI. They also wiped out the division in which I worked.

I chose to work for a business where I could gain business knowledge, because I am a techie. Then I went back to Intel and interviewed with Gordon Moore. Also, I interviewed with AMD (Advanced Micro Devices Inc.).

I can still remember my first day at AMD. It was obvious that we were a good fit. I had interviews with everyone at my director level (one layer below VP). Next, I met 'The Man', Jerry Sanders. The words framed above the doorway of his office read: 'Yea I have walked through valley of death but I fear no evil because I am the meanest daughter of a bitch' So, I'm thinking I like him. When I entered, he looked like a salesman. I danced from that room. Jerry is still living and I see his every once in a while. I rejected Intel twice.

What do you make of the current campaign to restore chipmaking in America? It will fall flat. Those are political decisions, but there is no Democrat or Republican electronic. It's really simple. You'll make mistakes if you don't face the truth about what you have to do, and whether or not you can actually do it.

We built fabs (at Cypress) in San Jose, Austin, Texas and Minneapolis. I once waved an American flag, saying that we would do all assembly and testing here in the U.S .).' We automated our machinery because at the time, foreign workers earned a dollar an hour while American workers were earning $5 or more. We had to reduce labor costs.

By 1993, this didn't work any more. Every unit we sold was losing us money. Our stock fell from 20 to 12 units. Five groups of attorneys sued us for fraud. It didn't really matter that they were calling for money. It was lawsuits that I had to handle.

We were doing something that wasn't right in San Jose. It turned out that we were the last company (of chip makers) to stay in San Jose, but it was not right. Penang in Malaysia is likely the center of assembly and testing for chips around the world. Because they have dozens of factories, they can operate automatic machines more efficiently than we can. They have a better quality culture than we do. You have quality issues to solve. I finally caved and built an operation in the Philippines that is still operating.

It's important to remember that you will win if you are able to do something better and cheaper than someone else. It is foolish to try and fight that. Right now, the money is made by designing chips and not manufacturing them.

Arguments that we should make them in the United States for defense are a waste of time. Defense chips are 10 years behind. For military purposes, you don't even need the latest chips. This is just a place for people to spend their money.

You may not believe climate change is man-made, but you've been involved with cleantech companies such as SunPower. Isn’t that a contradiction? First of all, yes, the Earth today is warmer than in 1960. I agree that CO2 has increased from 260 parts per million to 420. The increase in temperature is probably the result of the greenhouse effect. What's the point? You can get some nasty stuff if the trend continues.

I don't buy the story about water rising. In the Wall Street Journal, a story was published less than a week ago about the water levels in New York Harbor. The data has been collected for 250 years. It has not gone up. The data in that chart is a straight line. I don't trust the people who claim to be able to give you kinglike power to tell you what to do. This is the real truth.

After saying that, will I argue that it would be better to not produce as much CO2? No, I won't argue that. Will I argue that your right to believe that, for example, if you could get energy from the sun instead of burning petroleum, it wouldn't good? This is not a religious issue for me. I won't force my beliefs on you. I respect my customers.

Do you want a solar cell? I manufacture solar panels. SunPower was founded by me and I was its founding chairman when it went public. Complete Solaria is another solar company that I have invested in. I am on the board for another company in Rochester, New York called SunDensity. I've got a lot of money invested in it. You want to purchase solar panels? You want to use energy produced by the sun? You're all right with that. I'll literally work for you.

I will make a product of high quality that will meet your needs. I won't demand that you share my values.

Complete Solaria is the second public company in which you have a stake. It is a SPAC. Enovix was made public through a merger with another SPAC in which you were involved. Many people say that the time for SPACs is over. What do you think about this? This is a messy and sloppy way to finance. It's sometimes better than the alternatives.

I wanted Enovix to go public. The company was an advanced battery manufacturer that needed to construct a factory. Nearly $500 million was needed. SPACs can help you achieve this.

Today, I will not rant about the many inequities of IPOs. The bank is the one who does the initial public offering. They are the old-timers that sell the stock of great companies to their most loyal customers. Stocks usually appreciate on the first day, resulting in a profit for a group within 24 hours. Many banks are arrogant, and difficult to deal. I decided to do my own IPO (and raise some money) by taking a SPAC publicly. We can't know where the money is going and can't predict it.

Between the SPAC, and the PIPE I ended up giving (Enovix), over $400 million. The company built a fab and is currently building another one. It's clear that waiting an extra year to go public via an IPO was not the best thing for this company. Would I do another SPAC? Would I do another SPAC again?

They have been around a long while and became very popular. After starting at $10, the average SPAC is now down to $1.50 and 90% don't succeed. We now have people who say SPACs are a bomb, but this is another misrepresentation of reality. It's for this reason that I do not like investing in religion or secular faiths. Look at the fundamentals to see if they are good.

Complete Solaria is the second company to go public via an SPAC. It is a solar-panel company in need of money to build a fully automatic plant in the U.S. This time, despite my previous lecture on manufacturing in the U.S. SPAC is a company with high integrity, and has $345 million. They rejected 90 companies before deciding to merge with us. The perception of SPACs changed from "this is how the world will function" to "only crooks use SPACs." Both were false in my opinion. In both of the cases that I was involved in, SPAC served a purpose.

You are also a Silicon Valley Winemaker with Clos de la Tech. How did you become involved? Wine is a very technological industry. Here's a vineyard of one acre, where they make the best pinot noir. The grapes are Dijon clones. Genetically certified. These are real, authentic French Burgundian Clones.

The muse departed in 2006. The winery had been a fascinating place to visit before. It was almost as much fun as going to the movies. Valeta Massey (his wife) now runs the winery, and she is really good at what she does. She and I both work together, but she knows how to make the wine better than me.

Many people have talked about the importance of diversity, especially in technology and venture. Do you believe it is important to address this? I have never had a lack diversity stop me from doing something or preventing any company that I am associated with. Some careers have diversity, and others don't. There are many women in the law. This is primarily about what you want do when you are older.

Since years, they've been pursuing Silicon Valley on diversity. I did a quick analysis of the number women who graduated from Stanford's Electrical Engineering Department. There were only four or five women in the department when I graduated. So I concluded there wouldn't be many women in corporate leadership positions, even if all of them were presidential material.

What advice would you give to someone who wants to start a company in Silicon Valley? Attend school and learn important things. Today, there are more distractions at school. You can get a degree but not be hired. Learn something that is important. If you live in Silicon Valley, then learn something relevant to the current technology. Be really good in school. Work hard. Work for a company you admire. A company that is doing something that really matters. Their software works. You're way ahead of everyone on some machine, or in some knowledge. Find out what makes them so good.