Ray Bingham & A conversation about a keynote ...
The North America Chinese Semiconductor Association met last Saturday afternoon in Silicon Valley. Cadence Design Systems Executive Chairman Ray Bingham gave the keynote address. I spoke by phone with Ray Bingham several days later about the event and he suggested that I could learn more about the NACSA by looking at the organization's website. In doing so, here is what I learned: "Founded in September 1996 by a number of semiconductor professionals in Silicon Valley, the North America Chinese Semiconductor Association is a professional organization dedicated to the advancement of and collaboration among the Chinese professionals in high-tech industries." "Riding the tide of a rapid high-tech industry growth, the community of Chinese engineers and entrepreneurs in Silicon Valley has gone through a tremendous growth in recent years. Serving the needs of these professionals for their career growth, through networking and information sharing, NACSA has been thriving in building a high-tech professional community with a Chinese heritage. With over 1000 members and still growing, NACSA is now one of the largest and most active professional organizations in the USA" "NACSA is an inclusive organization, open to anyone sharing with our common mission, which is to strengthen networking among professionals, to foster the entrepreneurship among ethnic Chinese, and to promote the exchange in the global semiconductor and information technology industries. NACSA's philosophy is learning by doing, networking by involving, exchanging by interacting, entrepreneuring by trying, and benefiting by contributing." ********************************* Prior to speaking to Ray Bingham on Tuesday, I received a copy of his prepared keynote address. Here are a couple of excerpts from the document: "Today we are living in an accelerating world. Change is happening much faster and on a much grander scale. Countries once labeled as third world, are becoming major players in global business. Just as the United States and Japan were the dominant economic powers of the late 20th century, countries like Brazil, Russia, India and China – the BRIC countries – are likely to become the powerhouse economies of the next 40 years." "Powerhouse economies are created by factors like a large consumer market. Almost half of the world's population of six billion people live in the BRICs. Other factors include quality education systems, the free flow of information and cost competitiveness and productivity. Work that once was exclusively done in America and Europe now is happening in these countries to take advantage of lower cost, trained workforces, with a strong work ethic. Stable government institutions have enabled a favorable climate for investment. And, that is evolving in the BRICs. The result is that investment is flowing in and these economies are growing at rates that will help them rival developed economies. These are truly the growth economies." Bingham's talk went on to detail developments in the BRIC counties, and to relate them to the needs and wishes of the growing markets and opportunities there. His prepared remarks included: "When I look at what's happening around the world, I see a lot of comparisons to Silicon Valley and how it developed back in the 1950s and 1960s. There were world-class academic institutions and brilliant scientists; venture capital; low regulatory barriers; and a great climate, a great place to live. These assets formed a "cluster" of resources – the things that were needed to attract investment and people, the things that build technologies into a sustainable economy. We turned an apricot and walnut economy into Fairchild Semiconductor, which then led to entrepreneurial expansion. Total semiconductor employment in Silicon Valley grew from 6,000 workers to over 60,000 today, even with all the outsourcing and offshoring, and it was the magnet that drew many of you here. Today, we are in a very dynamic industry, with many entry points. The BRIC economies don't have to go through all of those developmental stages that Silicon Valley had to." Bingham detailed various corporations now successfully playing in the Chinese market as suppliers, and as entities with design and manufacturing operations in China. Within that framework, he talked about Cadence's role in the semiconductor supply chain – the disaggregation of the supply chain and the virtual reaggregation that's required to produce such engineering marvels as the Apple iPod, which represents efforts and coordination across dozens of vendors, which all contributed pieces to the product development. He also talked about the numerous customers, programs, and efforts that Cadence is spearheading in many locations around the world, with an emphasis on Cadence in China. Towards the end of his address, there was a discussion of intellectual property protection: "I think that when you look at the chip business in China, you see it is blossoming. That's happening because of the opportunities of disaggregation, enabling people with ideas and skills to focus on their expertise and become a link in the design chain. In the old days of the vertically integrated chip companies, your range would be limited at best. Your company might have been a vendor, instead of having the partnership opportunity that China has today. The design chain succeeds because every link respect the intellectual property that others contribute – from education IP to process IP, from software IP to core IP, China can be a player in every segment of the design chain. But, we all know that IP protection has been a roadblock for companies wanting to do business in China." "Without the legal protection of intellectual property, the opportunities in China's semiconductor industry will slow down; it will cost them more to be in the game and will disadvantage them where they are otherwise so advantaged. Think of it as a branding issue for China. It can impact the scope of investment, the advancement of technology and the opportunity for education. Without adequate IP protection, investors will be more cautious, and will look elsewhere as India and Russia compete for the same investment dollars." "Let's work together on ensuing IP protection and ensuring that China takes its well-deserved position in the global economy. Economic development creates sustainable employment and leads to societal change. Market economies lead to improved standards of living, a strong middle class, and better opportunities for succeeding generations." ********************************* A conversation with Ray Bingham … Q – I'm not familiar with the NACSA. Is the meeting you addressed an annual one? Bingham – This was an annual meeting, presumably the ninth or tenth. As with most annual meetings, they elected a new board of directors. The profile of the people at the meeting were, by and large, youngish – 30-something, highly trained, technically oriented people. Perhaps they have one degree earned in China and they came here to do several more degrees at very good school. Most are working in the semiconductor industry, although there were some bankers, some analysts. They were a variety of people that are leveraging the fact that they're technical, they understand China and the semiconductor world to make new products, or start and finance new companies. The group is not just China focused, but the whole bridge of activities between here and China. These people bring a unique perspective [to the discussion]. Q – Have you addressed this group before, and how did you come to be speaking there? How did you decide what to speak about? Bingham – No, I have not addressed the group before, but I was quite happy that they invited me to speak. The broad banner of my talk was the development of the Chinese semiconductor industry. In general, they wanted me to talk about our views on the subject. Q – The views of Silicon Valley or the views of Cadence? Bingham – [with a great chuckle] Cadence's views – built on our experience and in particular my experience. I opened with a story about myself. I started doing business in China in 1981. I have a lot of experience in China, longer than most people of my persuasion, and even I am astonished today by what I see happening in the world exemplified by this NACSA assembly. [Here are] thousands of highly trained technologists on both sides of the Pacific Ocean working in a way that's changing the course of, and the center of gravity of most economies around the world. When I went there 25 years ago, China was just beginning to come around to the idea that they could compete in the world with highly engineered products. Then it was high-tolerance pressure equipment for chemical plants, and today it's some of the most sophisticated electronics in the world. The thesis of my talk was that this is an astonishing sea change. The four countries that make up half of he world's population will forever change the balance of economic and political power and this [process] continues to roll out – opening borders, freedom of information, and people around the world working to develop opportunities wherever they happen. Q – That's a great segue to my next question. I'm not familiar with the BRIC term. Bingham – I first heard the BRIC term in a speech given by a professor speaking about the leverage points that each of those four countries bring [to the global economy]. Q – So, would you for instance be traveling to Brazil in the future? Bingham – Brazil is on my travel calendar. When we choose to get involved in India, and more recently in China and Russia, the timing was important. You can get in too early. My sense today is that it's getting to be time to look at Latin America. Now we need to figure out how and where that would happen. Q – What about Russia? Do you have travel plans for Russia? Bingham – In fact, I have been traveling in Russia for the last year and half. I mentioned in my talk that we have now about 200 people doing R&D in Russia. We also have set up a very successful partnership with two of the leading universities – Moscow State and the Moscow Institute of Technology, where we've developed a curriculum in SoC design. We're about to graduate our third class form that program. Q – Is Cadence doing EDA tools R&D in these countries, or is Cadence partnering with IC design houses in China? Bingham – [To date], our biggest success has been in India. [Historically], their mission was low-cost engineering. But their team has developed beautifully. They still do sustaining engineering today, but they are also involved in developing products in each of our product segments. The Cadence team is now rated as one of the best employers in all of India, and by the end of the year we'll have 700 people there. We're not in Bangalore, we're up in Delhi which I believe is a distinct advantage for us. We're carefully developing a very strong management team. It's a group that's making a big difference at Cadence and across the entire electronics industry. In China, [the process] is at an earlier stage. We've been building our R&D presence for the last almost 4 years there. We have two R&D centers – one in Shanghai and one in Beijing. Q – I read a passage in your prepared remarks that said, "There's no such thing as a free lunch." Is it difficult to use a phrase that may or may not translate into other languages. Did you have an interpreter for your talk on Saturday? Bingham – That phrase got a good chuckle out of the audience. I thought about that before hand, but decided to use it anyway. The talk was given in English – everyone there was an English speaker. Q – How was your talk received – in particular your comments on protection of intellectual property rights? Bingham – I worried about that topic of IP, but took counsel from the group's organizers who strongly encouraged me to address the topic – to be front and center about it. During the Q&A session after my address, there was good response. It's very clear to me, and increasingly clear to the Chinese, that fixing this image of being renegades around IP is a very important branding issue for China. As long as the first thing that a CEO thinks about before doing business in China is that they'll misuse what I have, people will be reluctant to fully embrace cooperation with their Chinese counterparts. Just look at companies in the IP business, and you can see how different their engagement is in China, versus with other countries in the developing world. They'll cooperate a little, share a little – but if they have to be tentative about [the process], they can't move as fast or as decisively. The way to emphasize this point is to say if you're really trying to build companies and industries in China, if you want to develop your own IP, suddenly [the idea of intellectual property protection] will become very interesting. People will quickly conclude that it's within you own interests to promote an environment and culture that deeply respects and aggressively promotes protection of IP. Only fly-by-nights, who don't want to help anybody, would want to play the game in any other way. Q – Overall, how was your talk received by your audience? Bingham – Extremely well! I was absolutely charmed by the energy and openness of these young technologists and how eagerly they are embracing the opportunities available to them going forward. *********************************
Peggy Aycinena owns and operates EDA Confidential. She can be reached at peggy@aycinena.com
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