Is cash king?

The CEO roundtable at electronica is usually good entertainment, although not a patch on similar events at DAC, where the participants can usually be relied upon to have a good verbal punch up. This year's roundtable brought together three ceos – Peter Bauer from Infineon, Carlo Bozotti from STMicroelectronics and Rick Clemmer from NXP – and Henri Richard, Freescale's chief sales and marketing officer, a late substitute for Rich Beyer. The roundtable addressed the financial crisis and the lessons – if any – the semiconductor industry could learn from the last two years. The general response from the panel was 'not a lot'. All four participants agreed the financial crisis and its effect on the semiconductor industry was something over which they had absolutely no control. They also agreed this was nothing like the dot com bust of the early 2000s. That was entirely the industry's responsibility for developing and manufacturing products for which there was no market. Reading between the lines, the senior execs believe the semiconductor industry has grown up since then. But others may wonder quite what it has grown into. It's a theme that has been explored over the last year or so in these pages. Partly, the industry has changed due to the rise of the foundry, but some industry watchers say this change in outlook is because managers are now business, rather than semiconductor, people. Infineon's ceo Peter Bauer described this new world. "We are cash focused," he pointed out, "and all companies take action to get cash from working capital. This meant we had an empty supply chain when demand was picking up. We are victims of our execution excellence." But should semiconductor companies be better at cash generation than they are at product definition and manufacture? That question was not asked.