Customers, suppliers and employees recently learned a lot more about the principles that guide Tower Semiconductor Ltd. Chief Executive Russell Ellwanger.
Ellwanger provided some unique insight into his leadership style and outlined his vision on growing the chipmaker’s revenue to $1 billion a year by 2014 during a keynote at the company’s annual global symposium Nov. 2 and 3.
“Clear, simple messages energize people and inspire them to action,” he told a packed house at Jazz Sem-iconductor Inc., the company’s North Am-erican headquarters in Newport Beach.
Ellwanger was quick to cite the writings of former General El-ectric Co. Chief Ex-ecutive Jack Welch as he reviewed his tenure and looked forward.
When he took the reins in 2005, the chipmaker had about $100 million in annual revenue.
Today the company, which operates under the brand name TowerJazz, posts yearly sales of more than $500 million and is considered one of the top specialty foundries in the world.
Specialty foundries process wafers that contain chips designed by customers.
TowerJazz’s customers include local chipmakers Conexant Systems Inc., Mind-speed Technology Inc. and Skyworks Solutions Inc., among others.
Ellwanger attributes the company’s recent growth to some key decisions made shortly after he took the helm.
When the recession hit, many companies consolidated operations to reduce headcount and costs.
“All that does is slow down the activity of customers,” he said.
Another Approach
Ellwanger took a different tactic and decentralized research and development, product lines and business units to give more control to customers and local managers.
“It’s very critical, whatever priority, they have the resources to make it happen without having to go through additional negotiations,” he said.
Unlike some chipmakers, TowerJazz managed to grow through the economic downturn.
Industry Veteran
Before joining the Israeli chipmaker, Ellwanger held several executive positions at Santa Clara-based Applied Materials Corp., the world’s largest semiconductor equipment supplier.
TowerJazz is Orange County’s second-largest chipmaker based on annual sales, behind Irvine-based Broadcom Corp.
Microsemi Corp. in Aliso Viejo will likely overtake TowerJazz for the second rank among local chipmakers next year. Microsemi paid $633 million for Canadian chipmaker Zarlink Semiconductor Inc. in October. The deal puts Microsemi on pace to reach $1 billion in annual revenue.
TowerJazz employs about 700 workers and makes nearly 300,000 wafers per year at its sprawling campus on Jamboree Road near the University of California, Irvine.
In addition to the Newport Beach facility, TowerJazz operates two chip factories in Israel and one in Japan.
It acquired the Japanese chip plant in Nishiwaki last June from Boise, Idaho-based Micron Technology Inc., paying $140 million.
TowerJazz currently makes some 840,000 wafers annually. With the additional capacity in the Japan plant and continuing demand, TowerJazz expects to cross the million-wafer mark next year.
Focus on Performance
While some of Ellwanger’s guiding principles are grounded in corporate responsibility and occasional dashes of altruism, he made it clear that performance counts.
“Don’t spend time on poor performers,” he told the audience. “Identify your stars and spend all your time with them. Give them big opportunities and high visibility, and you’ll only have a group of stars.”
TowerJazz has regular meetings to identify employees with high potential. It then sets growth paths for them, according to Ellwanger.
Self-confidence is indispensible and drives the culture, Ellwanger said, taking another page from Welch’s playbook.
“That really is the big charter of the company, to make sure people go home confident and not frustrated,” he said. “They go home with absolute satisfaction and become a better father, a better mother, a better husband and a better wife.”
Ellwanger ended his presentation by pointing to an empty space next to a final bullet point included in his presentation.
“Please fill it,” he told the crowd.
