It struck Dwight Decker how much spare time he had after retiring as chief executive of Conexant Systems Inc. in February.
After all, he’d been running Conexant since before its 1999 spinoff from Rockwell International Corp. and sold many of the chipmaker’s divisions, including Mindspeed Technologies Inc., Skyworks Solutions Inc. and others.
Decker stepped back from daily operations at Conexant when it bought Red Bank, N.J.-based GlobespanVirata Inc., a maker of chips for high-speed digital subscriber line modems.
As part of the deal, Globespan chief executive Armando Geday took over running Conexant and the company’s headquarters moved to New Jersey. Decker became chairman.
At a recent Orange County Technology Action Network event, Decker reflected on semiretirement: “I’ve had time to read the paper. I never had time for it before.”
Decker also had time to delve into the Orange County Technology Action Network,Octane for short. The group is his pet project, designed to build and sustain interest for local technology businesses.
He didn’t know it then, but Decker’s extra time soon would be a memory.
Two weeks ago, he again was named Conexant’s chief executive, and charged with turning around the struggling company. One of his first moves was to shift Conexant’s headquarters back to Newport Beach.
The undoing of Decker’s retirement came the day after the Octane event, when Conexant’s board met.
“There was a lot of discussion about our continued poor performance,” Decker said. “I must say, I was dismayed at the prospect (of returning as chief executive). At the outset my plan was to be the chair of Conexant, Skyworks and Mindspeed and to help to guide those businesses.”
Now Decker said he is “really energized.”
Conexant designs chips for modems, satellite TV set-top boxes, game consoles and wireless networks.
When Decker orchestrated the GlobespanVirata buy,and his pullback from running things,the longtime chip executive thought his hard work was finished.
One Wall Street analyst who asked not to be named said Decker was mad that he’s had to come back to fix the company.
“He was hoping to sit back in the Caribbean with a drink in his hand,” the analyst said. “There’s no question he feels passionately about this company.”
Such is the life for Decker, who’s become one of tech’s strongest cheerleaders in OC. But Decker’s move back to Conexant’s helm could be a blow to his extracurricular activities, which includes work for the University of California, Irvine.
Decker’s also been working hard on Octane, which is looking to revive interest among local private investors and entrepreneurs. The organization recently held an event that was well attended,due largely to personal calls from Decker to attendees.
“He’s called me at random hours, times when he meets people that might be instrumental for us, maybe if he meets a particular company or venture capitalist,” said Gary Augusta, Octane’s executive director.
In the past few weeks, Augusta said he hasn’t heard much from Decker and he doesn’t expect to, due to his renewed involvement with Conexant.
“I would say in the short-term, that’s true,” Augusta said.
For his part, Decker said Conexant will dominate much of his time.
“It will have to,” Decker said. “But I’m also going to prioritize Octane and UCI.”
When Decker engineered the GlobespanVirata buy,something that had been in the works for at least a year prior to the deal’s 2003 announcement,Conexant’s fortunes looked bright.
The deal combined Conexant’s cash cow business of chips for modems and fax machines combined with GlobespanVirata’s chips for DSL gear.
The company also had a foothold in wireless networking with GlobespanVirata’s acquisition of the wireless business of Milpitas-based Intersil Corp.
But the company floundered under 38-year-old Geday. The executive, who worked with Decker at Rockwell Semiconductor Systems and helped build GlobespanVirata into a key DSL chipmaker, took his knocks for not communicating with Wall Street
“From an analyst’s perspective, he didn’t do a good job of setting expectations for analysts and investors,” said Dushyant Desai, an analyst with brokerage C.E. Unterberg, Towbin. “That happened twice,in a row. The June quarter was the biggest surprise.”
That was when Conexant posted a net loss of $71 million on $268 million in sales.
Decker’s No. 1 job now that he’s back? Making Conexant profitable, analysts said.
And that’s no easy task.
“His big challenge is going to be to complete the Globespan acquisition,” Desai said. “That hasn’t gone as well as they’d hoped.”
Wall Street respects Decker but realizes his return is just a temporary fix.
“Clearly the board of directors is taking an active role in driving the company back toward profitability and eventual growth,” said Brian Alger, an analyst with Pacific Growth Equities in San Francisco. “While we have a great deal of respect and confidence in Mr. Decker, we believe the present challenges will require some evidence of plan execution before we get more bullish.”
At the bare minimum, analysts said, Decker brings immediate stability to the company.
“Decker at least has continuity. He’s been there for a long time,” Desai said.
Decker has gone out of his way to note that his move to the helm of Conexant is temporary. But it’s unclear exactly how long that’s going to be. It could be at least a year before Decker is able to resume his retirement, according to analysts.
The sticking point: the coming executive search. Unlike Irvine-based rival Broadcom Corp., which recently finished its chief executive search with the hiring of Scott McGregor from Philips Semiconductors, Conexant has much less to sell potential candidates on.
The market for chief executives traditionally is tight, as evidenced by Broadcom’s search. The company continually made overtures only to have them rebuffed by candidates who were happy where they were.
“Broadcom is a growth company,” Desai said. “Conexant is essentially a turnaround story. They’re going to have to bring someone in that will be able to keep it stable.”
So far, Decker has gotten back to his old methods.
He’s already detailed plans to cut some of Conexant’s 2,350 jobs in an effort to trim its operating yearly costs by $15 million, or 16%.
He’s also going to farm some of the research and development done in Europe and North America to Conexant facilities in India and China.
The cuts are set to come on top of prior cuts. Conexant has trimmed about 500 jobs since the GlobespanVirata deal was unveiled a year ago. Last week, Decker replaced the company’s senior management ranks with a crew of old Conexant executives.
