The drama unfolding within the boardroom of International Rectifier over the last year wouldn't have been out of place in a big-budget HBO series, with fraud investigations and takeover bids. Now that Oleg Khaykin is at the helm, the company hopes to put all that behind it and concentrate on what it does best – making power components.
It is no secret that International Rectifier has gone through a difficult 12 months, and I guess that developments in recent weeks have only added to this. Since taking over as CEO, what have you done to try to restore your staff’s confidence in the firm?
Yes, the company has had to endure several trials and tribulations over the last year, but this has only helped to galvanise us. Now we are looking to move on and refocus our efforts on creating innovative power management solutions. Upon beginning my tenure as CEO, I decided to embark on a world tour visiting our operations in Asia, Europe and North America. I made a point of trying to meet nearly every member of the company’s staff who was involved in either engineering of customer facing (sales, marketing and FAE) roles. This allowed me to gain a true understanding of what makes International Rectifier tick, and to boost employee morale in the process. I think that we are now motivated fully to face the challenges ahead.
For 60 years, International Rectifier has effectively been a family-run business. Do you think that getting away from this was an important stage in the company’s development, and will it benefit in the future?
The company has a long history. It is one of the oldest in the semiconductor industry, and has been listed on the New York Stock Exchange for approximately 50 years. Though our founder, Eric Lidow, has now retired as chairman, his legacy will still be felt within the organisation, and the values he instilled into the firm will continue to have importance. Every company has to go through this sort of metamorphosis. We are entering an exciting new phase in International Rectifier’s development.
What made you decide to join International Rectifier?
I was attracted to the company because of its advanced technology, rich history of technological innovation, industry-leading product portfolio and strong customer base. I expect us to leverage those assets to drive growth of existing and new products and technology platforms, even as we drive to improve our operational efficiencies and organizational effectiveness.
Developing new and innovative power processes is a key way of differentiating the company from its competitors. Do you think your background in the test/manufacturing side of the industry has given you useful insight here?
My broad experience gained from other businesses and industries covers a wide range of key areas including strategy, marketing and product marketing.
Are there any particular areas of expertise that you have gained from your previous positions that you feel would help to drive the business forward?
I have gained a strong financial background and strategic development of end market dynamics from my past roles. These skills, together with the manufacturing and operational expertise that I have gained recently at Amkor Technology, will be key in steering International Rectifier moving forward.
Would you say that innovations within the packaging technology are now actually more important than the semiconductor processes utilised?
It is not simply a question of one vs. the other. The key is chip-package interaction to optimise performance. Innovation must include all of the important elements of design so it can truly address the power management challenges. Our iMotion product offering is a good example. By bringing digital, analogue and power silicon together with algorithms, packaging, development software and design tools we provide a complete solution that is quick and easy for customers to implement into their system designs.
International Rectifier sold off some of its trailing-edge technology operations to Vishay last year, in order to concentrate on higher margin leading-edge products. Is the company now rid of all its excess baggage, or are there still other parts that need to be rationalised? At the same time, can you see the possibility of new technology being brought in through acquisition?
The company had become somewhat defocused, and so it was felt there was a need to make sure that it concentrated on sectors where it could differentiate itself from the competition. We now have a large stable of innovative technologies and products and our pipeline for new products coming through is very rich, so I don’t see any reason for us to change that. As for possible acquisitions, if it makes strategic sense, then of course, we will contemplate it. We like to leave our options open.
Although the firm has a long history of utilising the environment as a major driver for the sale of its products, and this is increasingly becoming a factor in electronics system design here in the West, is this going to be the same in developing countries?
In India, the Tata $1,000 car is clearly going to be more attractive than hybrid alternatives, and in China the majority of the populace will look for the cheapest appliances and consumer goods, not the most energy efficient. Doesn’t that make whatever happens over here almost irrelevant?
With energy costs rising exponentially worldwide, energy efficiency is now becoming an important consideration for consumers when they buy electronics goods. They no longer look at the acquisition cost alone, they have to think about the operating costs that will be accrued over its lifetime too. This will be true of people living in developing countries just as much as in the West. It will affect everybody globally.
Server/data centre companies have put a lot of pressure onto the processor manufacturers to improve the energy efficiency and thermal management aspects of their chips. In turn they have produced very challenging roadmaps, which power IC firms like International Rectifier have to keep pace with. How closely do you work with the likes of AMD and Intel on such matters, and do you feel you are on track to deliver what is expected?
The data centre marketplace is an area where the company clearly demonstrates how we can help save energy and increase performance. Through close ties with the corporations in this sector, it has been possible to develop products like Xphase, DirectFET, SupIRBuck and our power monitor ICs that when combined, can deliver power management architectures and optimised chipsets to achieve the high efficiencies needed to meet the ambitious benchmarks they have set.
Over the last few years, International Rectifier has pushed its multi-phase motor solutions, and in the last 18 months has expanded this by introducing a multi-phase pump solution. How well have these been taken up by the industry, and how long will it be before such things are standard in European and North American homes?
These are breakthrough technologies that take some time for mass adoption to kick in. However, the early adopters are already recognising the significant energy-efficiency benefits that utilising solutions that can operate and differing speeds to match the operating requirements at that time can deliver. However, we are already working directly with many of the key appliance manufacturers in delivering energy-saving solutions, which are already in production and available to the consumer.
Company: International Rectifier
Established: 1947
Headquartered: El Segundo, Calif., USA
Employees: 5,400
Business: Power Semiconductor Devices
CEO: Oleg Khaykin
