SUCCEEDING A COMPANY'S FOUNDER IS NEVER easy.
Thats what Abhi Talwalkar did when he joined LSI Corp. as
president, CEO and director in May 2005. Milpitas,
Californiabased electronics pioneer LSI had fallen
on hard times, and long-standing investors were clamoring for a
Wilfred Corrigan, the British-born engineer who had run
Fairchild Camera and Instrument Corp. considered
the birthplace of Silicon Valley launched the business
as LSI Logic in 1981 with $6 million in venture capital.
At the time, major U.S. and Japanese corporations ruled the
electronics industry. LSI Logic focused on customized silicon
chips, a niche market; by the late 1980s it dominated the
business. Early in the next decade, it began offering systems
and design tools too. Between 1998 and 2003, LSI acquired a
dozen companies and broadened its product lines as the
semiconductor business contracted. When revenue plunged in
2003, the company cut costs and jobs.
To put LSI back on its feet, the board replaced Corrigan
with Talwalkar, then cogeneral manager of Intel
Corp.s digital enterprise group, which included the
semiconductor giants corporate client, server, storage
and communications businesses.
Talwalkar inherited a company that had expanded into
everything from networking to consumer goods, including
video-processing chips that went into DVD players and the Sony
PlayStation video game console. With so many products, it was
no longer on the leading edge of anything. But Talwalkar
foresaw that people would increasingly use smartphones and
other mobile devices to do things like post to Facebook and
watch movies. So he decided to reinvent LSI as a specialist in
semiconductors and software that would help meet the surging
demand for data storage and networking. Rather than spend
billions on fabrication plants, the company would streamline
the design of its chips and outsource manufacturing.
Talwalkar has been busy: Between May 2006 and this January,
he sold, acquired or merged 14 businesses. One of the biggest
sales took place in late 2007, when LSI unloaded its mobility
products group to Germanys Infineon Technologies for
$450 million. Last year LSI, which now has 4,700
employees, began to turn around. Revenue grew 9.3 percent, to
$2.04 billion, while the semiconductor industry was flat
overall. When Talwalkar took over, LSI stock stood at $6.13;
late last month it traded at $8.66, a 41 percent increase.
The 48-year-old Talwalkars family moved to the U.S.
from Pune, India, when he was five. He spent his early years in
Boston and Portland, Oregon. The Oregon State University
electrical engineering graduate worked at a slew of start-ups,
including Bipolar Integrated Technology, Lattice Semiconductor
and Sequent Computer Systems, now part of IBM Corp.
Talwalkar joined Intel as a contractor in 1993 and rose to
oversee one of the Santa Clara, Californiabased
companys main business lines. A skilled and fiercely
competitive Ping-Pong player, he installed tables at all of
LSIs campuses and started a tournament that now includes
1,000 participants. Senior Writer Julie Segal spoke to the CEO
in New York last month about his turnaround of LSI.