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Perspective on TriQuint's Acquisition of WJ Communications
Source/Type:
Editorials
Author: Jo Ann McDonald, founding editor
May 28, 2008... Two historically pivotal USA-based companies in the compound semi industry
have officially become one. While some merely look at the recently completed
acquisition of WJ Communications of California by TriQuint Semiconductor of
Oregon as further consolidation of the wireless communications space, there's
much, much more to the story.
Back in March, TriQuint elected to acquire WJ Communications for $72
million. Both companies traded on the USA's Nasdaq stock exchange. At a special
meeting of WJ shareholders held recently in San Jose, the acquisition was approved
and the approximately 132 remaining members of WJ's team will evidently remain
in tact as a wholly owned TQ subsidiary. The members were apparently enticed to remain, thanks to a nice
new TQ stock option inducement. What WJ brings to TQ's current offerings in
technology will blend nicely, of course, and indeed the merging of the two makes
one less wireless GaAs player in a continually tightening field. It also adds
some simple but cool RFID technology to TQ's ever growing lineup of products.
Beyond the technological synergy, this is the classic cultural fit.
What makes this particular acquisition special is the history of the two companies.
Way back when... WJ Communications was much, much more than the relatively small
company it was up to the point of the acquisition. Back when it was Watkins-Johnson
and affectionately called, simply, "WJ"... hence, the origins of "WJ", it was considered the giant of the original GaAs-based microwave
technology companies. It had the GaAs-based microwave technology upon which so much of our CS industry is
now firmly based. Alas... as some of us have painfully learned, some giants
continue to rule, seemingly forever... and some don't.
The original "WJ" was to the early compound semiconductor field what
Fairchild Semiconductor was to the early days of the silicon semiconductor field.
(I know. I was there!) Everyone who was anyone in the fledgling
field of compound semiconductors back in the original days of the emergence
of the compounds (circa late 1970s and early 1980s, which then meant "advanced"
microwave technology) worked for WJ. That's when the term "MMICs"
came into being. For you relative newbies to the field, MMIC stands for Monolithic
Microwave Integrated Circuit. As it was explained to me back then, compound
semi ICs looked that looked very unlike silicon ICs. They built them in higher
and higher stacks, upwards, kind of like Hong Kong real estate. And they were
all analog devices that were "tweaked". Not as scientific nor digital
as today, but really fun to make. (Heck, everything seemed more fun back then.)
My introduction to WJ was via some of those who were to become the first to
fledge from WJ to form Pacific Monolithic. As a young (and very cute) tradepress
reporter for EE Times and a notoriously good pitcher, WJ let me occasionally
play on their softball team. (EE Times didn't have a softball team.) And I got
invited to their company picnics too. You got to know a company in a whole different
light when playing softball at night in Silicon Valley, and you got to know
the employees even better over mugs of beer as Silicon Valley softball nights
wore on.
So, despite the subsequent years of WJ getting smaller and smaller, and knowing
the individual employees less and less, I've always had a soft spot for WJ,
which admittedly is largely credited to their generosity in letting me play
softball and treating me to beer. Not too long after that, TriQuint came on
my radar screen with a similar corporate culture of generosity, warmth, inclusiveness
and ability to have fun at social outings. At that time TriQuint and Vitesse
were the emerging GaAs giants and you could see that WJ was gradually losing
ground to these upstarts.
Like I said earlier, WJ's history can be likened to Fairchild Semiconductor,
which today isn't anything like the original "rust bucket" company
it was in Sunnyvale in the "Hey Daze" of Silicon Valley. Back then,
Motorola in Arizona was stealing Fairchild employees right and left, and Fairchild
was sending spies to the San Jose Airport to see who was being lured away. As
the years wore on and companies like Motorola, National Semiconductor and Intel
robbed all the Fairchild national treasures and started their climb to the dominance
they subsequently enjoyed (and continue to enjoy) the original Fairchild became
history. Over the years, former WJ MMIC gurus left to do their own thing as
well, and the original WJ became history. Meanwhile, up in Oregon, TriQuint
became a GaAs MMIC powerhouse.
Back in the '80s, boy could TriQuint make its presence known! And the beauty
of TriQuint in subsequent years, under the leadership of Ralph Quinsey, did
what few have been able to do. It has remained a compound semiconductor powerhouse,
despite the trying times we've all felt or seen over the last few years. I always
believed that when any consolidation dust settled, TriQuint would remain standing
tall when others fell by the wayside. There's simply something about a company
that bases itself in sound leadership and corporate honesty and openness, especially
one that partakes on a growth path that sticks to its core values and offerings
and embarks on sensible gradual expansion that you just know it will
survive, and eventually thrive.
That brings us to current times and the vast changes that have taken place
in the ever-increasingly international field of wireless infrastructure. The
China wireless market is opening quickly, for example, and things are expanding
again at TriQuint as their Richardson, Texas plant moves to 6" GaAs and
the company further embraces GaN technology. A design center in Silicon Valley
and WJ's current business relationships will definitely come in handy.
As WJ's CEO, Bruce Diamond, put it: "We see great synergy with TriQuint
in the areas of technology, customer relationships and manufacturing efficiencies.
There is very little product overlap and a good cultural fit between our two
organizations. We bring a broad product line of RF building blocks and modules
as well as a talented Silicon Valley based design team to an established leader
in the RF market space.”
As the self-appointed compound semi industry historian, I thought you might
enjoy a flash from the past as to why I too believe the acquisition of WJ Communications
by TriQuint to be a great cultural match.
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