There are only a handful of leaders in Silicon Valley who can claim a genuine front row seat at the introduction of groundbreaking new technology that would reshape the world. Richard “Dick” Elkus, Jr. is one of them and he’s seeing the mistakes of the Valley’s (and the nation’s) past being made all over again.
Elkus owns a long and stellar career in the technology industry, spanning over 50 years and including senior level positions in KLA-Tencor and Lam Research. He has served as Chairman of the Selection Committee for the National Medal of Technology (awarded each year by the President of the United States). But it was the first decade of his career when he worked at Ampex Corporation that would shape his view of the successes and failures of the high tech revolution.
In an exclusive and far-ranging interview with this columnist, Elkus recalled how Ampex came to dominate the video recording market. He headed the team that introduced what would become the world’s first VCR and was present on September, 1970 in a ballroom in New York City when it was unveiled to the world. At the time, Ampex controlled almost 100 percent of the world’s video recording patents and was in a position to dominate a technology that would become one of the cornerstones of the information age.
Incredibly, Ampex did not follow-through on the rollout of its newest product and other more aggressive companies in Japan came to power as the driving force in video-recording technology. Ampex declared bankruptcy four years ago. “You are probably worth more than they are today,” said Elkus sadly, pointing to the lowly Examiner columnist.
The former Ampex executive tells this story and a lot more in his book, Winner Take All, which was published in 2008. Elkus bemoans that fact that America today makes few of its own cameras, TVs, or cell phones and has become the world’s largest debtor nation in the process. And, as he carefully described in our recent interview, he is growing increasingly concerned about the interesting global corporate dance that is currently being played out over the biggest technology game changer yet – the mobile device market.
Elkus sees the semiconductor giant Intel as one of the more vulnerable players right now and the surprising news just last week that Intel CEO Paul Otellini will leave his post next May underscores the difficult issues that are likely being managed behind the scenes at the Santa Clara, California based company. “My sense is that Intel is really having a tough time,” said Elkus. “They’ve got to be in wireless.”
Intel has been slow to adapt to the new realities of the mobile world, which depends on low-power processors. Bloomberg News reported earlier this month that Apple was looking for ways to replace Intel processors it currently uses in Mac computers, with the chips for the iPhone and iPad. This is all being driven by Apple’s quest for a seamless user experience between TVs, tablets, phones and computers. That takes a chip that can do it all, something which Intel currently lacks. As Elkus said succinctly, “convergence is the key.”
This could open the door to a golden opportunity for an Asian company such as Taiwan Semiconductor Manufacturing Company (TSMC) who is fully equipped to build the component which Apple needs. Such a move would be yet another manufacturing opportunity lost in the U.S., precisely the problem that Elkus warned everyone about in 2008. “The U.S. needs a foundry,” he said in our interview. “We need a ‘TSMC’ in this country.”
Our nation’s inability to produce and export technology of significant value is what Elkus has called “the biggest problem we face today.” While he believes that the government needs to get involved, he’s not ready to predict that will happen anytime soon. In the meantime, we are all left to gaze at ancient pictures of the world’s first VCR and wonder about a time that might have been.