Micrel founder Ray Zinn CEO Steve Sanghi renege on core state very discontent, rage against the violation of verbal agreement to carry on large-scale layoffs Micrel action...

Micrel (macrae, founder and former CEO Ray Zinn is numerous in unprecedented semiconductor industry consolidation trend under one of those who feel unhappy; Micrel in August 2015 for $839 million by Microchip (Microchip) acquisition.

Zinn is after see the previous article about Microchip acquisition of Atmel for severance pay employees into conflict with the latter's initiative to contact this newspaper revealed after the news, said he thinks he has a gentleman's agreement between Steve Sanghi, CEO of Microchip was Sanghi said to him, he has a great company, after the acquisition of layoffs will be very mild and the two companies will be equal, but the result is not like that.

"When he visited the company, very warm and admiring, said I did a great job, have to his credit, excellent staff;" Zinn said: "when I try to negotiate with him to lay off, he worries that I promise him like me in this matter, and if he was cut by I a person here, where he will lay off a person." But Zinn also pointed out that: "when I asked him if he can provide a written guarantee, said he can't have inventory records, but you can oral promise."

"After the completion of a deal, but he change attitude to one hundred and eighty degrees, said my company is very terrible, is he seen the worst of the employees, and I don't think he has cut his side (Microchip) any one;" Zinn said: "when I talk to him about the matter, he later is to write a letter to let a person afflictive... said some very you're welcome."

Zinn, said he believes the company is lean and have the profit, whole and should be at the head of layer, so to understand himself and members of the board of directors will be left; But he does not expect Sanghi will close the Micrel fabs, and laid off many people ─ ─ it's really too he surprised: "he did a lot of verbal promises but not implemented, because I didn't ask him to write down in black and white; and no item by item, he didn't even need to obey."

"I didn't even want to evaluate this man, because his attitude is really very good ─ ─ it's my shame;" Zinn, said his company in 37 years almost annual profit, but Sanghi may don't care, only to see a loss of $50000 a year. According to the information from the company's former employees, only Micrel Zinn guess the number of layoffs Microchip half of layoffs, and if the original of Micrel wafer plant shut down, there will be hundreds of people being laid off.

Zinn points out, is located in the silicon valley of Micrel's 6 inch fabs, the BCD (bipolar CMOS DMOS) process, capacity utilization rate by about 35%, its inventory levels than trade is really low, but the equipment already all amortization, the factory and at the same time play the role of r&d and manufacturing: "so you can't let it full capacity;" He said the fabs is responsible for 85% of Micrel products.

"We may be in a few years will increase capacity utilization to 50 ~ 55%, but I'm afraid I never back to the 80 ~ 90%;" Zinn said that customers seek lower prices while foundries to Asia, to run a fabs in silicon valley is not easy, because of the high cost for the world's highest, but Micrel fabs remain competitive, more than 50% gross margin.

Sanghi plea: layoffs this thing can't blame me, but in view of the above from Micrel former executive, Sanghi have completely different, he said in an interview with EE Times, Zinn just want a company going downhill after trading the save face, and he said he didn't make any verbal commitment.

Sanghi, said poor Micrel operations, only 6% of the profit margin (operating profit), but did not increase revenue decade, present continuous decline over the past four years; The Microchip margin was 30%. And he points out, in February 2015 Microchip with Micrel started talks to buy, the latter expected the annual revenue of $265 million, but the deal completed in August, estimates and fell to $230 million, forces Microchip to assess the transaction amount.

And Sanghi, said the activist investors bought a 12% stake and Micrel requires exchange, the Microchip can only crustily skin of head to accept: "the company has performed poorly for a long time, we make it very hard, in that quarter ended December will raise profit margin to 18%, the future will further increase to 30%."