Hassane El-Khoury talks about his plans to develop Cypress 3.0

3 mins read

Cypress Semiconductor was formed in 1982 and went public in 1986. Until 2016, the company was led by TJ Rodgers. It’s fair to say that anyone who met with Rodgers, whether a member of Cypress staff or from outside, never forgot their first or subsequent meetings.

Rodgers is neither a man to let sleeping dogs lie or to suffer fools gladly and, as such, would appear to be more than a hard act to follow. But that challenge has been taken up by Hassane El-Khoury – and with enthusiasm.

“I’m making changes to the company,” he asserted. “However, the changes are an evolution, not a redirection. What I’m developing is Cypress 3.0.”

So what were the previous generations of Cypress? “Version 1.0 was when the company was founded,” El-Khoury said. “It was a company developing commodity products – and Cypress is still the leading company in the SRAM market.

“Version 2.0 saw Cypress shift to the design and manufacture of more programmable devices. In Cypress 3.0, I’m looking to turn that round; using our infrastructure and technology to go to market with solutions.”

And that is one reason why Cypress acquired Broadcom’s wireless IoT business – a move completed a couple of weeks before El-Khoury slipped into the CEO’s seat.

“It’s a different type of acquisition for Cypress,” he admitted. Previously, Cypress tended to focus on the acquisition of technology and has a successful track record in this respect. “The Broadcom acquisition is a customer driven move,” he said. “If you look at the products and solutions that came with the business, you can see a focus on automotive, industrial and consumer applications.”

In El-Khoury’s opinion, the technology world has changed. “It’s no longer about silicon,” he contended. “It’s now about the software that stitches silicon devices together.”

And that underpins his desire to develop Cypress 3.0: to position it as a solutions company that can not only provide the silicon, but also the software that applications need. “I believe we have all the pieces that designers need to build systems,” he added.

Cypress has a history of acquisitions, so how does El-Khoury see the current trend of mergers and acquisitions in the electronics industry? Will Cypress be involved? “It depends on the entities,” he answered. “These moves are made either to build a company’s scale or to broaden its customer platform through technology.

“Cypress can already provide multiple products and software – solutions – to a wide set of customers. And these solutions are customisable through software.

“We are out of the commodity business nowadays and that move defines how valuable you as a company are to your customers. In the end, you have to invest to remain relevant to your customers; if you don’t, you become just another semiconductor vendor. But that investment needs to be made on both sides; customers invest in Cypress understanding their solution requirements. Our M&A strategy will support and strengthen that.”

One of the areas which El-Khoury will also be looking at is ‘what else do customers need?’. “What can we do to differentiate ourselves? How can we help our customers to differentiate themselves from their competitors? We have the technology and a solid foundation of providing solutions. That, I believe, makes Cypress better able to make the changes needed.”

El-Khoury also accepts that, far from being a ‘done deal’, this transition will be a never ending process. “Systems continue to change,” he said, “which means the future can’t be rigid. But I suggest it’s going to be easier for customers to change software than it is for them to keep changing chips. Nevertheless, there’s a realignment that needs to happen.”

What’s El-Khoury’s view on R&D? “Cypress is currently investing around 15% of revenues into R&D into software and silicon, with more focus on software because that’s what will be needed for customers to build solutions.

“But I also see more efficient silicon development within the company. For example, we have developed twice as many products than two years ago using only half the budget.”

Here, he pointed to a platform approach. “We could, for example, develop 20 products based on the same platform. For instance, our type C USB range is the fifth generation of USB products in Cypress and we can create solutions that sit on top of that silicon.”

What’s the balance between research and development? “We’re still doing research,” he argued, “because the markets in which we participate need research. Some of this work is done in partnership with customers; in automotive, we’re doing research targeted at 2021 models, with development work starting in a year or so.”

Cypress also maintains its own process technology. “It’s a competitive advantage,” El-Khoury asserted. “It gives us the ability to have an edge on other companies when it comes to power and die size, for example.”

Europe remains an important territory. “We have a design centre in Germany, with more than 100 engineers working on silicon and software; you have to be in Europe if you want to be in automotive.”

El-Khoury expected his changes to be in place by end of 2016. “Then, we will be on the 3.0 track and the rest will be a journey. But I’m happy with the pace at which change is happening.”

And where will that pace take Cypress? “In five years,” he concluded, “we

will be a broad supplier of programmable solutions in focused markets.”

Hassane El-Khoury

Hassane El-Khoury is president and chief executive officer of Cypress Semiconductor and a member of the company’s board of directors. He was previously executive vice president of Cypress’ Programmable Systems Division, managing its standard and programmable MCU portfolio, including PSoC devices, and its automotive business.

Prior to that, El-Khoury ran Cypress’ automotive business unit and targeting the infotainment, instrumentation cluster and Advanced Driver Assistance Systems (ADAS) segments.

Prior to joining Cypress, El-Khoury served in various engineering roles with Continental Automotive Systems in the US, Germany and Japan.