National Semiconductor CEO Brian Halla: 'we are sitting in the middle of a perfect storm of technology neglect'

Manufacturing & Technology News, Oct 12, 2005 by Ken Jacobson

National Semiconductor CEO Brian Halla was trying out images, looking for one vivid enough to bring home his misgivings about America's current readiness for world competition in technology. Might it be Sputnik's flyover awing his Midwestern neighbors in 1957? Or, since it was Sept. 15 and the front pages still belonged to Katrina, "a new New Orleans for technology"? What about "a perfect storm of technology neglect"?

The problem, as Halla framed it, is that money for basic research--the kind that produces fundamental discoveries and opens up the longterm commercial horizon--has dried up. "What we're finding is that some of the coolest stuff in the world can't get funded other than from industry," he said, "because the pipeline from government funders has been cut off."

But in a "fiercely competitive environment" and under pressure from Wall Street analysts, Sarbanes-Oxley, and frivolous lawsuits, U.S. corporations have neither the incentives nor the means to underwrite an R&D program adequate to national needs, according to Halla. For one thing, "industry is no longer focused on R, we're all doing D: With the exception of a couple of companies, we're all looking at a six-month lookout." For another, industry funding efforts amount to "nickels and dimes"--to "$20 million here and $30 million there"--when a "fix" that Halla put at anywhere from $10 billion to $40 billion is what it will take "to secure the leadership" in technology for the U.S.

The consequences of inaction, Halla warned, promise to be grim. Among them, he sees "NSA trying to order parts from China and being on an allocation list. 'I can't get delivery? What? What do you mean? Didn't start my wafers? Why not?'" So he's devoting time and effort these days to "trying to raise awareness without Sputnik having to go up, without DARPA or NSA having to stand in line to get their chips because they're being allocated to Estonia and God-knows-where else."

The main target at a time of what Halla sees as generalized suspicion, if not disdain, toward corporations must, he believes, be the electorate. His keynote speech at the Innovation Leadership Forum of the International Electronics Manufacturing Initiative (iNEMI) in Herndon, Va., last month followed a talk during which Rep. Frank Wolf, R-Va., had counseled iNEMI members that winning increased funding for research would require carrying four critical "precincts": President Bush, Vice President Cheney, Office of Management and Budget Director Joshua Bolten, and White House Deputy Chief of Staff Karl Rove (MTN, Sept. 20, p. 5).

Observing that "most politicians aren't going to adopt this cause until their constituents say, 'Hey, this is a problem,'" Halla plunged in:

There's a fifth precinct, and that's the American public. The American public doesn't care. They've got their cell phones. They've got their laptops. They don't know where they got them, but they're happy. They don't care about us; they're not interested. A wake-up call for the fifth precinct--for the American public--is what we need right now.

I was in a meeting on Monday with several politicians from California, with all of the venture capitalists that you know and love, with the CEOs of Cisco and Adobe and the presidents of Stanford University and the University of California system. By the time they called on me, I said: "The amount of enthusiastic support for these issues is phenomenal!" It was all the same things: lack of funding, lack of research labs, not letting [foreign students] go to our universities anymore and then not letting them stay if they are here, etc., etc., etc.

And I said, "It's amazing how we can all be in such enthusiastic agreement." And: "Every other forum I go to, it's the same amount of agreement--in California, Texas, New York, and Massachusetts. The people in every other state think that the people in this room are a bunch of crooks: 'Stock options are evil. They are tools used by evil people for evil deeds.'"

Let me ask a question: How many were alive in October of 1957? I was 11 years old, but I remember the day like it was yesterday. Everybody on my street back in Ft. Dodge, Iowa, was out on their front lawns. There was a lot of talking, a lot of yelling. Somebody would say, "There it goes!" and everybody would say, "No, that's just a shooting star."

We were all waiting. You could smell the cigar smoke from across the street. And all of a sudden, there it was: Whooosh. It was Sputnik flying over. Ft. Dodge, Iowa, is a town where, like a lot of other towns, some of those people on that block have bomb shelters. So Sputnik flies over and all of a sudden it's: "Whoa!" The noise died down. It was quiet.

That was a wake-up call that was so dramatic it hit every man, woman and child in the country so that Eisenhower had no problem allocating a billion dollars [to science and technology], which was a lot of money in 1957. And Kennedy had no problem supporting it, to put a man on the moon.

Now, where'd that take us? Well, I grew up in the mainframe business at first, and the mainframe business was catering to the aerospace industry, where there was intense competition for faster and faster computers. Why? Because that's what NASA and Lawrence Livermore Labs wanted.