German semiconductor maker marks arrival on Long Island

Long Island Business News, Jun 28, 2002 by Claude Solnik

World chess champion Garry Kasparov impressed a captivated crowd in Melville recently by taking on a dozen competitors simultaneously. But the really impressive move that day was made by ZMD AG, the German semiconductor maker that organized the event to mark its arrival on the East Coast.

Dresden-based ZMD, which opened the North American headquarters for its Sensor ICs business unit at 201 Old Country Road, invited Kasparov, a company spokesman, to help get the word out.

"I call it chips and chess," Thilo von Selchow, CEO and president of ZMD, said of the event. "We share a lot of the same thinking. Putting first things first. Excellent people first. Products and profits will follow."

Chess and computers, ZMD said, are a perfect match between an industry and a sport. Besides, Cooper said, an affiliation with Kasparov gets the message across that ZMD views itself as both intellectual and competitive.

ZMD said North American revenues increased to 40 percent of its $80 million sales in 2001. The firm, which employs 700 people worldwide, opened its first U.S. office in Santa Clara, Calif., in 1996. ZMD also recently opened offices in San Diego and Madison, Wisc.

"It was a strategic decision that gives us an East Coast presence," Frank Cooper, vice president of the company's Sensor ICs business unit, said of the move to Melville. "We're in a hiring mode. We're relocating people from other parts of the company. But this is just the tip of the iceberg."

The firm's Long Island operations will specialize in developing and marketing semiconductors used in heat- and pressure-sensitive sensors. The sensors are built into everything from car engines to cruise controls and electric thermometers.

ZMD said its products already are used by Volkswagen, and in some U.S. vehicles, though it sells to equipment makers rather than directly to automobile companies.

"Why Long Island? It made a lot of sense," Cooper said. "Route 110 is the high-tech corridor. Like Route 128 in Boston or Silicon Valley, Route 110 is emerging. It's attracting corporate headquarters."

While the area has many financial services firms, it has a growing number of tech and biotech firms. High-tech firms such as EDO Corp., Del Laboratories, Arrow Electronics, Chyron Corp., Olympus America, Nikon, NEC and Fonar are all near Route 110. OSI Pharmaceuticals Inc. also is located in the corridor.

The 201 Old Country Rd. building, now a beehive of tech operations such as KeySpan Communications, the telecommunications division of KeySpan Corp., provided the firm with the high-tech trappings it sought, Cooper said.

He noted that companies such as ZMD that are based abroad are looking at Melville as a way to expand into the metropolitan New York area.

"It's a Class A building," said Michael Stein, associate director of Newmark, which handled the lease. "It has the infrastructure. High speed connections and back-up."

Building a business in the United States, however, is not an easy task, Cooper acknowledged. He said marketing is a crucial part of the firm's efforts. That's where Kasparov and the firm's effort to identify itself with chess come in.

"He's one of our spokespeople," said Cooper of the chess player, who was all business as he moved from board to board. "We like to say there's a strategy in designing silicon. It's much like chess."

ZMD argues this marketing strategy puts a face on the firm, which can be particularly difficult for component makers. Kasparov played chess one-on-one at the event, showing his sport and creating a buzz.

ZMD is also hoping that its home base in Dresden, known as Germany's Silicon Saxony, will be a selling point. About 170 firms, employing about 22,000 people, are based in that region, which has undergone a renaissance. Even the Silicon Saxony appellation is an effort to market the region as a brand.

The firm also sees other similarities between business and chess. These days, both are global games. And a little luck can come in handy in both, Selchow said, though he argued that luck, in the end, can result from effort as much as opportunity.

"We have a German saying," Selchow said. "Luck is with those who work hard."