John East
In-depth with Actel's Savvy CEO

You can feel it from the moment you walk into Actel’s new 157,000 square foot facility in Mountain View, CA. Not because the surroundings are comfortable, conservative, and corporate. They are. The new building has more space, is more usable, and is probably better located than their previous facility, but there’s something else happening here. It’s the people. They have a slightly different feeling than at your typical Silicon Valley technology firm. They seem confident, energetic, and positive. They each have their own personality and style instead of some homogenized corporate mannerism. They like each other. They like working here.

Actel hasn’t blown the lid off the market with triple-digit growth. It hasn’t been on the front cover of every industry publication. It hasn’t engaged in epic product and marketing battles with rival firms, although it does tenaciously defend its turf and aggressively push into new markets… But Actel also hasn’t done some other things. It hasn’t lost money in 52 quarters, even through the toughest times of the semiconductor slump. It hasn’t been acquired by a bigger competitor. It hasn’t suffered massive, morale-destroying layoffs and redeployments. It hasn’t been plagued by Silicon Valley’s legendary high turnover rates, short employee tenures, and the revolving door of technical expertise that smears the lines of distinction between technology companies.

When you talk to the people here, you tend to hear the same story. They understand what their company is about. They believe in the strategy. They know how their products and services are different from those of their competitors, and what kinds of customers are likely to value those differences. They know what direction their technology and strategy are going in the next year, and they aren’t talking about it out of school. They welcome a challenge or debate on the technical merits of flash versus SRAM technologies for FPGA, or the importance of design security.

A positive, productive company culture like Actel’s doesn’t spring spontaneously from the alignment of the stars or arise from some serendipitous coincidence. It originates from the top of the organization. It takes someone with the vision to conceive such a corporate climate, the leadership to direct the team toward that goal, and the resources required to actually make it happen.

John East is an energetic, engaging, intelligent man. From the moment I met him in Don Giovanni’s Italian restaurant in Mountain View, I could feel where the Actel energy comes from. “Someone else is working on a Flash-based FPGA. You know who it is, and I want to find out…” were his first words after exchanging greetings and introductions and sitting down at the dinner table. I immediately knew I should limit myself to one glass of wine. John, still obviously an engineer at heart, is passionate about his company and the technology, and he wasn’t about drop his guard during dinner. Ironically, I had arrived at the restaurant just hours after an embargoed briefing on Altera’s new CPLD family. A family which some (like me for example) might consider a “Flash-based FPGA”. I sensed that John’s disarming demeanor and direct approach must make a powerful combination for an executive.

“I knew from early in my career that I wanted to be a CEO,” John recalled. “I deliberately took on a variety of roles so that I could learn the business and technology from all sides. It’s easy to fall into one track, particularly engineering, and stay there, but I wanted more diversity in my background.”

When John East was young, his family moved from Texas to Wisconsin to Southern California, and then settled in Merced, CA when he was five. John trekked across California (the short direction) to attend UC Berkeley where he majored alternately in Engineering, Physics, then Engineering again. “I liked physics better, but Engineering offered more career opportunities. It seemed like I had a better chance to get a good job in EE.” John followed his EE degree with an MBA, a strong combination for an aspiring high-tech executive.

Fairchild in the late 1960s and early 1970s was a seminal place for the IC business and a breeding ground for some of the semiconductor industry’s most successful leaders and innovators. Founded by William Schockley, who won the Nobel Prize for his role in developing the transistor, Fairchild’s alumni include Robert Noyce and Gordon Moore (later founders of Intel), Jerry Sanders (AMD) and Charlie Sporck (National Semiconductor). “I got there two years later than I wish I had,” John mused. “I missed all the Intel people except Andy Grove. Charlie Sporck had just left…”

John’s initiation into the professional world at Fairchild also provided harsh insight into one of the darker realities of high tech. “I had finished my Bachelor’s in EE, and I was looking for a job while I worked on my Master’s degree,” John explained. “I had interviewed at Fairchild with an engineering director and an HR manager. In May, they made me an offer, which I accepted. They told me to just give them a call in October when I finished my Masters and was ready to start. I took them at their word. I finished my degree, got married, and called the HR manager a few months later to make arrangements. When I asked to speak to him, they said no one by that name worked there. The person that took my call had worked there for one month. I decided then to try to call the engineering director – same result. No one in either area knew anything about my job offer or employment. The person I reached in engineering had been with the company for three weeks.”

It turns out that a major management shakeup had happened at Fairchild during the months between John’s offer and his start date. Robert Noyce had just left to found Intel, and Les Hogan had been hired from Motorola to replace him. Hogan had brought with him eight key executives from Motorola (the subject of a well-publicized lawsuit at the time), and the Fairchild management structure had been completely overhauled in the ensuing weeks by Hogan’s new management team (to whom the sobriquet “Hogan’s Heroes” had been cynically applied).

Luckily, John had his offer letter, and someone there decided to take up his case and put him into a management training rotation where he spent several months in different roles and groups. “My first four months were as a supervisor in a tester group,” John continued. “I was managing people twice my age with much more experience. I had no clue what was going on at first. I thought ‘Is Fairchild crazy?’ The place was a madhouse, but somehow I got by. I then went into product engineering for a year, then process engineering, then design engineering, then product marketing.”

In defiance of the high-turnover environment at Fairchild at the time and in direct opposition to the industry trend, John stayed at Fairchild for 10 years. He did another 10- year stint at AMD before he took the helm of Actel 15 years ago. John’s long-tenure philosophy is evident in his management style. “I hate layoffs,” John says. “They damage the morale and productivity of the entire company and often cause you to lose the people you need to keep. By the same token, I have no problem firing people who are not performing and contributing well. Keeping poor performers in your organization can drag it down just as easily.”

It is evident from his track record that John is not the type to move in, go for the quick win, and leave. John’s patience and long-range view are as clear in his professional career as they are in Actel’s direction. “If you try to compete in today’s market against stronger competitors, you’ll lose,” John explained. “What you have to do is predict where the market is going in the years ahead, and put your money there. Sometimes you’re wrong, but sometimes you get it right and win. You need to make more than one bet.”

Actel has several bets on the table right now, and some of them appear to be good ones. While their antifuse-FPGA business has been steady and successful in high-reliability, environmentally challenging applications such as space, their stronger growth in recent times has been provided by their flash-based FPGA families. While not competing directly with super-high-density SRAM FPGAs on their own turf (the telecom market), Actel’s ProASIC and ProASIC Plus families have gained tremendous momentum in markets that value their low power consumption, non-volatility, security, and small footprint. As the FPGA market begins another growth phase, John is betting that it will be in market segments other than the one that drove the last explosive expansion. If that prediction turns out to be true, Actel is well poised to capture a chunk of the growth with their well-differentiated offerings.

Regardless of the future, John’s strategy certainly has paid off already as a defense against the slump. While the telecom market for FPGAs crashed and sent many vendors into a freefall, Actel’s business performance remained comparatively steady. Their penetration into the space, mil-aero, automotive, and consumer markets helped isolate them to some degree from the more volatile telecom market.

One differentiator that keeps Actel in that position is its flash-based FPGAs, and as our dessert arrived, John wasn’t quite finished with his quest for more information on the potential interlopers: “So, is it Xilinx? Lattice? Altera?...” John studied my face for a reaction. We agreed to continue our discussion a week later (when I knew the announcement in question would have passed).

After dinner over coffee, the subject turned to hobbies and John’s connection with his technical roots came through once again. “Actually, one of the main things I do to relax at the end of the day is read physics books.” John confessed. “I love that stuff.” The CEO who has driven Actel’s strategy for the last 15 years has a passion for technology, and his understanding of the science and his objective view of semiconductors are a cornerstone of his marketing strategy.

A week later, following Altera’s announcement of their new line of CPLDs (which are not-so-secretly SRAM FPGAs under the hood), I touched base with John to get his reaction on the controversial subject. “It's fascinating! For several years it's been pretty clear that CPLD architectures broke down badly as density increased. CPLD power and die size go up sharply with increasing gate count. That means that the same job can be done better with an FPGA in all but the very lowest density applications. However, if you make a living selling CPLDs, that's not a satisfying conclusion, so you're forced to live in denial. The biggest vendor of CPLDs has basically admitted that the job can be done better with FPGAs. Of course, they're big in the FPGA market as well, so it doesn't really matter to them. If Altera is right, it will relegate CPLDs to the sub $1.00 sockets.”

John’s days are long at Actel, but he loves what he does, and he’s clearly in his element. “My Dad was a doctor, and wanted me to be one too, but as a kid, I didn’t want to work from 7AM to 7PM like he did,” John said. “Now I work from 8AM to 8PM and seldom miss a weekend. It shows what you know when you’re a kid.”

Kevin Morris, FPGA and Programmable Logic Journal

March 23, 2004

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