Hassane El-Khoury’s active evolution of Cypress – The Mercury News

Cypress Semiconductor Chief Executive Hassane El-Khourys first year on the job has been eventful, to say the least.

El-Khoury, who has been with Cypress since 2007, took over as CEO on August 11, 2016. But, he wasnt just taking over a job from anyone else. At that time, El-Khoury succeededchip-industry legend T.J. Rodgers, who stepped down in April of last year and who had been Cypress only CEO since he founded the company in 1982.

Last October, El-Khoury oversaw Cypress cutting of 500 jobs, or about 8 percent of its workforce.

Cypress shareholders elected two of Rodgers nominees to the companys board, and in early July, Bingham stepped down from Cypress board.

In the meantime, El-Khoury has led a transformation of Cypress called Cypress 3.0, in which the company isfocusing on high-growth areas such as its automotive business and consumer products. And with that, El-Khoury wants Cypress to be known as a company that takes on, and solves, its customers problems.

To me, its an evolution, El-Khoury said, because we had bits and pieces, but it wasnt a coherent story.

El-Khoury spoke about Cypress recently at the companys San Jose headquarters. His comments have been edited for length and clarity.

Q: Youve said Cypress is a new company. Why did you feel the need to make itnew?

A: At Cypress 3.0, we are looking at how you take all these capabilities and create solutions that really target a customers needs. We needed to be a different company because the world also changed around us. Automotive growth requires a different skill set, a different DNA, for example. If you have that focus, you can get more of a benefit from your investment. Weve done that in automotive, and were number one in automotive memory, touch screens. Thats a very credible strategy weve focused on.

Q: Automotive seems to be a thing that everybody is into today.

A: Before the merger (with Spansion), beginning in 2015, automotive was about 15 percent on a$750 million annual revenue run rate. Today, its 30 to 32 percent on a $2 billion run rate. Theres a lot of hype in automotive, so when I talk about it, I have the numbers and the success that the team put behind us to say, Yeah, were an automotive supplier. When I say, This is what were doing in auto, were doing it. Theres no feeling around in the dark to see what hits. We know exactly what to do.

Q: How open is the automotive industry to what Cypress is offering?

A: Their guys come through and audit our processes and say, Now you are worthy to be our supplier. Thats a lot of work and money on their side. When we acquired Broadcom (Cypress bought Broadcoms wireless internet of things business for $550 million in April 2016), that became an asset. And we got the calls from the automotive guys. They wanted to talk to us about how they could design our new products into their platforms. If you provide quality, they feel like they have no reason not to use Cypress (technology), nor to maximize it. We can bundle and optimize what they need.

Q: Automotive is obviously a big deal, but what about the consumer market?

A: Our strategy is broad, by definition. So, these are new markets coming in, and we have to be able to capitalize on them. And our strategy is to dominate the capability there. IoT (internet of things) is a capability. A connected car doesnt move the car from the automotive bucket, it puts it in the IoT bucket. The IoT capability in the consumer market is what were going after. Once you have the main event, then everything else you get, you can dominate.

Q: When you came in as CEO, were you feeling like Cypress had been missing out on things, or there were areas you could have had?

A: Not really. My role before I became CEO was running the connectivity division. Within that, is where automotive was. With the IoT business, we were not missing out. But, with focus, we thought about how we could do more and capitalize on the opportunities we had. Yes. And that was the reason we did the restructuring in September. Its not that we were blind to it; we saw that we could do more and do it better.

Q: Whats the reaction been like in the company?

A: From where I sit, its been very positive. Employees have no problem sending me an email telling me, This sucked. Which they did when I first deployed the new brand. We had problems in the banner. And we learn in business school not to use problems in a brand. I got a lot of feedback asking if we could change that. I said, No. Everybody comes here to solve problems. Customers call us when they have a problem. This is what we do. We went with it. And after we deployed it, and they saw it in a context, they said, Slam dunk! This is what we are about. The atmosphere of collaboration is alive, and that makes it refreshing for me.

Age:37. Occupation:CEO and President, Cypress Semiconductor. Education:Bachelors of science degree in electrical engineering (BSEE) from Lawrence Technological University in Southfield, Mich., and a masters degree in engineering management from Oakland University in Rochester Hills, Mich. Family:One daughter. City of residence:Pleasanton.

1. His hometown is Beirut, Lebanon.

2. Before joining Cypress, he worked for Continental Automotive Systems, a supplier of electronics and other systems for major automakers.

3. He considers his father as his early inspiration for his interest in electronics.

4. As a boy, he once took apart a remote-controlled car he got for Christmas and turned it into a flashlight.

5. He sees his professional mission as working on projectsthat really matter and shapethe way people connect with each other and the world around them.