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Holding off the Hedge: One CEO’s Story

MADISION, Wis.—When the news hit the wire earlier this year that hedge fund investor Starboard Value was circling Marvell Technology Group, chip industry veterans were saying: “We’ve seen this movie before.”

Exactly four years ago in 2012, Integrated Device Technology, Inc. (IDT) found itself targeted by the same hedge fund.

Although the Marvell and IDT’s circumstances at the time of activist investor attacks greatly differ, the havoc wreaked by these campaigns remains the same. 

Ted Tewksbury

Ted Tewksbury

The element that sets the two cases apart, including the possible outcome for Marvell, is the human factor. Ted Tewksbury, who was IDT’s CEO in 2012, played a crucial role by staying on at IDT.

Tewksbury, who now acknowledges that he was caught offguard, fought tooth and nail against the board members who were forcibly installed by Starboard. The battle lasted more than a year.

Confident of his own vision of IDT’s future, Tewksbury — who remained the company’s CEO until August, 2013 — used every weapon in his arsenal to foil the interlopers. His lonely battle was partially successful, but it required a lot of sacrifice.

“It was a painful period of my career,” he recalled.  “What they [the hedge fund investors] didn’t anticipate then, though, was I was going to fight back,” Tewksbury told EE Times in a recent interview.

As we studied “The Who, What & Why of Attacks by Wall Street Agitators” in our recent article, EE Times caught up with Tewksbury.

In an almost hour-long interview, we discussed his life after IDT, including his latest big project. Tewksbury became an interim CEO at Entropic in November 2014, and sold Entropic to  MaxLinear in February in 2015. He also sits on two boards, at MaxLinear and Jariet Technologies.

We asked him to look back on his last 18 months at IDT, and what he learned about hedge fund investors. We talked about his concerns for the chip industry today, and what he hopes to do next.

Tewksbury hopes to get back to running a semiconductor company as permanent CEO. He said, “I thrive on the stress of the job. I tell my wife that not having day-to-day pressure is more stressful.”

Tewksbury now consults with private equity firms and investors seeking acquisitions. “I’m embarrassed to say that many of those firms are Chinese,” he said.

We asked, “Why are you embarrassed?”

He pointed out: “Because I’d rather be building the U.S. semiconductor industry. Semiconductors have been a strategic component [of the U.S. economy] that has made the country very competitive.”

Pointing out the recent unprecedented rash of M&A deals in the U.S. chip industry, Tewksbury noted that U.S. semiconductor vendors are selling parts of their companies or whole companies, and cutting back on their workforce and R&D spending. They have generally stopped investing in the future, “often under pressure from activist investors looking for short-term gains,” Tewksbury warned. “That’s very worrisome.”

Below is an excerpt of our conversation with Tewksbury.

EE Times:   What’s your life like after IDT? What have you been doing?

Tewksbury: As with any other unemployed former CEO, I’ve been doing some consulting, working with private equity firms and helping startups with fundraising and strategies.

To read the rest of this article, visit EE Times sister site EBN.

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