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EPISODE #10 | March 30, 2022

The Government View of the Semiconductor Industry

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SiliconExpert Podcast Episode 10 with Patrick Wilson Mediatek Part 1 - Transcription

Host: Eric Singer

Producer/Director: George Karalias

[00:00:00] Patrick Wilson: I had to perfect this, this little schtick that I always do, and I hold my iPhone and I would say, this is how DOD works. So wow. This iPhone, you have, this is fabulous. We'd like this. So we're going to convene a committee of experts in DOD who are going to design a special iPhone. We want it to be based on this one.

[00:00:21] And then we'll give you those specs in two years and then you'll make it in two years. And then four years from now, you will deliver an eight year old iPhone. And by the way, will you support that eight year old iPhone for 20 years? Cause it needs to be resilient. So make it unbreakable, so it'll last 20 years and find me a contractor who will hire people to support this eight year old iPhone for 20 years.

[00:00:47] And I would say that out loud to them. And I was like, I know this sounds crazy. Cause you guys are laughing. That is exactly what we do, right. That is the current state of play in the Defense Department. The good news is I get paid every day to go and talk to people about the most important thing in the world.

[00:01:08] Eric: Welcome to the Intelligent Engine, a podcast that lives in the heart of the electronics industry brought to you by SiliconExpert. SiliconExpert is all about data-driven decisions with a human driven experience. We mitigate risk and manage compliance from design, through sustainment, the knowledge, experience, and thought leadership of the team, partners and those we interact with every day expose, unique aspects of the electronics industry and the product life cycles that live within it.

[00:01:35] These are the stories that fuel the Intelligent Engine.

[00:01:43] Joining us today is Patrick Wilson, vice president of government affairs at Mediatek. Patrick served with our shows, director George on a anti-counterfeiting task force. And he's got such an amazing diverse background and a unique perspective due to him serving in the military and serving time as a lobbyist in Washington as well.

[00:02:07] Patrick, thank you so much for joining us. The first thing I want to ask you is about what we just alluded to your background. How did you get into this and take us back as far as you can.

[00:02:20] Patrick Wilson: Thank you. It's a, it's a joy to be with you. George's a dear friend, and I was happy to support this project that you guys are doing, looking at the microelectronics sector and trying to explain some of the issues people don't think about all the time. So for me, I came into the electronics industry basically, accidentally like everybody in Congress, I went to law school, I went up to Capitol Hill. I worked for a member of Congress from my hometown as a council. And the way policy is made in the U S is a member of Congress, has a staff of maybe 20 people, four or five of them are young college graduates who get thrown into the deep end from the very first day.

[00:02:59] And you're asked to become an expert on literally thousands of topics, which is impossible. And so you, over time, people come in and brief you and talk to you about things. And some of them you are interested in some of them you don't care about and your boss doesn't care about. But I was very lucky because I'm the son of an engineer and I was always really interested in technology.

[00:03:19] And so when companies, a lot of senior executives who'd come in to see my former bosses and they would talk about technology about developing technology. And that was always really interesting to me. A long time ago. In 1998, I was invited to a dinner. Like a lot of Capitol Hill staff, a guy named Andy Grove was speaking on Capitol Hill at a dinner that was hosted by a think tank.

[00:03:42] And I didn't know about that, but I knew he was famous and I was like, wow, this is a cool invitation to go to this dinner. And I thought, I'd go. So I put it on my schedule, but as is totally typical in DC, I was over-scheduled and I showed up for this dinner late. I think it was held in the House science committee hearing room, as I recall, and I showed up a little junior Hill staffer, Patrick Wilson.

[00:04:02] And I walked into the room and it was like maybe 60 people, but it was all one of those giant tables where it's like all around the perimeter and food was already on the table. And I went to the only available seat, which was in the middle of the table, which is not great. When you're late, you have to sneak past all these people and wind your way through a crowded room to get to the only empty seat.

[00:04:22] And I sat down and I realized too late that the only seat left was the one next to Andy Grove because everyone else was smart enough or was intimidated to take that seat. And so they didn't make me move. And so frankly, I got to spend until he got up to speak probably 30 minutes learning what a semiconductor was from the man who practically invented it.

[00:04:50] And it was as a little Hill staffer who knew nothing about the semiconductor. He made a joke that I recycle all the time. He was like, yeah, they're the part-time conductors. They only do really small symphonies. That was an Andy Grove joke that I've recycled like a million times because I thought it was really funny. But he really walked me through it.

[00:05:10] And I, then I, of course, after chatting with him, he got up and then addressed the whole group. And there was a Q and A, and really much smarter people than me staffers from powerful committees and the science committee, people who were engineers and technologists, they asked brilliant questions. And he was just, I was hooked.

[00:05:26] I was like, these are the most complicated things on earth. And I think maybe because I had read some science fiction as a young man, I was never a huge science fiction guy, but I was like the idea that there are these machines that are making machines more advanced than them. Like he talked about the factory, Intel's factory and he said, these wafers are flying through this factory, but these are also computers and they are making computers to replace them at that note.

[00:05:49] And I was just like, That's science fiction. And this was way before things like the Matrix or whatever. And that just fascinated me. So I guess that is the long and way back, o g, answer to your question of how I got hooked on this. And actually when I came back from Iraq in 2005, I didn't know exactly what I wanted to do, but I didn't want to just go back to working on Capitol Hill.

[00:06:09] I had been a senior staffer and a member of leadership staff in the House. And I was like, you know, I don't want to do that. I want to get a quote real job. And at that very time, a former intern of mine from the Hill, one of his clients at his law firm was like this group called SIA. And he said, Hey, I think they're trying to get like a full-time employee for the first time in DC.

[00:06:30] You're not going to have much to work with. You'll basically just be working by yourself for the whole time. But it's really interesting. And I was like, oh yeah, I remember them. And that's how I ended up taking the job with SIA. I opened their office in DC in 2005. It was a Silicon Valley, exclusively focused company, a little club of CEOs, much more interested in trade disputes, not really much interested in politics.

[00:06:52] And over that time, over the last 20 years that I've been doing this, I've also been concurrently a reservist. I've spent two years of my life in Iraq and I'd done a lot of the things worked in House and the Senate and the administration, and worked in a trade association and now work for a big chip company.

[00:07:06] I, there just aren't that many people like that. And I can't think of another person that either George or I know in the industry, right. That has that vantage point. And so if I sound like cynical, which I like to think I'm a pretty optimistic person, but it is only because of this long exposure to all these various touch points right across DOD and the commercial sector.

[00:07:22] And I'm a non technologist too. I have to force really brilliant people to break it down, Barney-style for me. I don't understand what you just said. I'm not an engineer, lawyer lobbyist. So you have to give me the really simple version because I'm going to explain whatever you tell me in the context that you give me.

[00:07:41] I'm going to have to explain that to really busy also non-engineer technologists, right? Who don't understand any of this? So that's kinda what I have to do all the time.

[00:07:52] Eric: Tell us more about SIA for listeners who don't know.

[00:07:56] Patrick Wilson: Sure. So SIA is the Semiconductor Industry Association. It was a trade association formed about 35 years ago by some of the most important CEOs in Silicon Valley because at the time they were getting their ass kicked by the Japanese. They damn near shut down the whole U.S. industry, right? It was a deliberate attempt by the Japanese government to subsidize and support Japanese semiconductor manufacturing, but more important, the electronics industry in general, consumer electronics was still dominated almost significantly by the Japanese.

[00:08:29] And they blocked the export of U.S. chips to Japan and that sort of existential crisis, caused the industry to band together, because remember the industry had been these brash entrepreneurs that

[00:08:42] Eric: All in competition with each other.

[00:08:44] Patrick Wilson: Yeah. Intense competition. Like the idea that margins were so tight and they were all living in cubicles and spending money on politics was like, not in the budget.

[00:08:53] Like. We're not doing that. And yeah, and that's how SIA was born. But it was always unlike a lot of trade associations, people who don't do politics, don't realize that you personally, every single human being is probably a supporter of half a dozen different trade associations or industry groups or professional organizations or chambers of commerce, you know, from the soccer coaches association to the anesthesiologists to whatever it is, there is somebody lobbying for somebody, but SIA didn't have anybody.

[00:09:21] They just had never really been focused necessarily on DC or on politics. And so as the industry matured and changed, and the threats changed, the industry began to realize that they needed to start telling their own story in DC. And that was, I think, the reason why at the time, the CEO of Intel, a guy named Craig Barrett, who many of your listeners will be familiar with is again, a really important voice in the semiconductor industry.

[00:09:46] Craig Barrett basically said, Hey, we gotta do more. We gotta be more involved in policy. And it's a long game and your listeners who are on the sales side of the industry versus people who are on the design of devices side, they'll understand right. To build customers. You have to know them for a long time.

[00:10:03] You have to go see them when they have a problem and then offer to be helpful. And then maybe they'll buy from you in a year or two when they were like, oh, I remember that woman who came in to talk to me about my problem and helped me solve it. Oh yeah. They're really trustworthy. Maybe I'll go back to them and buy something. That long game, which is a part of every salesman's worldview. It's exactly the same in politics. Right? You have to go talk and cultivate over time relationships with busy people, who are trying to solve their own problems and say, Hey, I can help. What can I do? Can I help you understand this? Can I help you fix a problem or bring it into perspective? And then hopefully whenever we have our problem, we'll go back to them and say, Hey, remember the confidence and the relationship we built over that other thing.

[00:10:43] Hey, I've got a problem. I have an issue that needs to be resolved too. And it's really that kind of a long game of developing those relationships and developing a reputation for trust. My Ted talk I'm always doing as a lobbyist is to tell the public right. That it's actually not like on TV, right?

[00:11:03] Lobbyists are not slick or tricky or lying all the time or trying to trick people because this is the tiniest little village. Politics, right. It's a tiny little village. If you're full of BS, everyone knows it. By the third month here. You don't have any staying power. So if you don't tell the truth or don't do what you said, everybody knows that.

[00:11:25] And it's a very small little world. And so believe it or not, you really, you have to keep your word. You have to tell the truth. And often that means, Hey, you're going to hear from the other side. This is what I think, but I just want you to be aware of, you know, there are multiple sides of this issue. Good lobbying involves that, about laying out all the issues and trying to persuade people to your perspective based on good arguments.

[00:11:50] Eric: And I imagine you must face particularly, uh, unique challenges, um, lobbying for our industry as opposed to something like the automobile industry comes to mind. There's something that the average American and the average politician, they understand intuitively, oh, the automobile industry supports a lot of good paying jobs.

[00:12:15] It enjoys widespread public support. People get it, people own this product. They realize that they own it. They often have a brand affinity for the vehicle they drive. Things like that. But with semiconductors being so much behind the scenes, For consumers and for politicians, there's less of a, I guess, less of an obvious, tangible benefit in terms of jobs creation, because our manufacturing processes are so automated.

[00:12:45] We're not employing 10,000 people in a factory. That's got to make it so much harder.

[00:12:51] Patrick Wilson: Absolutely. I couldn't correct a thing you said. You really, you get it right. That's exactly the challenge. And part of the funny thing to me and it's you, it was only funny from my perspective is that every politician in America has an opinion on semiconductors right now because of the auto industry, even though we're at the most important industry, many would argue, they care about it because of a really old industry, right? Henry Ford started the auto industry a very long time ago. And the internal combustion engine is not very modern, even with all the chips we put in that.

[00:13:23] So yes, the auto industry, very important people, it touches millions and millions of people's lives, both as employees and as customers. And it is very visible and they also have a really powerful lobbying interest. Just think auto dealers in every community, they've been sponsoring little league teams for a hundred years.

[00:13:40] Like they are in every town. They're in every city council meeting there, they run for office. They run the chambers of commerce in every town, but then the auto manufacturers, as you've always pointed out, they're also huge employers in every state. So when Ford or GM or Toyota or Volkswagen, when they go to the State House, Everyone knows.

[00:13:57] Oh my gosh, take the meeting. Volkswagen's here. They've got 10,000 employees in our state or whatever

[00:14:02] Eric: And you've got to compete for that meeting slot.

[00:14:04] Patrick Wilson: You're you're absolutely right. And I would say the joke is right, 10 years ago or so whenever I was trying to get folks interested in the semiconductor industry, it was not as easy as it is now.

[00:14:16] Now all my colleagues who there's been a huge hiring spree in DC of companies hiring lobbyists to work on these issues. And I always joke. I said, back in the day, I could have set myself on fire and the report would have been crazy, man, kills himself, not semiconductor lobbyist does himself in. No one would have cared about what a semiconductor was or why.

[00:14:37] And that is certainly different now. And luckily even a little Mediatek, which is likely very well in the weeds, right? And everyone's the top of mind as a foreign headquartered company, even though we're a big employer in the U S and we obviously power billions of devices that Americans buy and use every year. They don't really know about us.

[00:14:56] And so luckily I get to ride on that tailwind a bit, right? When I call up a member of Congress or a congressional staffer or an industry leader at state department or somebody who's working on our issues, they're like, oh, okay. A semiconductor company. Well, okay. I need to know about that. Come in and talk to me, help me get smart on that.

[00:15:10] I need to know something about that. And that's been just such a blessing that people are open right. In a way that they haven't been before.

[00:15:17] Eric: So you're seeing a real shift in this, in both interest and awareness.

[00:15:22] Patrick Wilson: Well, there were some interesting things. People are slightly more interested in all things, semiconductors and national security people are increasingly having a view, having a worldview on semiconductors and on technology, generally. What was really fun about that effort is that politicians thought they understood the problem. I still remember arguments with Senator McCain about this. He was like your companies, meaning the biggest chip companies in the world. They need to stop these counterfeits from getting into the supply chain.

[00:15:53] It was very funny thinking about it now, but he really thought we're going to go after these chip companies for doing this. I said, sir, this is with all due respect. Actually it has nothing to do with us. It's your defense departments, procurement policies. They'll Google a part number and find it on eBay.

[00:16:09] And buy it and put it in a sensitive product that has nothing to do with us. We'd like for you to buy it only from us, if you buy it only from us, it'll be safe. And he just couldn't get to that. And it took him six months or eight months to realize that we were coming to them, demanding that they fix this.

[00:16:25] And I guess members of Congress are always, they're enthusiastic about fixing the problem, but not always clear on where the origination of the problem is.

[00:16:32] Eric: What do you think the turning point was in getting them to understand what the problem actually was?

[00:16:39] Patrick Wilson: I guess I would say is that there's a general disconnect and it's been laid bare even more profoundly in the last two years, but back in the day, and it was 2010, really where when SIA really started focusing on this challenge because chips, fake chips kept showing up in like really bad places.

[00:16:57] And so DOD already had this sort of boogeyman fear that the Chinese or other nefarious companies were going to make like fake chips that were infiltrated. And whenever they would ask about that, I would say your far bigger worry is that trash that is being picked out of electronic waste in China is being put in baggies and sold only to you because the only people who want to buy 20 year old chips, that's trash to everybody else is the DOD.

[00:17:23] And they just didn't understand that. And I was like, The consumer market four years old is really old. And I had to perfect this, this little schtick that I would alway do. I would hold my iPhone and I would say, this is how DOD work. So wow. This iPhone, you have, this is fabulous. We'd like this. So we're going to convene a committee of experts in DOD who are going to design a special iPhone.

[00:17:45] We want it to be based on this one. And then we'll give you those specs in two years and then you'll make it in two years. And then four years from now, you will deliver an eight year old iPhone. And by the way, will you support that eight year old iPhone for 20 years? Cause it needs to be a resilient, so make it unbreakable so that it will last 20 years and find me a contractor who will hire people to support this eight year old iPhone for 20 years.

[00:18:13] And I would say that out loud to them. And I was like, I know this sounds crazy because you guys are laughing. That is exactly what we do, right. That is the current state of play in the Defense Department. The good news is I get paid every day to go and talk to people about the most important thing in the world.

[00:18:32] Right. And they are knocking on our door. Mediatek is one of the biggest chip companies in the world. And they're like, oh, we really want to partner with you. And I'm like, I'm sorry, but by the time you guys buy anything we will be way beyond whatever you guys say you need right now. We just don't want to play that game.

[00:18:46] And that continues to be the big challenge for DOD is because they buy so badly and in small quantities and not the way the market does that, they just are permanently out of sync it turns out with the consumer market with commercial technology and that's a national security threat. It's a real danger.

[00:19:04] But the work that George and I were doing on counterfeiting really was just, as they say the tip of the iceberg, right? The reason that DOD is uniquely vulnerable to recycled trash, basically being sold to sensitive technologies is that these sensitive technologies are only sensitive because the mission they do.

[00:19:22] Not because the actual technology node or the innovation that they represent, the stuff that they do, the mission that these people are carrying out is really important and really sensitive. But unfortunately we give them really bad, old tools that are brittle and not very resilient and have lots of failure, points of failure.

[00:19:40] I should caveat all of this. These are my views, right? These are not Mediatek's views. They're not anyone else.

[00:19:46] Eric: Sure. It strikes me that your entire career is driven by crisis. Whether it's the Japanese government applying pressure, a war in Iraq or the chip shortage, that's when calls you answer.

[00:20:00] Patrick Wilson: Yeah. That is just kind of the way politicians stumble from one crisis to the next, right.

[00:20:05] Because they have to be very reactive. Just by nature. That's what democracy is about, whatever the crisis, the moment is, they want to be like, Hey Congressman, you got a position on crisis here, the challenges, but you know, it's actually, I want to be a little bit critical also of our industry because you know, in an industry dominated by engineers, really brilliant engineers and technologists, you know, they're worried about getting their patents filed about solving the Moore's law challenge, right?

[00:20:29] Like doing really hard things every day. And they're like, Hey kid, talk to me about politics some other day, I'm busy doing real things. And you have to engage senior leaders and explain, this is a long-term game. You need to not just talk to politicians who are in office, now. You need to be a part of the conversation now.

[00:20:47] Because, when they eventually decide to run for office, you'd like the very first time that you meet them, not to be a crisis. You need to develop relationships over time. I call that the future proofing of our technology literacy in government and to future-proof it, you have to do all things. You have to support think tanks, you have to be engaged in dialogues.

[00:21:07] You have to do podcasts with people to help explain complicated things. And that's just a lot. And a lot of companies, every company, they find it hard to make time for these projects, which are nice to do, but do my shareholders really care and is my visit really important to my bottom line. It's a big, it's a big challenge for every company and that's has certainly changed a lot as more executives, really good senior leaders, CEOs, and strategy leaders in companies.

[00:21:36] They get it. This is not a nice to do thing. It's essential to our business to go and tell our story, to introduce ourselves, to put our shoulders to the wheel and try to get the policies in place that will allow us to meet our business goals. And ultimately people like me and your insight of business.

[00:21:53] That's what I look at is I talked to my business leaders. You say, what are you trying to accomplish? Do you realize looking down the list of all the things you'd like to accomplish this year? Almost all of them have some interface with whether government gets the regulation, right? Whether they license your product, whether they understand that this is a very critical emerging market that you need to get ready for.

[00:22:10] You need all of these things that you tell me. I'm not making this up. I'm not telling you what's anything about what's happening in DC. You're telling me what you care about. And I'm just spotting places where you're going to be interfacing with government and that needs to be done strategically. And the good news is when you're working with engineers, when you lay it out, they're like, oh, I see what you mean.

[00:22:30] Because I would say, Hey, 25% of our objectives for this calendar year involve some capricious action by government. What percentage of resources in our company are designed or facing that challenge? If it's 25% of our work is going to be impacted by government. And you tell me like the current amount we have dedicated to that activity is zero.

[00:22:56] Even engineers get that's a mismatch, right? That's a misalignment of criticality to resources on the ground. And so what I think a lot of companies who have realize that very same thing, that's why you've seen a big hiring surge in our industry where these more enlightened, I think senior leaders really get that.

[00:23:13] They're like, Hey, we can't wait for a crisis to come and try to send an ambassador up to DC to tell our story. We need to be ahead of the game.

[00:23:24] Eric: That seems like a good place to close out part one of our conversation today. Join us next time as we discuss the CHIPS act with Patrick, as well as his view on the future of America's role in the global semiconductor industry.

[00:23:39] I'd like to thank you again, Patrick, and also thank Mediatek for sponsoring this episode of the Intelligent Engine podcast, and a special thanks to you, our audience for tuning into this episode, be sure to tune in for new episodes, that'll delve into more of the electronics industry and share our podcast with your colleagues and friends.

[00:23:58] You can also sign up to be on our email list to receive updates and the opportunity to provide your input on future topics. Go to SiliconExpert.com/podcast to sign up. Until next time, keep the data flowing.

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