Featured Article 27 Jul 2012

Olive Keogh
The Irish Times
July 27th 2012

Kevin Cooney has worked his way up to be corporate vice-president of the world’s largest provider of high-powered microchips, but he insists the success of the Irish operation is due to its workforce

If you own a digital TV, drive a car with a sophisticated infotainment system or have recently had a CT scan, there is a good chance that the “brain” whirring away inside the device was supplied by Xilinx, a low-key but highly regarded member of the Irish foreign direct investment community for the past 17 years.

Xilinx is the world’s largest provider of high-powered microchips and has recently announced a $50 million (€41 million) expansion of its Irish operations.

The man widely credited with securing this investment is Youghal-born Kevin Cooney, Xilinx corporate vice-president, chief information officer (CIO) and managing director of its Dublin-based European headquarters.

Cooney is the only corporate head of function based outside Xilinx’s headquarters in San Jose, California. And, at 52, he says he is probably the oldest CIO in Silicon Valley . . . and the one with the longest commute.

Cooney comes from a software background and started his working life in Youghal Carpets. He joined Xilinx to oversee its IT when the company set up here in 1995, coming from Digital Equipment Corporation, where he had spent a decade.

He has been in charge of the Irish business since 2004, having worked his way up through a variety of senior management roles in IT and business development.

Xilinx designs and develops programmable logic devices – very powerful microchips used in a broad spread of industrial, scientific and medical device applications, from consumer electronics to mission-critical systems for organisations such as Nasa.

The chips are central to the development of new information and communication technologies globally and are used to manage the interchange and manipulation of digital signals.

When talking about Xilinx, the key word is “programmable”. Its chips can be customised to optimise their functionality and reprogrammed “on the fly” if standards or features change.

With sales in excess of $2.2 billion, Xilinx dominates its industry with a market share of almost 50 per cent. The company employs 3,300 people worldwide, has 20,000 customers and 2,500 patents. It has traded on the Nasdaq since 1990.

“We are all about faster time to market and increased design flexibility,” Cooney says. “We operate in an ‘innovate or die’ world where we must continually develop leadership products that are flawlessly executed and meet our customers’ wants and needs.”

Xilinx was set up in Silicon Valley in 1984 by semiconductor engineers Bernard Vonderschmitt, Ross Freeman and Jim Barnett. It was Freeman’s mould-breaking idea for a computer chip with programmable “open gates” that set the company on its path.

At the time, Freeman’s idea was greeted with some scepticism by the semiconductor industry, not least because it depended on the extensive use of expensive transistors. But Freeman was convinced that the cost of transistors would fall, making his pioneering field-programmable gate arrays an attractive alternative to custom chips.

History proved him right. Even today, programmable logic devices are one of the fastest growing segments of the semiconductor industry.

Cooney is clearly delighted by the expansion of the Irish operation – which is adding 60 high-calibre jobs to the existing workforce of around 280. However, he declines to accept any plaudits for it.

“Nothing like this happens unless there is a team of capable people. One individual doesn’t make it work,” he says. “Somebody has to be at the head of the posse and it so happens that in this case that’s me. The reality is that Xilinx as a company is not investing in Kevin Cooney. It is investing in the team in Ireland and across Europe and in the skills and capabilities of the people here.”

Xilinx could have put its investment anywhere as it has strong links with other regions, most notably Asia. The company pioneered the “fabless” operating model which means it outsources all of its chip fabrication and the company’s manufacturing, assembly and test partners are all based in Singapore. However, when it came to the most recent investment decision, the company decided there was a robust business case for choosing Ireland.

“We look at potential locations all of the time and there is nothing sentimental about this sort of decision making. It’s made on the basis of what’s best for the company in the long term and the Irish operation has been very successful,” Cooney says.

“What I’m particularly pleased about with this investment is that we will be working with a number of indigenous companies in which we see tremendous potential as we look at developing our next generation of products.”

Cooney dismisses the suggestion that Ireland’s favourable corporate tax rate was a major factor in the investment decision.

“The tax environment is obviously important and we would not like to see the 12.5 per cent rate changed,” he says. “But the key reason why we are here is the calibre of the people. We believe there are outstanding analogue, IC (integrated circuit) and digital designers in this country and we are prepared to back this with a $50 million investment. We believe there is tremendous potential for Ireland as an entity to be known as an area of global expertise in IC and analogue design.”

What may make this aspiration something of a challenge, Cooney acknowledges, is the much hyped skills gap, but his view is that the gap is no worse here than elsewhere.

“We could do with more electronic engineers, computer scientists and software engineers. But every country in the Western world is in exactly the same situation,” he says. “We need to help our young people understand the potential that exists in careers in the sciences and in maths. At its most simplistic, we wouldn’t have an iPad or an Xbox without engineers and computer scientists.

“I read an article recently which said the most popular subject with boys in the UK taking A levels was maths. In Ireland, maths came eighth. English was first and that’s important. But I’d like maths to be second. If we can crack the maths and science issue, we will definitely attract more jobs here.

“I spend a lot of time in North America. I know the skills companies are crying out for. Project maths seems like a good first step, as are the extra points for maths. But we need a long-term investment strategy to make this happen and industry needs to work more closely with the education system in sharing our knowledge.”

Xilinx was a founding sponsor of UCD’s Nova Innovation and Technology Transfer Centre, and also works closely with a number of other third-level organisations such as the Tyndall National Institute in Cork, which has a focus on ICT hardware research, and the Innovation Value Institute at NUI Maynooth.

Locating its facility at Citywest in 2005 was Xilinx’s first expansion outside the United States. It was a big step for a company whose experience up to then was only of North America.

“Being able to get a workforce together was also a big factor then,” he says. “When we started, we were predominantly doing test activity. Over time we have evolved into a high-value research, engineering and IT operation (with additional corporate responsibilities in tax, finance, HR and legal) that provides the company with a significant bridgehead into Europe.”

In 2001 the company invested an additional €50 million expanding its facilities in Dublin and, in 2005, it established an offshoot of its advanced research facilities in Dublin and further expanded its research team in 2011.

“Advanced research is very important for companies like Xilinx and this decision was very significant as it was the first time we put advanced research outside Silicon Valley,” Cooney says.

In 2011, Belfast-based telecommunications technology firm Omiino was acquired and today the company’s workforce is split between Dublin, Cork and Belfast, with a further 150 people based across Europe.

It has not been all plain sailing for Xilinx in Ireland. In April 2009, in response to deteriorating market conditions, the company rationalised its business and the axe fell on part of its Irish operation with the loss of 120 jobs.

“That was a very difficult time and there is no point saying it wasn’t,” he says. “But the economic collapse had kicked in and there was a lot of concern that we were heading into a very deep downturn. A lot of companies went through a reassessment of their capabilities and their cost base and how best to structure their work. At the time we had three small test floors and the decision was taken to concentrate everything in Singapore (mainly because all of our assembly, fabrication and test partners are in Asia) and to close the ones in California and in Dublin. We tried hard to treat people with respect and integrity during the process and to give them the best package we could. I knew most of the people, having worked with them for many years, and it’s not an impersonal thing when you find yourself in that situation.

“When the shut-down process is finished, you then have to stabilise what’s left behind because those remaining are clearly concerned for their jobs. You have to try to rebuild momentum and focus on the future. This is why the announcement of an expansion three years on is so great. It shows we have been able to continue to move forward and recreate high-end, long-term jobs with the capacity to survive downturns. Our product sets fit well with the insatiable appetite for bandwidth, and as around 40 per cent of our revenues are in the communications industry, we are very optimistic about future prospects.”

Cooney says there are no significant practical difficulties in hosting research and engineering here for products being manufactured thousands of miles away.

“We’re a global business with integrated communications so it’s not a problem,” he says. “If there is a challenge in being away from headquarters, (particularly with the time zone difference), it lies in being heard at corporate level. You have to work longer hours because you have to over-communicate to make sure you’re being heard. A a result my day tends to be split into two: my Irish or European day and my US day.”

Like everyone else, Cooney would like to see the issues around the euro and Ireland’s debt crisis solved. “We believe the euro is very important and as a company we want the euro in place,” he says. “The European connection is important to us and we value Ireland’s position within the EU. The issues in Europe over the last two years are problematic because they impact on confidence and it’s challenging to see how long it’s taking to get to some level of political agreement. But I’m heartened by what’s occurred over the last few weeks.”

Cooney says the two main business challenges for the company in the immediate future are continuing to innovate to deliver the products and solutions its customers need and recruiting and retaining top talent.

Cooney travels a lot, spending at least a week a month in California. He bemoans the lack of a direct flight to San Francisco and hopes somebody out there will listen and reinstate it. To relax he reads and listens to music and says he has eclectic tastes in both. He keeps up with the latest management thinking but is more likely to read a biography than a business guru.

Cooney has spent a lot of time in the US and says being Irish is an advantage in international business because Irish people are good communicators, which helps them make connections. “The Valley is generally welcoming to the Irish but nobody is going to give you something just because you’re Irish. You have to deliver,” he says.

Content supplied with the permission of The Irish Times Ltd. For more see www.irishtimes.com

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