Brash T. J. Rodgers Takes On the Consortium Club : Entrepreneur: Cypress Semiconductor’s president is leading a crusade against U.S. Memories, once again defying industry giants.

The sign behind T. J. Rodgers’ desk reads simply: “Be reasonable, demand the impossible.”

But what happens when the best known of Silicon Valley’s new generation of computer chip makers doesn’t get what he wants? “Gee, I don’t know,” reflects his assistant. “It’s never happened.”

It didn’t happen in 1983 when Rodgers, then age 35 and with one semiconductor failure already under his belt, persuaded Silicon Valley’s top venture capitalists to put up $7.5 million to back Cypress Semiconductor, another of his schemes to make high-performance computer chips.

It didn’t happen when Rodgers persuaded an unwilling partner to join Cypress, first peppering him with repeated calls, and then, when that didn’t work, pleading with the reluctant man’s wife.

And it didn’t happen when, after Rodgers finally pulled the San Jose-based chip-making company together in 1984, it managed to release its first batch of products in a near record eight months.

Now the brash and irrepressible Rodgers, who at a boyish 41 still packs the precision-tuned presence of the ROTC cadet he was in college during the late 1960s, is at it again. This time his goal is the undoing of U.S. Memories, the proposed chip-making cooperative organized by members of the top-tier of the nation’s semiconductor industry to fend off Japanese competition.

“It’s a dumb plan,” says Rodgers, a gap-toothed avid jogger who is president and chief executive of Cypress Semiconductor. “Have you ever heard of an American consortium that helped us? If so, I’ll take 50 Amtraks.”

And it would seem that despite initial odds very much stacked against him, Thurman John Rodgers has a fair chance of succeeding at his latest crusade. Thanks in part to Rodgers’ loud criticisms, U.S. Memories has failed to raise sufficient funds and garner new supporters, and many industry experts say it could die before ever getting started.

“There is nothing he doesn’t think he can accomplish if he puts all his talents behind it,” says Kathleen Wright, Rodgers’ ex-wife and a public health professor at a university in St. Louis. “He makes things happen, and he really believes he knows the right way and that what he does will make a difference.”

Although those traits have served him well in building an aggressive, fast-growing and profitable company that will generate sales of more than $200 million this year, they have also earned Rodgers the enmity of many of the leaders of the semiconductor industry, particularly on his home turf in the Silicon Valley.

“T. J. is about as welcome in a gathering of semiconductor makers as the presidents of (Japanese competitors) Fujitsu or NEC,” says Richard Shaffer, publisher of a high-technology newsletter in New York. “He has made enemies of his competitors. But so what? The people who don’t like him are from the companies he is beating.”

Indeed. Sanford Kane, president of U.S. Memories and the man who has taken the full brunt of Rodgers’ blows recently, has few good words for his outspoken opponent. “He’s just a pain in the ass,” Kane says. “He’s a bright fellow, all right, but his ego is bigger than his brain.”

Rodgers delights in such comments because they tell him that he’s having an effect and that his message that big business/government industrial ventures aren’t the right response to Japanese competition is proving nettlesome to the industry’s old guard.

Rodgers also is not without enlightened self-interest in this matter. He is clearly worried that a successful U.S. Memories could end up moving into his markets and become a chief rival.

Rodgers in fact is seeking a license to use the same technology to produce 4-megabit dynamic random access memory (DRAM) chips that International Business Machines licensed last week to U.S. Memories. He met with IBM officials in early November and is developing a formal proposal outlining his suggestions for terms and conditions of a licensing agreement.

But Rodgers’ critics doubt whether he has the financing or capacity to produce this advanced chip and note that his entrance into that business would deviate from his strategy of avoiding direct competition with Japanese giants in chip markets that require high-volume production.

But what Rodgers wants, Rodgers usually gets, say his supporters and friends, including ex-wife Wright, who has known him since they were high school sweethearts in Oshkosh, Wis.

He was the nose guard on the football team that went to the state championships and he later entered Dartmouth College in part because of his on-field abilities. When he graduated in 1970, Rodgers was No. 2 in his class with a double major in physics and chemistry.

Rodgers earned master’s and Ph.D. degrees in electrical engineering at Stanford University where he studied under the late William Shockley, inventor of the transistor and founder of the electronics company that spawned virtually all the semiconductor firms that today reside in the Silicon Valley.

By the time he left Stanford, Rodgers had invented a patented process for making computer memory chips. He took his patent to a small company in San Jose and tried to create a business manufacturing the chips. The venture failed after a few years, not because the technology didn’t work, but because the chips weren’t competitive with other products then on the market.

Although he wanted to start over with his own business at this point, Rodgers was told by venture capitalists to get additional seasoning. He landed at Advanced Micro Devices, then a fast-growing, hard-charging operation led by Jerry Sanders, a flamboyant entrepreneur who many believe is Rodgers’ role model for brash, outrageous behavior.

Rodgers left Advanced Micro Devices to organize Cypress in 1982 after being called by a venture capitalist doing a background check on another applicant. Rodgers recalls that when he was asked about the other fellow, he told the financier that he was the better bet. It worked.

Rodgers’ initial business plan for Cypress, which is still followed to the letter, calls for the company to pursue a variety of specialty markets for semiconductors. The goal is for no single chip to account for a large percentage of the company’s business and for Cypress to pursue only those markets where there is little or no direct competition from the Japanese or large U.S. semiconductor makers.

Furthermore, and perhaps most important, Cypress makes high-performance chips that require less power to operate and therefore run cooler in the electronic devices. The technology, called CMOS for complimentary metal oxide silicon, allows computer manufacturers to pack more chips into a smaller space, thereby creating smaller, yet more powerful computers.

The company has also been successful on the bottom line, becoming profitable within three years of formation and remaining so--a remarkable achievement considering that the firm was formed at a time the chip industry was in a deep slump. For the first nine months of 1989, Cypress earned $22.6 million on revenues of $148.6 million.

“Every semiconductor company should be run like his, bar none,” says Sanford Robertson, president of Robertson Stephens & Co., a San Francisco brokerage that advises Cypress.

Rodgers clearly relishes the role he has carved out for himself as a hard-charging, no-nonsense outsider who can succeed without special treatment from the government or even the support of leaders from within his own industry.

Despite repeated invitations, Cypress has yet to join the Semiconductor Industry Assn., one of the chip makers’ leading lobbyist groups. Says Rodgers, a registered Republican who’s more comfortable with Libertarian political beliefs: “We’re not club members.”

What Cypress is, he says, is a group of entrepreneurs who believe they can build a big business without getting trapped by the traditional trappings of Big Business, like the other big chip companies dotting the Silicon Valley.

These semiconductor industry leaders, he says, used to think like the entrepreneur he is. But men like Advanced Micro Devices founder Sanders, National Semiconductor founder Charles Sporck and Intel co-founder Robert Noyce are “all big company guys now,” Rodgers says. “They’re not entrepreneurs. They have a different agenda than entrepreneurs.”

Such comments obviously don’t sit well among the large Silicon Valley companies. Executives there complain that Rodgers is biting the very hands that created the environment that feeds him. The large companies, they note, go after large markets and compete head-on with the Japanese, allowing Rodgers to pick off smaller niche markets where competition is less and profits often higher.

“He’s like the pilot fish that follows the shark,” says John Greenagle, a spokesman for Advanced Micro Devices. “The shark makes the kill, but isn’t a particularly neat eater so the pilot fish get the leavings. But those pilot fish need the shark to make the kill. It’s a symbiotic relationship. Rodgers just doesn’t recognize it, and he’s attacking the very companies that make it possible for Cypress to exist.”

Further, Rodgers’ critics question whether he is being intellectually honest when he criticizes big U.S. chip makers for coming in second to the Japanese, while offering himself up as an example of how to compete with the overseas rivals.

It wouldn’t be the first time Rodgers has been accused of speaking out of both sides of his mouth. Rep. Tom Campbell (R-Palo Alto), a Rodgers’ supporter, even concedes that Rodgers--an ardent opponent of government intervention in business--was curiously quick to ask federal authorities to prevent U.S. Memories from forming on grounds that it could violate antitrust laws.

Intel’s Noyce is quoted in a recent interview as saying that he was very much like Rodgers when he was in his seventh year of running his company. “His position is he wants to be front and center stage. I felt the same way. But T. J. will realize that he is dependent on the . . . industry.”

Not surprisingly, Rodgers is unfazed by the criticism. “Even my friends will say, ‘He’s a cocky little guy, but he runs a good company.’ ”