Chips not down for Wexford man running US semiconductor giant

When Vincent Roche received an honorary doctorate from the University of Limerick (UL) six years ago, the chief executive and chairman of US semiconductors company Analog Devices, was lauded in the citation as "fearless", and not just in the boardroom.

A few years previously, he was with a fellow Irishman Pat Meehan, near a temperate rainforest in a remote location on Canada’s west coast. They were guided by native Americans on a trip to find Kermode bears, also known as “spirit bears”. As they crossed an estuary in a small motor boat, an enormous humpback whale rose from the water directly beside them, aggressively spraying all on board. Most of his companions fled to the back of the boat fearing it would capsize, but Roche held his ground.

Reminded of it last week, Roche laughed as he recalled the moment. “I was three feet away from the big eye on the left side of its head. We were looking directly at each other. It was surreal,” he said. As the others cowered, Roche, a wildlife enthusiast, calmly reached for his camera. Wexford men are tough.

But being almost swamped by a 35-ton animal that sees your boat as a rubber duck may be even less pressurised than running a listed US technology giant with a market value of $81 billion (€74.4 billion), and which trades on a multiple of 50 times its earnings. Roche’s company is worth a dozen Bank of Irelands or four Ryanairs. That’s a lot of highly-expectant shareholders to keep happy.

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But as he rests his hands behind his head and swings back in his chair in Analog’s Massachusetts headquarters, Roche seems as calm as a toad in the sun. And why wouldn’t he be?

In the past 18 months he has completed the successful integration of circuits company Maxim Integrated, which Analog bought for $21 billion. Last month, he also announced a €100 million investment in Analog’s European base in Limerick, the location of his alma mater. Meanwhile, semiconductor companies are riding an historic boom in demand for chips – Analog’s sales rose almost a third in 2021 to above $7.3 billion.

Roche is only the third chief executive and second chairman in Analog’s 57-year history. His predecessors probably never faced anything like the growth opportunity that now stands before him, as more and more computer chips are inserted into swathes of machines, from cars to robotics and automated manufacturing systems, healthcare equipment and consumer goods.

“We’ve never experienced so many tailwinds. Here’s the way to think about this: it has taken our industry 45 years to reach a half a trillion dollars [$500 billion] in global sales. In the next 10 years we will double it,” says Roche, who is the only Irish person running a Fortune 500 company.

In all likelihood, he is also the best-paid Irish corporate executive on the planet. Last year, Roche earned close to $31 million including share awards. The soil scientist’s son from Ireland’s sunny southeast has done alright for himself in the US, and there seems to be barely a cloud in the sky ahead.

Chips and networks

Analog is not a brand that trips from the tongue of most consumers. But it is an important business-to-business supplier of chips and networks. It specialises in technology that turns signals such as sound or temperature into digital data. Analog helps devices and machines to talk in digital language.

Roche, an electronic engineer who graduated from UL in the 1980s when it was the National Institute of Higher Education, gesticulates animatedly as he explains the business’s broadening possibilities in a video call from the US last week. As he talks with his hands, Roche appears almost evangelical about the chipmaker’s future.

“We are truly pervasive. Every aspect of life uses Analog’s technology – in streams of light, transmitting your voice [through a smartphone], processing radio signals for 5G. It is in every part of your life but it is obscured from view.”

The global shortage of chips due to surging demand across the economy was exacerbated by production delays in the pandemic, which has worsened supply shortages and bottlenecks in everything from cars to consumer electronics. Roche, however, says the problems were not simply caused by anti-virus lockdowns, but also under investment in production capacity across the sector.

“Nobody is satisfied with state of supply now. Everybody wants more. A real constraint is the manufacture of the silicon [IN THE CHIPS]itself. The dearth of investment in building semiconductor fabrication facilities has been more troublesome. The pandemic exposed the underlying fragility that was there anyway. We are investing frantically to meet the upsurge in demand.”

The €100 million investment by Analog announced last month for its Limerick hub will create 250 jobs at ADI Catalyst, a 100,000sq ft facility where the company will collaborate with other companies on new ideas. It now employs about 1,400 staff in Limerick, and another design centre in Cork.

Separate to the Catalyst investment, Roche says Analog also intends to spend “hundreds of millions” expanding its manufacturing hub in Limerick. He says it will more than double in size by the end of 2023.

Wexford roots

It must be satisfying for an Irishman to be able to bring such investment back to the country he first left in the 1980s. Roche’s roots are all Wexford. His mother, a Rosslare native who is 92, has always been a “great influence” on his life. She came from a “long line of strong women”.

His late father came from a farming background near Adamstown in Wexford and worked for An Foras Talúntais, the forerunner of the agricultural State agency Teagasc. He worked in soil science at Johnstown Castle, which is still Teagasc’s main soil research centre.

As his father was a well-known GAA player and with one of the most common surnames in Wexford town, Roche was known locally as the “footballer’s son”.

Roche says his parents were “never dogmatic” and always encouraged him to respect learning: “Dogma came from church and my parents were devout Catholics. But they gave me freedom to express myself and develop my personality.”

Analog opened its Limerick hub in the mid-1970s and Roche interned there in 1981 while studying electronic systems at NIHE. After graduating the following year, he left for Silicon Valley in the US to work for Fairchild Semiconductors, before returning after a few years and joining Analog in Limerick.

He rapidly rose through its ranks, working at almost every level of the company, and moved to work for the company in the US in the early 1990s. By 2001 he was running its global sales operation and by 2012 he took over as president, in charge of all research and development, business development, marketing and sales. The following year, he took over as chief executive after the sudden death of his predecessor, Jerry Fishman. This year, he took over as chairman from the company’s 87-year-old co-founder Ray Strata, who still serves on its board.

“All three of us – myself, Jerry and Ray – we had that paranoia about making sure we stayed ahead of changes coming, and enabled those changes to happen. The biggest failure in technology is missing the next big thing. In Analog, we’ve always had a consistency in playing at the edge of what is possible.”

Whatever about the possibilities, what is certain is that Analog’s financial performance will continue to expand in the immediate future. Roche suggests its annual revenues, with a fully integrated Maxim, are now “approaching $12 billion”. It expects further expansion, and told investors last week that its estimate of its compound annual growth rate is rising to between 7 and 10 per cent.

Still, the sector’s capacity constraints remain. Roche warns that the pandemic-era chip shortages that have dogged many parts of the global economy in recent years are not over yet.

“The supply chain fractured in 2020. We are still chasing that, still trying to recover from the fracture. We are also investing to meet the upsurge in demand. But barring a major recession in the short term, we will still see a tightness of demand at least until the end of this year and possibly for a good part of next year.”

Social media

Many tech companies like to preach that they are in the business of selling solutions, but technology can also cause the occasional problem. Examples include the often febrile influence of social media on public discourse or the tendency for some consumer technologies to encourage human isolation. Roche takes a philosophical view on the potential downsides of technology.

“Technology is a tool. The tools we have created in semiconductors, which are the bedrock of modern economic and social life, are the most sophisticated man has ever created. But you have a choice. You can use that tool for good. Or you can use it for bad.”

He says he is a “technophile . . . but I don’t use any form of social media. I find it personally a source of great noise. I’ve tried to spend my life looking for the signal, not the bloody noise.”

Roche was in Ireland last month as part of the Catalyst announcement, when he spoke to the Taoiseach, Micheál Martin. He believes Ireland is well placed to capitalise on the next phase of technology’s relentless march to influence and change almost every aspect of human interaction and behaviour.

He lauds the country’s ability to maintain a pipeline of qualified workers, as well as attracting more from abroad.

“We go where the talent is. I was very pleasantly surprised when I was in Ireland a few weeks ago with the number of new employees. There is a diverse flow of talent. America has lost the plot to some extent because the borders have been ‘secured’, if you like,” says Roche, imitating inverted commas with his fingers on the word ‘secured’.

“The US is not getting the inflow we used to get here. It’s a knowledge-based industry. We need the best brains we can get, from wherever. Ireland is doing very well on that front.”

Now in his fourth decade in the US, Roche says he remains “very much in touch with Ireland”. He owns a house in north Wexford near the Wicklow border, which he regularly visits, indulging his passion for cycling. He counts himself as fortunate to be raised here. But he does not give the impression that he spends his time pining for his homeland.

Roche says he knew from an early age that he wanted to spend his life embedded in the heart of the US technology industry, the centre of the tech universe: “I have a strong sense of Irish identity. But rather than specifically looking for opportunities to intersect with other Irish people, my world is more global. I tend to think out there in the global space. That is a necessity in this business.”

Name: Vincent Roche

Job: Chief executive and chairman of Analog Devices

Age: 62

Family: Four children

Education: CBS in Wexford town and NIHE in Limerick

Something we might expect: The son of a prominent Wexford GAA player, Roche is also a keen sportsman himself, preferring soccer and rugby

Something that might surprise: This technology buff does not use any form of social media