AMCC’s Dave Rickey Has
Revived a Firm That Now
Exceeds All Expectations
ike a veteran coach of a team that’s tasted some success, Dave Rickey isn’t satisfied, isn’t content to kick back and take it easy.
Based on his company’s recent performance, Rickey, president and CEO of Applied Micro Circuits Corp., should be one of the most contented executives in San Diego.
Since taking over AMCC four years ago, the company that was losing money and laying off staff has been transformed into one of the highest fliers in the world of high-tech.
Last fiscal year, which ended March 31, profits for the manufacturer of silicon chips used by the Internet industry soared 184 percent from the previous fiscal year to $48.6 million. Annual revenues were up 64 percent to $172 million.
About 19 months after he took over, AMCC went public at $8 a share. Last week, the stock was trading at close to $90, down from its 52-week high of more than $150.
But Rickey still feels pressure.
“Now it’s a different kind of pressure,” he says. “It’s the pressure to be the best in the world. It’s about money until you have it. Now it’s about ego and pride.”
The money part is something Rickey, 44, never has to worry about.
These days, when he finds the time, Rickey is researching details on a private jet he intends to purchase.
His aggravated sinuses, cramped airline space and the vagaries of airline schedules caused him to look for a more dependable and comfortable mode of travel. He says he’ll pay for the plane himself and find a way to get the company to cover part of the expense. By the way, private jets run from $12 million to more than $50 million.
The money is nice, but hasn’t changed Rickey at all, he says.
“It’s good security, good for my family, but it actually doesn’t matter,” he says. “It actually makes it easier to work because you have less fear now. You have all this money in the background. Until last year I had more money in my bicycles than my cars.”
A dedicated cyclist, Rickey rises daily at dawn to do about 20 miles from his home in Poway. He owns six bikes including a stationary bike he uses when it rains.
Among the few luxuries Rickey has given himself are having his bicycles custom made.
The mood at AMCC is very different from the day Rickey arrived as the new CEO in 1996. He formerly worked at AMCC from 1993 to 1995, heading up the company’s manufacturing operations, but left when he thought the company wasn’t going in the right direction.
“I fixed all the problems only to find out the rest of the company was totally screwed up and I didn’t see any hope of recovery,” he says.
After an eight-month stint at Bay Area silicon chipmaker NexGen Inc., he got a call from AMCC chairman Roger Smullen asking him to come back, this time as president.
The timing was fortuitous, since Rickey wasn’t thrilled with the acquisition of NexGen by a large chipmaker. But many at AMCC weren’t convinced Rickey was the answer.
His first day back, Rickey held a company meeting and presented his vision of where he wanted to take AMCC. Among his goals were going public by August 1998, and its stock reaching $2 billion in value by 2000.
AMCC went public in November 1997, and today its market capitalization (outstanding shares times market price) is more than $12 billion.
Jim Ebentier, AMCC’s director of mergers and acquisitions, said the numbers Rickey presented that first day were “so far out there” it caused a lot of skepticism.
That skepticism quickly faded as Rickey set out to implement his game plan and not only meet, but exceed, those goals.
“Dave is a very different president than the one he succeeded,” said Brent Little, AMCC’s vice president of marketing. “His expectations are extremely high. He’s a much more hands-on type of manager, and in that first year, he made everybody extremely nervous. He made people feel uncomfortable if you didn’t know what you were doing.”
But if Rickey challenged, he also rewarded those who met the challenge. He instituted a bonus program, and met often with his management team.
He also dispensed with several product lines the company had dabbled in, and focused the company to serve the communications sector and those companies engaged in building the Internet.
AMCC’s high bandwidth silicon chips are used by some of the largest manufacturers of traffic and switching equipment in Internet communications. Among them are Nortel Networks, Cisco Systems, Lucent Technologies and Siemens.
Rickey said he was aware AMCC was well-positioned for success when he returned, but the quick turnaround took even him by surprise.
In contrast, those who know Rickey aren’t shocked by what happened.
Bob Williams, a longtime friend and president of Williams and Sewell HR Consulting in San Diego, said he met Rickey while working for Intel in Portland, Ore., in 1984 and was immediately impressed by his intelligence, high energy and integrity.
Rickey is the kind of person who isn’t afraid to speak his mind and doesn’t play political games, Williams says.
“Dave doesn’t need to do that. He is what he is and people around him know where they are going. He has natural leadership talent.”
Rickey grew up the fourth of six children in the small upstate New York town of Geneva, between Rochester and Syracuse. His dad was a chemist. His mother worked as a nurse but was a homemaker while he was growing up.
Gregarious and curious, young Rickey had thoughts of becoming a journalist but abandoned them early on when he found out how poorly they were paid.
But he still enjoyed writing and worked summers for the Geneva paper during his high school years, and on the local paper where he attended college in Marietta, Ohio.
Instead of writing, Rickey majored in math at the engineering school. In his junior year, he entered a program to obtain an engineering degree from Columbia University in the inner city New York neighborhood of Harlem.
“It was great. I lived at a dorm at the Union Theological Seminary, which is affiliated with Columbia, and where people go to study theology. It was really quiet, which made it an excellent place to study.”
Rickey relished New York’s excitement for a while, but one summer, while studying for his doctorate, he became disenchanted.
“I was jogging in Central Park, and it’s 90 degrees, and I think they had a garbage strike going on that year, and I said to myself, ‘I don’t want to go to school here anymore. New York sucks. I want to go out West.'”
After transferring to Stanford University, Rickey passed his doctorate oral exams, and met his wife, Jan. They both took jobs with IBM in 1981 and moved to Vermont, where Big Blue had a large plant.
His career at IBM and later at Canadian telecommunications giant, Northern Telecom, took him back to the West Coast, and to San Diego.
Despite his professional and financial success, Rickey remains modest, chalking up a good deal of credit to just plain luck.
Those who know him say that’s Dave.
“He’s succeeded beyond everyone’s expectations and yet he’s the same guy who I remember from the first grade,” said John Rice, a good friend who works as sales trainer in Minneapolis and still keeps in touch.
“The fact that Dave has succeeded is a surprise to no one who knows him. The fact that his success is on this level is just a small surprise.”