STANDARD MICROSYSTEMS INC. Hauppauge, New York A "Fabless' Strategy For Earnings Growth.(A)

Byline: AMY REEVES

The chip industry is pretty young to have old-timers. But Standard Microsystems Corp. qualifies.

The company has survived for 32 years by taking the long view. And keeping the long view in focus has never been more important than in the last four years, when Standard reinvented itself during the worst recession in the industry's history.

"I can clearly say that this is a totally different company than it was four years ago," said Chief Executive Steve Bilodeau. "We've just been starting to see the fruits over the last year or two."

Bilodeau took the helm in 1999. Even though that was the height of the tech boom, Standard's earnings had peaked four years earlier. So Bilodeau and his team overhauled the firm's practices and focused the business on what it did best.

First of all, he wanted to go "fabless." Standard had its own wafer fabrication business, but with stiff competition from cheap foreign rivals, the unit was losing around $8 million a year.

Standard spun off that business, and now buys the wafers from contract manufacturers such as Taiwan Semiconductor Adr.