Some of Lattice ’s employees paid for critical supplies out of their own pockets and went without paychecks to keep the venture moving. ” Not surprisingly, Sud was unable to secure financing. Just one year earlier he had explained to The Oregonian that Lattice would succeed because there were no semiconductor-industry venture capitalists involved to “force-feed the company with their conventional wisdom. Desperate, Sud scrambled to raise $10 million in venture capital to keep the enterprise afloat. Sales of Lattice ’s promising chip quickly dried up and the company found itself back at square one.īy 1987 Lattice was on the ropes. But that temporary boon was squelched when Monolithic Memories, a Silicon Valley chip maker, filed suit against Lattice claiming patent infringement. Sales of a version of its programmable memory chip were surging and overall revenues were climbing. Despite that deficit, it looked as though the company ’s fortunes might be changing. ” Lattice lost $7 million in 1986 from sales of the same amount. Recalled David Rutledge, product development director, in Forbes, ”and then they mandated six days. In the Fall of 1985, therefore, he moved Lattice to a six-day work week, similar to that in Japan and Korea. During a trip to the Far East, he became convinced that lazy employees were the problem. Sud was perplexed by his company ’s inability to make money. To that end, he hired a giant 65-member sales and marketing team (for a company that was generating sales of only $1.5 million per quarter). To help buoy lagging sales, Sud decided to try selling different versions of the memory chip. But that product ultimately posed too great a challenge for Lattice ’s design team and was never introduced in finished form. Also in the works was a high-performance programmable memory chip. But the device was introduced early in 1985, in the midst of the industry slump, when few buyers were willing to risk the switch to a new chip design. Lattice ’s first product had been a promising high-speed memory chip. Moreover, Lattice ’s production schedule began to slide and the company started losing huge sums of money. The company ’s posh, fake-marble lobby was enough to turn one investment banker on his heels. One worker was even given a Porsche for Christmas. Rather than carefully investing the maximum amount of capital in research and development, they squandered money, leasing an extravagant 140,000-square-foot building, and catering expensive breakfasts for the employees.
The most glaring flaw was their unwise use of the company ’s cash. Sud and Capece did lure some top chipdesign talent to their company, but they managed the company poorly. But even before the industry tailspinned Lattice was clearly headed in the wrong direction. Part of the problem was that semiconductor markets slumped in 1985. Sud ’s and Capece ’s vision never materialized. Scheduled for completion by 1986, the facility would, according to Sud and Capece, churn out high-tech chips designed by the semiconductor-industry superstars who would comprise Lattice ’s work force. Sud decided that the fledgling Lattice should immediately begin construction of a $100-million, cutting-edge manufacturing facility. But that sum paled in comparison to Sud ’s grandiose business plans. Winningstad helped Sud and Capece to raise about $19 million. They invested in the company partly because they believed that Lattice ’s success would help Portland become a U.S. Winningstad was integral to Lattice ’s startup because he and several of his friends in the Portland business community fronted much of the initial investment capital. Norman Winningstad, the founder of the successful Floating Point Systems, a maker of computers and peripherals. The pair formed Lattice International Inc. Although neither partner had experience managing a company, they believed that Sud ’s ideas and Capece ’s ability to raise investment capital were a winning combination. Capece had gained experience raising capital through his job with venture capitalist Ben Rosen. Sud, a native of India, had worked as a chip designer at both Inmos and vaunted Intel. Management novices Rahul Sud and Raymond Capece started Lattice in the early 1980s, when the market for semiconductors was red hot.
After struggling through the late 1980s, the company grew rapidly beginning in the early 1990s, particularly after it moved into the market for more advanced, high-density semiconductors. designs and markets programmable logic semiconductor devices and contracts other companies to manufacture those chips.
SICs: 3674 Semiconductors & Related Devices 3679 Electronic Components, Not Elsewhere Classified Incorporated: 1983 as Lattice International, Inc.
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