Business & Real Estate

In Roseville, Telefunken spinoff hopes to slash world’s energy consumption

Technology industry veteran Roger Lee always thinks big, but he usually starts small.

Last August, Lee left his job leading 600 employees at Telefunken Semiconductors in Roseville so that he could work with roughly a dozen individuals whose sole focus is to dramatically slash the world’s energy consumption. How? He and his team told me it can be done simply by improving the efficiency of motors that drive washers, air-conditioning units, automobiles and the like.

“Most people think that lighting makes up most of the world’s energy usage,” Lee said, “but that accounts for only 12 percent of the total. Motors, on the contrary, consume 50 percent. If we can improve the energy efficiency of motors by 30 percent, that means 15 percent of all electricity usage would be saved.”

Lee started diving into these statistics while he was interim CEO at Telefunken. There, microchip designers were developing microcontrollers that could regulate motor speeds. About 90 percent of motors run at full speed and use a mechanical system to adjust how much energy is used, Lee said. That’s like putting the pedal to the metal in a car, he added, and using the brake to adjust speed.

To Lee’s mind, the microcontrollers, called variable-speed drivers, could spark an energy revolution. The only trouble was, Telefunken had decided that its future lay with becoming a pure wafer foundry that produces chips designed by other companies. That decision prompted Lee to make an offer for the company’s chip-design business.

The proposition fell on receptive ears. Lee had led Telefunken through a trying year in which the company dismissed and sued its two top executives, alleging that they had diverted millions of dollars from Telefunken to fund their own enterprise. Lee righted the ship and put the Roseville factory on course for a stunning turnaround. He remained with Telefunken, now known as TSI Semiconductors, as chief operating officer to help a new CEO get the company back on track. He still sits on TSI’s board.

Lee, a Chinese immigrant who earned electrical engineering degrees from Iowa State University, also had successes before Telefunken. In 1987, he was one of only 10 staffers at Micron Technology. As a senior technical fellow, he started developing flash memory technology with a team of three people. Flash, of course, now is used to store information on everything from digital cameras to tablet computers.

At that time, however, most technology relied on dynamic random-access memory, known as DRAM. The embryonic flash project was very low priority, said Daniel Xu, who worked with Lee at Micron and now in Roseville.

“I still remember one of my colleagues joking with me,” Xu said. “He said, ‘What are you working with now?’ I told him, ‘Oh, I’m working on the flash project.’ He said: ‘What is flash? We have a phrase in this country, “a flash in the pan.” Ever heard it?’”

Xu laughed heartily at the memory, then noted that flash today is a $6 billion business for Micron, now a multinational company.

Lee, Xu said, joined Shanghai’s Semiconductor Manufacturing International Corp. as a senior vice president in 2001, a year after it was founded. He commuted between the two countries for five years. SMIC is now one of the five largest chip foundries in the world.

Lee’s experience, leadership and loyalty won the day with TSI’s owners. They agreed to spin off the chip-design unit and even joined a round of angel financing that brought in $3 million in startup capital for Lee’s new company, TF Semiconductor Solutions. As president and chief executive, Lee has invested his own money in the company, and so has Xu, who is the senior director in charge of production. The spinoff rents space at TSI’s massive Roseville plant and contracts with TSI to produce variable-speed drivers.

The business is not simply about selling chips, said Lee. Rather, he said, he wants to assist manufacturers with integrating the drivers into their products. Already, TF Semiconductor is producing 10 variable-speed drivers, he said, and 40 customers are testing them. More variable-speed drivers are already in the pipeline, said marketing vice president Duke Walton. TF Semiconductor holds a number of patents on its drivers.

“A variable-speed drive for smaller motors would be pretty neat,” said Jim Parks, a SMUD program manager. “(Manufacturers) use them on fans and certain air-conditioning systems, where depending on the load, the fan speed increases or decreases, and you save a lot of energy. If they’ve designed something like that for smaller motors, I think that would be significant.”

Lee, 56, said he has several goals: He wants to lower CO2 emissions without increasing dependence on nuclear power. He wants to prove that manufacturing can be profitable in the United States. And, he wants to take his company public. Before he can do all that, Lee said, he will have to raise additional capital to expand production, research additional chip designs and market the products.

Call The Bee’s Cathie Anderson, (916) 321-1193. Follow her on Twitter @CathieA_SacBee.