Reinhard Ploss, CEO Infineon "China is definitely planning longer!"

Die Infineon-Zentrale »Campeon«
The Infineon headquarter »Campeon«

Infineon generates 25% of its sales in China. In an exclusive interview with DESIGN&ELEKTRONIK, CEO Dr. Reinhard Ploss spoke about German industrial policy and a bag of potatoes that used to be delivered to Siemens and Bosch, while today the menu is created by Google or Alibaba.

DESIGN&ELEKTRONIK: Dr. Ploss, you have sold your HF power business to Wolfspeed, which should work the other way around. How do you want to play along with the 5G issue in the future?

Dr. Reinhard Ploss: We didn't say goodbye to high-frequency technologies, which extend from radar to mobile communications. Wolfspeed would have given us access to the substrate production of gallium on silicon carbide, GaN-SiC for short, which is used in mobile radio base stations. Nevertheless, we have not terminated products based on gallium nitride on silicon. On the contrary, this technology will become more attractive for mobile devices if a higher integration density is achieved, because GaN-SiC is not required due to the much lower performance. The technological future of the high frequencies from 10 GHz onwards, as soon as the 5G roll-out gains momentum, could still offer some opportunities that are not yet clearly discernible today.

DESIGN&ELEKTRONIK: You have just argued with the high frequencies in the context of the planned purchase, haven't you?

Dr. Reinhard Ploss: Power was a central area. There we have now independently put on our feet what we wanted to get from Wolfspeed: We are currently ramping up SiC power technology.

DESIGN&ELEKTRONIK: Since you worked very well together with the last federal government and were in China several times with Mrs. Merkel and Mr. Gabriel, among others, I would like to ask you what are your first experiences with the new Groko? Has there been any change or even improvement in political support?

Dr. Reinhard Ploss: Even if it is still a little early for long-term results: Industry 4.0 emerged as an interdepartmental cooperation between the Ministry of Economics and the Ministry of Research. During the last legislative period, I personally found these two ministries to be very efficient. We are experiencing good cooperation with the relevant State Secretaries and we have also addressed other issues very successfully. For example, in the era of Mrs. Wanka, a platform Learning Systems was created, which I consider to be very important in order to make progress in artificial intelligence.

DESIGN&ELEKTRONIK: Why the latter in particular?

Dr. Reinhard Ploss: Digitization brings mechanics and electronics together. Of course, we must not lose sight of developments in the field of computers. There are similar efforts at the European level, where our Austrian boss Sabine Herlitschka is very successful and enjoys a high reputation due to her research history. (Editor's note: In February Herlitschka took over the chairmanship of ECSEL, an EU public-private partnership programme to strengthen innovation, research and development for electronic components and systems from Europe).

DESIGN&ELEKTRONIK: When I hear you, it all sounds like peace, joy, pancakes ...

Dr. Reinhard Ploss: Well, I'm already expecting further steps in digitization, together with politicians. Things are not going that badly. But does the progress meet our expectations? Certainly not. Germany has never completely internalized the topic of digital technology.

DESIGN&ELEKTRONIK: Is that a political failure?

Dr. Reinhard Ploss: Politics cannot dictate to the economy: Make a new Microsoft! or Be Amazon Web Services! The industry has to do that itself. Companies in Germany, however, are often a bit slow in combining German engineering with American software competence.

DESIGN&ELEKTRONIK: What do you expect from Interior Minister Seehofer? In the Bavarian state government he has pushed the subject of IT ...

Dr. Reinhard Ploss: I have great hopes that he will continue to support the topic of cybersecurity. I see a huge potential here. Politicians must have the courage to support this: For antitrust reasons, political support is needed so that industry-wide cooperation is possible, and cooperation is absolutely necessary, because we don't need individual solutions, but a functioning overall system.

DESIGN&ELEKTRONIK: If you could wish for three steps or political activities in the near future, what would they be?

Dr. Reinhard Ploss: First of all, Ecsel should definitely be transferred to the second phase, i.e. Ecsel II. A lot has already happened here - and the considerations that have been made public in Brussels so far are quite encouraging. In addition, I would like to see a cross-ministerial initiative on digitisation that looks into the question of where we can do more - both in terms of basic principles and, above all, implementation.

DESIGN&ELEKTRONIK: Do we need more funding there?

Dr. Reinhard Ploss: Europe and Germany must do even more to support the efforts of industry. The industry is already investing immense amounts. We need to catch up, as you can see, for example, in China and its 120 billion euro sovereign wealth fund. I therefore consider it necessary to provide risk capital support and to define new priorities, such as autonomous driving.

"We sometimes think in small terms and put obstacles in our way.”

DESIGN&ELEKTRONIK: Who should primarily benefit from these funds, just start-ups or also large corporations?

Dr. Reinhard Ploss: I am a big fan of synergetic promotion, from which industry, small and medium-sized enterprises and small businesses profit. We can not only live from niches, but also have to deal with fundamental issues. Digitisation makes demands on a large scale. Productive 4.0 in Dresden shows that it's possible: there we coordinate a large number of smaller companies that - on their own - would be overwhelmed by digitization.

DESIGN&ELEKTRONIK: In China there is the China 2025 program - where do you see effects on Europe and Germany?

Dr. Reinhard Ploss: China definitely has long-term plans. However, there are also projects in Europe that are planned to extend beyond a legislative period. Nevertheless, we need to internalise the industrial policy perspective even more. We sometimes think in small terms and thus put obstacles in our way. Industrial policy as a long-term project would do us good; in many places in this country we are discussing things that serve a slightly different purpose.

DESIGN&ELEKTRONIK: Let's get to the popular subject of shortages of skilled workers. What is your view on this?

Dr. Reinhard Ploss: Well, the question arises: Do we get enough young people excited about mint-related tasks? We have to convey to them the enormous relevance for our common future. In the environmental movement, for example, many young people have seen their mission; such a similar enthusiasm would benefit the technology sector. After all, we at Infineon can fill our vacancies well - perhaps because we talk about the importance of our topics instead of complaining - but I don't want to talk small, shortage of skilled workers is an essential topic for Germany as an industrial location.

DESIGN&ELEKTRONIK: Isn't it already missing in school education?

Reinhard Ploss: Of course - the fascination for these contents already begins in primary school, and we need teachers to teach them. You can't have two company visits and expect the companies to please trigger a Mint enthusiasm among the 14-year-olds, that's completely unrealistic.

DESIGN&ELEKTRONIK: In China, you recently established a joint venture with the car manufacturer SAIC and gave it the unpronounceable name SIAPM - SAIC Infineon Automotive Power Modules. With SIAPM you want, among other things, to serve the huge e-automotive market in China. Nevertheless, you keep stressing that cooperation with German and European car manufacturers is the key to success. Why do you think that, given the comparatively small market in this country?

Dr. Reinhard Ploss: Despite all the prophecies of doom, I dare say that the German automotive industry is a technological leader, and we are developing solutions for this. German manufacturers are extremely present in China, and that has a major impact on technological development. There will be a lot going on in Germany when it comes to autonomous driving and the fundamentals of electric mobility. On the other hand, China will certainly set the pace in terms of cost reduction and further development of electric driving. Nevertheless, we like to distinguish between the technological core competence and the countries where sales are generated.

DESIGN&ELEKTRONIK: That sounds like there is no innovation in China itself?

Dr. Reinhard Ploss: Of course, there are topics on which Chinese companies are very confidently moving across the floor - take our cooperation with Baidu, for example. (Editor's note: In the so-called Apollo program, Baidu brings its expertise in AI and autonomous driving and Infineon its expertise in automotive electronics.) As a global company, we are naturally dependent on addressing the competence pools of this world. Nevertheless, when it comes to autonomous driving, we see the decisive strengths for the convergence between functional safety and IT in Germany.

"We take great care to maintain our lead in know-how.”

DESIGN&ELEKTRONIK: Aren't you afraid of losing know-how in China and other regions?

Dr. Reinhard Ploss: We have a clear focus on protecting our differentiating know-how. This applies to every kind of cooperation - whether with Chinese, Koreans or Americans. Like all our competitors, we have nothing to give away. We take great care to maintain our lead in know-how.

DESIGN&ELEKTRONIK: How do you intend to do that with a 49 percent stake in a joint venture like SIAPM?

Dr. Reinhard Ploss: Our main focus was on introducing a well-established technology with mature modules into the joint venture, while SAIC's participation will provide better market access.

DESIGN&ELEKTRONIK: Does this also apply to production?

Dr. Reinhard Ploss: Of course, module production is also part of the joint venture. Infineon will continue to own the production of the chips and the development of new module generations that are not yet within the scope of the joint venture.

DESIGN&ELEKTRONIK: Will the new joint venture have an impact on your location in Warstein, from where you have previously supplied China exclusively?

Dr. Reinhard Ploss: Not at all. The growth potential of electric mobility is gigantic. Rather, we have to consider - detached from the joint venture - how we can also expand our production capacities for other types of construction. Germany as a development and production location is essential in this context. Warstein can concentrate fully on managing the ramp of local production and driving innovation forward.


DESIGN&ELEKTRONIK: At the Mobile World Congress you presented a speech recognition solution. Is this a first result of your participation in XMOS?

Dr. Reinhard Ploss: Speech recognition has a long history with us when you think of silicon microphones. At first, we wanted to go it alone. However, cooperations - such as those we have with XMOS and others - are mutually beneficial. In addition to pure speech recognition, we also need a technology that supports it, such as our very low-noise silicon microphones. Software is also important, and XMOS is very well positioned. And finally, with our radar solution, it's radar that comes into its own: in addition to our components, you always need someone who thinks about how best to use them in the system.

DESIGN&ELEKTRONIK: The world has changed considerably in your market appearance, right?

Dr. Reinhard Ploss: That's right. I used to go to Siemens or Bosch and ask: What do you need? Then they said, "One bag of potatoes”, and we delivered it. Today we're talking to people who think about the menu, like Google, Alibaba and others. It's not trivial.

DESIGN&ELEKTRONIK: How come not?

Dr. Reinhard Ploss: For example, we have a 3D camera that is technically really great. But the question is: Do manufacturers and users recognize the added value? How much should be achieved in speech recognition at the device level? How much should be pre-processed? Each of the well-known large corporations does it differently.

DESIGN&ELEKTRONIK: So your cooperation with XMOS and Co. continues?

Dr. Reinhard Ploss: Yes, the alliance goes far beyond XMOS and we will continue to expand the cooperation. Our Infineon Innovation Center in Silicon Valley, which we are successively expanding, is one of the pillars of this cooperation.

DESIGN&ELEKTRONIK: When it comes to Industry 4.0, I still sense a great deal of reluctance on the part of small companies and large parts of the SME sector. What needs to be done to spark more enthusiasm there for the opportunities arising?

Dr. Reinhard Ploss: The question is always: How is value created for the end user and next how can the supplier benefit? An intelligent grinding wheel can be practical, but it only helps to develop the next generation to a limited extent. I think it is important to talk about marketplaces and exchange platforms, for example with medium-sized companies, in order to show what is possible. Unfortunately, many people are still stuck in old ways of thinking today. The successful thinking of the past is the problem for the future.
We have a strategic approach in the company from product to system, with which we want to counter a similar phenomenon. That's why I like to say: Put the pencil aside, and then we won't look: What is the next possible technological step? Instead, the perspective changes: Where is the greatest benefit - for the customer and for our company?

DESIGN&ELEKTRONIK: It can't be your job as a chip manufacturer to convince companies of the opportunities industry 4.0 offers them. Who do you see as responsible there?

Dr. Reinhard Ploss: Associations, chambers of industry and commerce or the BDI have a clear role here. But even the large clusters, such as those in Dresden, can make a difference. I am not a friend of setting up an institute anywhere in the world. A lot is already here – the question is how to get closer. One principle that I personally like, for example, is: concentrate on the low hanging fruits; in other words: try, learn, try, learn, try. We do the same in the company, even though we are already a half-digitized company. How do you anticipate the end of a story that you write together? This is not possible without openness and agility.

DESIGN&ELEKTRONIK: You can see a clear trend towards standardization in the industry like arm. You still have various proprietary architectures such as TriCore on offer, how do you see your path there in the medium and long term?

Dr. Reinhard Ploss: TriCore is important because of its high real-time performance, but here too we will consider how to use arm cores, for example complementarily on the compute side. There's no point in putting competition to arm. On the other hand, we are likely to see more and more powerful peripherals to process the signals or establish AI instances. At Aurix, for example, we installed FFT machines for the radar. We will certainly continue to adapt arm. But at Aurix we will continue to emphasize our competence, for example with regard to functional safety, so that he can continue to serve as a supervisor in the various ADAS platforms, for example.

DESIGN&ELEKTRONIK: How long can you shrink your flash memory?

Dr. Reinhard Ploss: Well, structures as small as 28 nanometers should definitely be possible, and then we'll see. The large computing platforms for autonomous driving by Nvidia or Intel, for example, use external flash memory with their large programs anyway. Probably the car architecture will be divided into host and client. We are prepared for this.

DESIGN&ELEKTRONIK: Mr. Mayrhuber left you last February as head of the Supervisory Board, what do you owe him?

Dr. Reinhard Ploss: When I became CEO, I had the problem of setting up a network outside Infineon. Mr. Mayrhuber helped me a lot with his overview. I believe that it will also be extremely important for the next generation of CEOs to receive network support. This is not trivial on a global level. But this is just one example, there are more aspects where he supported me. But I am pleased that Mr. Eder, as a new member of the Supervisory Board, is contributing his expertise in areas such as organisational development and on the international stage.

DESIGN&ELEKTRONIK: Organizational development is a good keyword: You want to grow by an average of nine percent per year in the future, what will Infineon look like in ten years' time?

"In ten years, for example, there will no longer be a Ploss talking to almost every developer. «

Dr. Reinhard Ploss: The organizational form will no longer be the same today; for example, there will no longer be a Ploss that talks to almost every developer. And that's a good thing. Just imagine, we'll have 10,000 developers, that won't be possible any more. We have to think very differently than we do today. The only important promise I made to the company was: if I go, you'll be able to reinvent yourself. The company has that ability.

DESIGN&ELEKTRONIK: You are a big fan of long-term thinking, which can certainly be attested to Mr Mayrhuber with his background in the aircraft industry as well as to Mr Eder. Can you give me an example of where Infineon's approach - not maximizing returns every quarter, but planning for the long term - has proven its worth?

Dr. Reinhard Ploss: At Infineon, you cannot think in terms of two-year periods. Take our production facility in Dresden: initially, many people said, what are you doing there? Now everyone is saying, ohhh, Dresden - great what you are doing! In such cases, you can't ask what the return will be tomorrow? You have to think seven to ten years ahead - without losing sight of the current quarter.

DESIGN&ELEKTRONIK: The composition of the Supervisory Board has certainly not become easier thanks to corporate governance...

Dr. Reinhard Ploss: We can safely say that our corporate governance with an infinite set of rules has not made life easier at that point. Because of course it is clear that no competitors should be brought into the Supervisory Board. There is also an age limit. Furthermore, a member must not be an active CEO and must not have more mandates than fixed. But we have to be careful that the corset does not get too tight and that we can hardly get the well-connected people with vision we want.

DESIGN&ELEKTRONIK: What are you actually doing on 1 October 2020?

Dr. Reinhard Ploss: As usual: getting up in the morning - why do you ask?

DESIGN&ELEKTRONIK: Your contract expires on 30.9.2019 ...

Dr. Reinhard Ploss (laughs): You have to ask the Supervisory Board. Basically, everyone is replaceable.

DESIGN&ELEKTRONIK: Do you still make one day CTO per week?

Dr. Reinhard Ploss: That depends, sometimes I also do it on two days. I still enjoy the job of the CTO a lot. Nevertheless, we should soon have 40,000 employees, and in the sense of an agile organization our goal is to transfer more and more responsibility to the responsible units. Sometimes it makes more sense to allow parallel developments than to discuss them for two years and thus save resources but be too late on the market with a solution. We have to be present at the customer and not in the meeting room.

DESIGN&ELEKTRONIK: Dr. Ploss, thank you very much for your time!