Chip Chat

By Cathy Booth Thomas

Intel may dominate the market for computer chips, but Texas Instruments is the world's largest manufacturer of chips for cell phones. TIME's Dallas bureau chief Cathy Booth Thomas talked to Tom Engibous, chairman of the company, about the future of the technology industry, the declining number of engineering graduates and what he sees as the nation's looming deficit in innovation.

TIME: In recent speeches, you've been warning about a "silent crisis" in education and basic research. Why?

TOM ENGIBOUS: There is definitely a crisis. We still lead the world in electronics, pharmaceuticals and food productivity because of the huge amount of R&D invested over 30 or 40 years. But that's coming to an end. The single biggest risk to the economic prosperity of the U.S. today is education, specifically math, science and engineering education. Also, federal funding for the physical sciences, research needed to innovate new technologies and new products, has been flat for 30 years, while funding for life sciences has gone up threefold. We're more interested in extending our lives. But the reality is that what has kept the U.S. prosperous is not longer lives. It's newer products.

TIME: Where is the challenge coming from?

ENGIBOUS: China has 6% of the world's R&D, and they are growing at the highest rate. Only 5% of our graduates get an engineering degree, but in China 46% graduate with an engineering degree.

TIME: Why isn't our education system working?

ENGIBOUS: In engineering, for the first three years, you're studying Maxwell's equations, thermodynamics, calculus--and you haven't got a clue why. What would be much more valuable in freshman year is to teach how an iPod works, how an airplane flies, then work backward.

TIME: Are you lobbying the government for more funding of long-term basic research?

ENGIBOUS: We are working on it. There is a growing realization that the U.S. lead in electronics has been the result of investments made 30 to 35 years ago. Nanotechnology is the next generation. But we do not have the basic research in physical sciences to lead in nanotechnology. It's a neck-and-neck horse race, if you've read what the Chinese, India, the Japanese and the Taiwanese are doing.

TIME: Is the chip business headed for a slowdown?

ENGIBOUS: The chip business tends to be more cyclical than the economy in general. Predicting the next slowdown is hazardous at best. That said, the number of new electronic applications becoming available bodes well for a continuing period of strong growth.

TIME: What's your prognosis for the tech industry overall?

ENGIBOUS: We're entering an era where an average person will have multiple electronic devices. The digitization of content is allowing all those electronic devices to be connected and share information. Add to that the large number of Asians gaining purchasing power, and arguably the tech industry has perhaps the best outlook of any large industry. Cell-phone and handheld consumer electronics are--and will continue to be--the primary drivers of electronic growth.

TIME: Those innovations should bode well for the U.S.

ENGIBOUS: Cell-phone technology is still developed in Western Europe and the U.S. Where are computers invented and designed? The U.S. But in India today, tens of thousands of engineers are writing software. The numbers don't support us continuing that lead for the next two generations. Education is our toughest issue.