This article is from the may 6, 2000 edition of the Eau Claire Leader-Telegram newspaper, in Eau Claire, Wisconsin.

Chen's `dot-com' has high hopes

Electronic services firm opens city office

By Michael Klein

Leader-Telegram staff

An Internet "dot-com" company headed by former Cray Research computer whiz Steve Chen has opened an Eau Claire office.

The company,, delivers electronics manufacturing services to other companies through the Internet, said Steven Mason, vice president of marketing. The privately owned company has ambitious plans for growth, Mason said.

"There are a lot of things I can't talk about, but I'm very encouraged by what I've seen so far," Mason said in a telephone interview from company headquarters in San Jose, Calif.'s branch at 2000 Oxford Ave. employs 17 people, and it plans to grow to 30 to 50 by the end of the year, said Doug Paffel, senior vice president of engineering consultants and programs, as the branch becomes better known.

"Dot-com" describes firms that deliver goods and services through the Internet, many of which have been growing rapidly. would be one of the first dot-com companies in the Chippewa Valley, said Craig Carlson, executive director of the Eau Claire Area Industrial Development Corp.

Besides having huge potential for growth, helps diversify the local economy because it's a new type of company for the area, said Michael Schatz, economic development administrator for the city of Eau Claire.

Carlson said he hopes more Internet-based companies follow; he has proposed building a high-technology incubator center to nurture e-commerce and software companies.

In addition, UW-Eau Claire has asked for $2.5 million from the state Board of Regents to expand the information technology and software programs at the university. That would bring more software students and faculty to Eau Claire, boosting local software and Internet businesses, Carlson said.

This isn't Chen's first new venture in Eau Claire.

A former top designer at Cray Research, Chen left the supercomputer company in 1987 after his project's funding was cut. He started Supercomputer Systems Inc., a supercomputer maker that folded in 1993 when IBM withdrew funding.

He later started Chen Systems, a computer maker that was acquired in 1996 by Sequent Computer Systems, which still has a presence in Eau Claire. Chen left Sequent in 1998.

"What's neat about Steve Chen is he's always got ideas, and he's able to attract financing and high powered people to work for him," Schatz said. put a branch in Eau Claire because of Chen's contacts here and because the city has an excellent pool of talent and expertise in electronic manufacturing services, Mason said. Several local plants manufacture electronic parts, including Honeywell in Chippewa Falls and Hutchinson Technology Inc. in Eau Claire.

Paffel, who worked with Chen at Cray Research and SSI, said he's very optimistic about the venture.

"What I definitely like about it is it's an opportunity for us in Eau Claire to start developing a good business opportunity with good backing," he said. "This area is very great for the talent and work ethic we're accustomed to."

Chen founded in August 1999, and it has nearly 100 employees.

Using an Internet platform, interEMS serves companies seeking to hire other firms to design and manufacture electronic parts for them, Mason said.

To that end, interEMS is forming partnerships with the best designers, suppliers and engineering partnerships around the world, he said.

"A company can come to us and say, `We have an idea,' and we can take it through all the way to delivery," he said. "Or a company may have the design already and just need manufacturing."

Because of Chen's strong reputation in the United States and the Far East, the company has access to some "amazing minds" with expertise in electronic manufacturing services, Mason said.

The collaboration is done through interEMS' Internet software, which allows many types of companies all over the globe to share data, Mason said.

InterEMS seeks to capitalize on three trends: the growth in business-to-business commerce over the Internet, the increasing number of companies that "outsource" activities outside their core expertise and the growth in collaboration between businesses, Mason said.

Large companies such as Cisco Systems as well as start-up companies are outsourcing their electronic manufacturing, getting others to make semiconductors and other parts for them, he said.

The problem is they have to find the best suppliers, negotiate prices and manage everything, Mason said.

"Dr. Chen's vision was that wasn't really the way it has to be," he said. "The company could really function as a general contractor for all."

Electronic manufacturing services is a $90 billion global market, growing 25 to 30 percent a year, Mason said.

Many companies in key markets have shown interest, including semiconductors, telecommunications and medical devices.

"What we are doing is we are focusing on being global leaders in collaborative commerce and outsourcing," he said.

Klein can be reached at 833-9204, (800) 236-7077 or
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