Illustration by Ryan Greis
[Sidebar to "Power '08"]
On February 21 Nabeel Gareeb rang the opening bell of the New York Stock Exchange. He then joined CNBC reporter Melissa Lee, regaling viewers with tales of the dramatic turnaround he’d engineered at MEMC Electronic Materials, a once-struggling maker of silicon wafers that last year netted more than
$800 million in profit.
Showcasing two of his company’s products, Gareeb explained that microchips made from silicon wafers control the known universe of electronic gadgetry—from the BlackBerry in your pocket to the Bluetooth headset in your ear. Perhaps more important, he added, MEMC produces silicon wafers used in solar panels—the manufacturing catbird seat in a world hungry for alternative energy.
The wafers are made by combining naturally occurring silicon crystals into ultrapure polycrystalline silicon. It’s a complicated and expensive chemical process whose result, thanks to our tech fetish and the emerging solar industry, is in hot demand. Prices have increased tenfold in the last few years, and when Lee asked about the future of pricing and supply, Gareeb—the company’s president and CEO—gave a sly smile.
“We’re the ones who make the silicon,” he said.
A West Coast transplant, Gareeb arrived here in 2002 when he traded in a higher salary for a chance to revive the ailing MEMC in St. Peters. The Monsanto spinoff had just reported losses of $500 million, the goo of the burst tech bubble all over its face.
Five years later, the company netted a cool $830 million in profit. One of only a handful of corporations to produce silicon wafers, MEMC now has production facilities in North America, Europe and Asia. What’s more, Gareeb adds, the company plans to quadruple its production capacity in the coming years.
Now 44, Gareeb was born in Karachi, Pakistan, where he finished high school at 15 and managed a factory while preparing for the SATs. He studied engineering at Harvey Mudd College in Claremont, Calif., later earning a master’s in engineering management from Claremont Graduate School.
“When the rest of us were partying, he was up studying,” wrote Shree Khare in a blog entry titled “My College Roommate Nabby.” “His only vices were cars and speeding. He had a ‘Haulin’ Ass’ poster taped to his door proudly displayed with a collection of speeding tickets!”
Some things never change: “Acceleration” is now a mantra at MEMC. He reasons that if he doesn’t keep outmaneuvering his rivals, the company will die.
“It’s not a popularity contest,” he told a Forbes reporter last April. “In the end, it is a war.”
He’s a demanding general, known to wage battle by putting in 14- to 16-hour tours at the office. He holds his employees to a similar standard and is said to curse and storm out of meetings if an underling seems ill prepared.
“This will sound crazy, but I’m a very, very lazy person,” says Gareeb, who last year earned roughly $1 million in bonuses atop his $850,000 salary. “My brain frantically searches for the shortest path from point A to point B. It looks like energy, but it’s focus.”
Skeptics say Gareeb can’t keep his market lead, particularly after a few isolated setbacks last year. They argue that newcomers will inevitably crowd the field and drive down prices. But Gareeb’s not worried.
“A few dozen are now trying to get into the business,” he says. “Only three or four will be left in the next 10 years.”
Traditional demand for silicon remains steady, but the industry’s real growth is in the burgeoning solar market. Accordingly, Gareeb has shifted his attention to this new front: Since 2006 he signed four solar wafer contracts worth an estimated $18 billion
As an industry leader, MEMC is occasionally criticized for exploiting its market dominance and breaking contracts. And though the company now insists on more lucrative long-term contracts for its wafers, it occasionally sells a bit of raw polysilicon on the side. This stuff goes to the highest bidder—even if someone else has already signed and paid. “When it’s like gold, we may or may not deliver,” Gareeb says bluntly. “If we cancel it, we will give you your money back. Read the print.”
People may grouse, but that doesn’t stop them from dealing with MEMC. After all, they want the poly, and for the time being, at least, Gareeb has the good luck to supply it.
“Luck,” he counters calmly, “is when opportunity meets preparation.”