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Patrick Henry

CEO, Entrepreneur of the Year leads Entropic through explosive growth

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From being a pre-product company five years ago to pulling in revenues of $116.5 million for the first three quarters of 2008, Entropic Communications, a pioneer in connected home entertainment, has traveled very far in a short period.

At the helm of this transformation is Chairman and CEO Patrick Henry, who came on board in the fall of 2003 and was chosen as the Entrepreneur of the Year for 2008 in the technology category by Ernst & Young.

"We've demonstrated an explosive revenue growth. We took the company public in 2007 in a difficult environment. And we are a technology innovator, not just in one but in a couple of different product lines," said Henry, listing the achievements that garnered him the award.

Entropic is a fabless semiconductor company that designs, develops and markets system solutions to enable connected home entertainment. The technology it brings to market significantly changes the way high-definition television, video and other multimedia content are brought into and delivered throughout the home.

Growth drivers that made the exponential revenues possible include the analog-to-digital conversion that has led the explosion of digital multimedia content; the introduction of new multimedia applications that have led to anytime, anywhere consumption of digital content; and the bundling of voice, data and video by cable service providers into one package.

Henry, originally from St. Louis, moved to Silicon Valley 20 years ago to work for chipmaker Advanced Micro Devices (NYSE: AMD) after he made the switch from the technology side to management and pursued an M.B.A.

"We grew the flash memory business from $1 million a quarter to $125 million a quarter. It was definitely a big growth spurt, and we ended up taking market share away from Intel," he said.

After his stint at AMD, he worked briefly for Hyundai Electronics but was put off by the centralized control from Seoul and found the environment not as entrepreneurial as he had hoped.

He moved on and held senior management positions at C-Cube Microsystems, LSI Logic, LinCom Wireless and Pictos Technologies before taking over as the CEO of Entropic.

In the early days at Entropic, Henry said the challenge was to generate sales and get the product to a level where the customer could actually use it. Two years after he joined as CEO, the technology became a commercially viable product and the company saw significant revenues in the fourth quarter of 2005.

Entropic had 45 employees when Henry became CEO. He has since grown the company to more than 300 employees today.

"The next stage was to take it to a $100 million company and break even. So we grew our customer base and then bought up two other companies, which gave us additional scale. By the end of 2007, with the combined revenues, we decided to take the company public," Henry said.

Having reached that milestone, Henry is now concentrating on a three-pronged strategy to diversify the company's customer base and take it to $200 million.

Directions for the future include expanding the product line, reaching additional customers and expanding the geographical market to Asia and Europe.

Nagappan is a San Diego-based freelance business writer.

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