OTHER ELECTRONICS
UPDATE
July 2006
McIlvaine Company
The University of Texas at Austin Closer to Opening a Research Institute
The University of Texas at Austin moved a step closer to opening a research institute that officials hope could make the Lone Star State a major player in the emerging field of nanotechnology.
University of Texas System
regents gave Chancellor Mark Yudof permission to seek grants from the state and
industry leaders to help create the South
West Academy for Nanoelectronics. The
research center would be part of a $30 million initiative that also would
include recruiting eight top faculty members to UT campuses in Austin,
Dallas
and Arlington.
One of the project's goals would be to develop a new kind of electronic switch
that replaces the transistors used in the chips of laptop computers, cellular
telephones, digital cameras and other electronic gadgets.
While engineers continue to
shrink transistors today, there's a limit to how small scientists can make them,
said Sanjay Banerjee, who directs UT-Austin's Microelectronics Research Center,
where the institute would be housed.
Nanotechnology is the science of manipulating the tiniest units of matter - no
larger than a billionth of a meter or 1/100,000th the diameter of a hair - and
making use of the unusual properties many substances exhibit at those scales.
Also, researchers plan to study ways nanotechnology could be applied to
biomedicine, energy and health care, said Robert E. Barnhill, the UT system's
vice chancellor for research and technology transfer.
UT-Austin has applied for a $1.5 million grant from the Nanoelectronics Research
Corp., a subsidiary of a consortium of six high-tech companies. The research
corporation already has issued grants to fund the creation of nanoelectronics
centers at the University of California,
Los Angeles and State University of New
York at Albany.
The UT System also wants semiconductor maker Texas Instruments Inc. and other
companies to contribute $10 million to fund endowments for professors. And it is
asking the state to chip in $10 million for other operational expenses.
If the UT system secures the funding, it will contribute $10 million for
facilities, labs and equipment for the new faculty members. It will then start
recruiting the eight faculty members this fall, Barnhill said. They most likely
would be on board within a year.
Technology Centers in Europe
In France, the Atomic Energy Commission and the National Polytechnic Institute of Grenoble have opened the doors of the micro- and nanotechnology research initiative. The French government has also launched a poles de competitivite (poles of competitiveness) project to install 66 R&D centers throughout the country. The Dutch government has also rolled out a similar program. In Germany, former Eastern Bloc industrial center Dresden has reinvented itself as a cutting-edge technology hub that welcomes multinational players across a swath of industries.
Advanced Micro Devices Inc.'s outlay of a whopping $2.5 billion to expand two microprocessor fabs in Dresden, Germany is testimony to the booming tech economy in Dresden and the surrounding state of Saxony.
Dresden today is home to "the largest cluster of microelectronics interests in Europe," said Thilo von Selchow, CEO and president of Zentrum Mikroelektronik Dresden (ZMD), a wafer fab once owned and operated by the East German government. In the past 10 years, the region has added 450 high-tech companies and 35,000 tech industry workers. Roughly 220 companies in the area are members of Silicon-Saxony.net, a trade association chaired by von Selchow that opens the door to collaborative work.
With investments of $4 billion each last year by Advanced Micro Devices (AMD) and Infineon Technologies AG (which has since spun out its memory business as Qimonda AG), Dresden boasts an infrastructure that spans the chip-manufacturing cycle. Beyond its fabs, Dresden has an enviable base of mask technology development expertise. Saxony hosts several of Germany's respected Fraunhofer-Gesellschaft institutes for applied research. The varied activity lends heft to Dresden's claim that it leads Europe in electronics innovation.
Dresden stands out for the synergy and competitive give-and-take seen among its diverse silicon vendors. The interplay nourishes an atmosphere of innovation that has kept Dresden hot and relevant, where others with a less diverse base might slip into stasis after an initial capital influx.
The international investment community has monitored the ramp-up and process conversion (from 90nm to 65nm) of AMD's 300mm wafer fab, as well as the activity at Qimonda's flagship memory fab. The Fraunhofer Center for Nanoelectronic Technologies, a public-private partnership among Fraunhofer-Gesellschaft, Infineon and AMD, grabbed headlines late last year, when its project for nanoelectronics got roughly $3 million in public funding.
Companies in Saxony cover far broader segments of the industry—from PCs to cellphones and automotive—than rival regions, said ZMD's von Selchow. He described that diversity as "a built-in shock absorber that helps us ride through the ups and downs of the electronics industry."
ZMD typifies Dresden's revival. Acquired by the state of Saxony in 1993, ZMD was privatized in 1999 when automotive-engineering company Sachsenring AG bought it for a symbolic 2 Deutschmarks (about $1.15).
The deal didn't exactly bring stability to ZMD. The company had to pull off a management buyout within less than two years of the acquisition, shortly before Sachsenring declared bankruptcy in 2002. Coming in at "the peak of the bubble" in the semiconductor market, von Selchow said, "saved our life." Hence the timing and the luck.
Government Incentives in
Germany
Investment at the state and federal levels has also been critical to Dresden's
revival. Industry players here say Infineon reportedly considered pulling out of
the city when the downturn hit the company hard, but changed its mind when it
realized that the incentive package it received from the state was too good to
abandon.
AMD received $469 million in German government incentives for its Fab 30 in 1997 and 545 million euros, in the form of capital investment subsidies and allowances, for Fab 36, a 300mm facility built in 2004.
Much of AMD's recent success against Intel Corp. in server microprocessors is credited to the "superior products" manufactured in Dresden and "superior time-to-market" enabled by AMD Saxony, said Hans-Raimund Deppe, corporate VP and general manager at AMD Saxony. "We've never missed a milestone in our ramp-up efforts," he said.
Collaboration among competing chip vendors has also been critical to the success of the region. In 2002, AMD, Infineon and DuPont jointly established an Advanced Mask Technology Center (AMTC). Japan's Toppan took DuPont's place in the partnership after acquiring the U.S. company in 2004.
AMTC is both the R&D and pilot-production site for optical photomasks for advanced lithographic generations, including both dry and immersion 193nm processes and extreme UV. Pointing in the direction of AMTC—located just beyond the green fields that surround AMD Dresden's fabs—Deppe said, "We have the best mask house in the world available to us next door, just a three-minute bicycle ride away."
No high-tech campus is complete without a reputable R&D institution nearby. Dresden's industry players have the Fraunhofer Institute Photonic Microsystems (IPMS), one of the 58 centers under the Fraunhofer umbrella. After German reunification, Fraunhofer's
Microelectronic Devices and Systems group, based in the western city of Duisburg, expanded to Dresden in an effort to leverage the region's engineering talent. Today, Fraunhofer IPMS' activities range from actuators and organic LEDs for displays to photodiodes and ASICs. While neither AMD nor Infineon is an IPMS client, the companies caused a sizable dip in IPMS' head count in the late 1990s when they convinced many of its scientists and engineers to join private industry, said Heiko Menzel, head of contracts and patents at IPMS.
Grenoble, France
Maison des Micro et Nano Technologies (Minatec) is a huge European R&D site dedicated to micro- and nanotechnology research. Backed by the French Atomic Energy Commission (CEA) and the National Polytechnic Institute of Grenoble (INP-Grenoble), Minatec represents a way to concentrate globally scattered nanotech R&D into existing and new research facilities in the city. "We did not start Minatec from scratch," said Jean-Charles Guibert, director of CEA, who is responsible for technology transfer and commercialization.
With 2,000 scientists and engineers participating, Minatec is based on the existing local high-tech infrastructure. Members include CEA-Leti, one of Europe's largest microelectronics research institutes; INP-Grenoble, a French technical university; and industrial partners like the Crolles 2 Alliance of STMicroelectronics, Philips and Freescale Semiconductor. What's new is a facility that gives actual space, tools and expertise to companies that want to come to Grenoble for their R&D projects.
"At a time when corporate America continues to downsize R&D, with big corporations more driven to 'buy' technologies through acquisitions, Minatec can serve as a source of innovation," said David Holden, strategic-marketing manager at CEA. For startups in the United States, Holden said, "Minatec could offer a stable pool of researchers and engineers."
In short, for high-tech companies interested in specific R&D projects, Minatec is pitching three attractions: "access to people, facility and funding," Holden said.
Minatec offers R&D office space with access to tools and equipment; research engineers from CEA-Leti and INP-Grenoble; and a chance to apply for European funding, an otherwise tough act for a company with no presence in Europe.
With an annual operating budget of $128 million to $192 million, Minatec has existing and new research facilities including 200- and 300mm pilot lines and 10,000m2 clean rooms. It expects to attract 4,000 researchers and engineers by the end of 2007. About 70 percent of Minatec's 100 industrial partners are French, Guibert said. The others include such global giants as Atmel, Freescale, STMicroelectronics and Texas Instruments.
For U.S. companies understandably leery of the notorious French bureaucracy and France's reputation for laid-back business practices, Guibert insists that Minatec is taking a decidedly "un-French" approach. CEA and INP-Grenoble avoided establishing Minatec as a "company," either private or public, thus eliminating at least one layer of bureaucracy. Rather, Minatec is "a brand," designed to attract researchers and engineers, and to bring in R&D projects focused on applied research and technology transfer. The research facilities here belong to CEA, not to Minatec. "There are no employees working for Minatec, as they all depend on their own
Big Korean Firms Put Their Money into China
Big Korean corporations invested US$350 million in China in the first quarter of this year, a whopping 75 percent increase from a year ago, the Ministry of Finance and Economy and the state-run Export-Import Bank of Korea said Monday. The Samsung Group raised its investment in China this year by 60 percent to US$800 million from last year’s $500 million. Samsung Electronics is to invest $240 million in expanding its liquid crystal display/semiconductor module factory at its Suzhou LCD facilities in China to meet sharply increasing global demand. Samsung Heavy Industries, whose investment in China had been sluggish since 1996, also started in March to build a hull block factory with 500,000 tons annual capacity in Rongcheung, Shandong Province. The company is to invest a total of US $350 million in the project and aims to complete it by the end of 2008.
By contrast, big corporations’ investment in facilities here have raisen a mere
4.3 percent during the same period, the National Statistical Office said. Their
investment in China
peaked between 1995 and 1996 but shrank during the financial crisis of the late
90s. It has been on the rise again since 2003.
The increase is due to the fact that the Chinese economy is recovering after two
years of contraction due to belt-tightening policies. In big cities, high-end
LCD and PDP TVs sell like hot cakes, and sales of passenger cars are also
growing fast. The LG Economic Research Institute expects that
China will see sales of flat screen TVs more
than double from last year’s 1.9 million to 5 million this year. Ahead of the
2008 Olympic Games in Beijing and the Shanghai World Expo in 2010, China is
increasing investment in social overheads, and there are signs of a recovery in
its real estate market, which contributes to a sharp rise in sales of
construction equipment and machinery.
Korean corporations are investing in two ways. First, IT companies and carmakers
are boosting their investment to benefit from Chinese demand. Samsung
Electronics and LG
Philips LCD’s plan to
expand their LCD module factories there to meet increasing demand for high-end
home appliances and telecommunications devices in China. Hyundai Motor is
building a second factory in Beijing by investing $1 billion to benefit from
rising demand there. SK Telecom Co., the nation’s largest mobile-phone operator,
completed an agreement to buy $1 billion of bonds convertible into a 6.7 percent
stake in China Unicom Ltd, the nation’s second largest mobile phone operator, to
tap the world’s biggest wireless market by subscribers.
Second, domestic heavy industry — steel makers, shipbuilders and energy
companies - are moving their manufacturing base to China to avoid the effects of
the strong won. Daewoo Shipbuilding & Marine Engineering and Samsung Heavy
Industries announced plans to build hull block factories there both last year
and this year. POSCO is considering buying into one or two steel makers there,
and SK Corp is reviewing plans to buy coal mines in China.
They turn to China because they cannot find attractive investment targets here,
experts say. Strict regulations, widespread anti-corporate sentiment,
acrimonious labor relations and weakened export competitiveness are all pushing
them out of the country.
McIlvaine Company,
Northfield, IL 60093-2743
Tel: 847-784-0012; Fax: 847-784-0061;
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