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To: Al Collard who wrote (4941)	11/19/2001 8:53:10 AM
From: J.E.Currie	Respond to of 11802

GALLIUM ARSENIDE is better investment than Gold or Oil right now Motorola creates unit for new compound chip CHICAGO, Nov 14 (Reuters) - Wireless technology giant Motorola Inc. >>A HREF="aol://4785:MOT"< on Wednesday said it has created a wholly owned subsidiary to focus on its breakthrough technology for a super-fast computer chip that combines low-cost silicon with speed-of-light optics. The Chicago-based company said the unit, Thoughtbeam Inc., will focus on commercializing the technology and will be led by Motorola Corporate Vice President Padmasree Warrior. The new technology, introduced in September, combines silicon, the basis of most computer chips, with gallium arsenide, an alternative chip-making material, to create an optical chip that is durable, cost effective and operates at higher speeds. Silicon-only chips, used in computers and other electronic devices, are durable and cheap, but electronic circuits tend to slow down any optical features that travel at the speed of light. Gallium-arsenide chips, often used in DVD video players, communications equipment and lasers, are 40 times faster than silicon chips, but are much more fragile and expensive. Because Motorola has filed more than 280 patents related to the new technology, other semiconductor firms such as Intel Corp., Texas Instrument Inc. and Advanced Micro Devices Inc. will likely have to get a license from Motorola to use it in their chips, analysts have said. Licensing the technology fits the strategy laid out by Motorola Chairman and Chief Executive Christopher Galvin on Tuesday when he defended the money-losing semiconductor business at a UBS Warburg telecom conference in New York. Many analysts have called for the company to spin off or sell the unit. He said the unit will focus on "liberally licensing" the new technology it generates, including several announcements over the next 90 to 180 days that will increase the unit's income and generate cash flow. It also will sell chips with higher profit margins and cut its capital spending in the unit by one half to two thirds. Motorola also said Wednesday it has signed its first licensing agreement for production of gallium arsenide-on-silicon wafers with British semiconductor materials maker IQE Plc . Motorola said it will invest $10 million in IQE as part of the British company's upcoming equity financing. Motorola also said IQE will grant it share warrants. IQE said Motorola was given an option to subscribe for a further $10 million. IQE expects to begin supplying evaluation wafers in the first half of 2002, Motorola said. The evaluation program will allow potential customers to assess the technology and gather their own information before they develop new designs, re-map existing products and explore other new options. "This breakthrough technology has the potential to benefit multiple industries, from semiconductors to communications to optoelectronics, and we plan to license it broadly," Warrior said. "The next step is to ensure that a supply of (gallium arsenide)-on-silicon wafers is made available to potential customers for their internal evaluation." Warrior was previously chief technology officer and director of the 1,100-member research and development organization for Motorola Semiconductor Products Sector, the company said. She reports to Edward Breen, Motorola's president and chief operating officer-elect.