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Storm surrounds next step in chip technology//
Consortium led by Intel moves to control technology that
could be worth billions
by Jeff Nesmith
Nov 3 1997 8:14PM CST, Austin American-Statesman
WASHINGTON _ People who have seen it say that a machine housed in a
government laboratory in California appears an unlikely contraption for all the stir
it is causing _ a collection of mirrors, a laser bolted to a stainless steel lab bench,
some clamps and other gadgets. But despite its awkward appearance, the machine
is the most sophisticated device of its kind in the world and may hold the key to the
future of one of America's largest and fastest growing industries: computer chips.
It is also at the center of a gathering storm of protest in Congress and among
Clinton AMD Inc. The three companies signed an agreement with the Energy
Department earlier this year, pledging to invest $250 million in pushing the
embryonic technology into commercial production.
If the agreement leads to the next generation of steppers _ and there are competing
technologies _ Intel has said it does not believe any U.S. manufacturer has the capacity to
supply its needs.
Therefore, the consortium has talked with Nikon and ASM Lithography, a Netherlands
company, about eventually manufacturing the envisioned new generation of steppers.
"We are very concerned about this," said William A. Reinsch, Commerce undersecretary
for export administration.
"Agreements such as this are supposed to help American production and American
manufacturing, and I think we all want to take a close look at whether this particular one will
do that or not."
Reinsch's office assembled officials from the White House and several Clinton administration
agencies _ including the Pentagon's Defense Advanced Research Projects Agency and the
National Security Agency, which operates America's spy satellites _ last week to discuss
concerns that strategic U.S.-owned technologies are about to be turned over to foreign
interests.
"There are pieces of this technology that may have direct military application as well,"
Reinsch said, adding that he wants to make sure U.S. export controls on such technology
won't slip away because of private agreements with foreign manufacturers.
Members of Congress also are demanding answers.
In a letter to Energy Secretary Federico Pea earlier this month, four Democratic
representatives, George Brown of California, John Dingell of Michigan, Tim Roemer of
Indiana and Ron Klink of Pennsylvania, charged that Energy's agreement with Intel
amounted to "product development work for foreign interests, partially paid for by U.S.
taxpayers."
"This would result in serious and unprecedented access to U.S. national defense labs by
foreign companies," the four House members wrote.
And Bush and Clinton, the agreements have been seen as a way to keep scientists at
Sandia, Livermore and the Energy Department's other huge nuclear weapons laboratories
busy after the Cold War ended.
However, the projects ended abruptly last year, when Congress terminated funding for
Energy Department-private industry cooperative research agreements. Work on the
extreme ultraviolet lithography prototype ended on Sept. 30, 1996.
The exact features of the machine are cloaked in secrecy, but it reportedly has
demonstrated basic techniques in at least some of the processes necessary to produce and
manage the extreme ultraviolet light.
Intel spokesman Howard High said in an interview that when government funding was
eliminated, his company immediately began discussions with the Energy Department, aimed
at keeping the research alive with private capital.
Under an agreement signed in April, the new Intel-Motorola-AMD consortium agreed to
put up $250 million in cash and other support to continue the research. The new consortium
is known as Extreme Ultraviolet Limited Liability Corp.
If the agreement leads to a commercialized stepper, the consortium will have the right to
license it to a manufacturer, Staffin said. The department has said its agreement with
Extreme Ultraviolet requires that "substantial manufacture" of the steppers occur in the
United States.
Critics say that term could mean that essential components, based on technology developed
in the government laboratories, are to be produced elsewhere, with only the final assembly
done in the United States.
'Loopholes'
One of the first persons to cry foul over the new agreement was Arthur W. Zafiropoulo ,
president of Ultratech Stepper.
Zafiropoulo said his company was the largest private investor in the original extreme
ultraviolet research agreement with the Energy Department. He charges that the new
agreement and the Intel consortium's acknowledged interest in licensing foreign
manufacturers mean the technology would be diverted to Japan and Europe.
He dismisses Energy's assurances that the new agreement with the Intel consortium contains
safeguards to keep production in the United States.
"They say there are protections in this agreement, but you could drive a truck through the
loopholes that are in it," said Zafiropoulo.
Zafiropoulo has set up his own limited liability company and says he can raise money on
Wall Street to fund the research, as well as commercialization of the machines if they can be
developed.
Under that arrangement, he said, the technology would stay in the United States. He said the
machines will sell for up to $25 million each and the annual demand could be for as many as
1,000 of them.
"We're talking about a $25 billion-a-year industry," he said, adding that he hoped Intel
would decide to join his consortium. "I think if an idea was born in America, it ought to stay
in America."
High, the Intel spokesman, expressed skepticism that Zafiropoulo could ever raise the kind
of capital that will be needed to develop the technology or even the manufacturing capacity
if someone else develops it.
He said that the effort to turn what amounts to a laboratory experiment into a nuts-and-bolts
manufacturing machine is a risky venture for Intel and its partners.
He said only three companies, Nikon and Canon of Japan and the Netherlands' ASM
Lithography, have the manufacturing capacity to produce the stepper machines members of
the consortium will need. The entire U.S. stepper industry accounts for less than 10 percent
of manufacturing capacity worldwide and Ultratech Stepper for only a portion of that, he
pointed out.
"The United States stepper companies cannot produce the number of machines that two or
three companies would need, let alone the whole U.S. industry," he added.
(Copyright 1997) |
