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TR: It sounds as though not too many small companies have joined Sematech.

SPENCER: Unfortunately not, although big companies with small semiconductor divisions-such as Hewlett- Packard, Digital Equipment Corp., and Rockwell-are members. That experience is typical: recently established U.S. efforts to develop advanced batteries and the next generation of automobiles, not to mention Japanese and European consortia, have seen a similar reluctance on the part of smaller companies, even though the benefits to them could be great.

TR: Might smaller firms fear divulging information about their processes, not to mention their problems?

SPENCER: That’s entirely possible: we find that the employees companies send to work at Sematech are initially reluctant to talk about their problems and capabilities because they think they are unique. But after a short while they find that other companies are facing the same challenges and they can solve them and become more efficient and effective if they work together-it’s an amazing revelation. In fact, if you ask our member firms about their major benefit from Sematech, they won’t say the improved equipment or the advances in employee training but the better communication-both horizontally among member companies and vertically between member companies and suppliers. 

TR: Does that kind of cooperation make Sematech a model for other industrial consortia?

SPENCER: We think it does-the U.S. car and battery consortiums are following our lead. And the imperiled textile industry, which is confronting many of the same problems we faced, recently created a consortium in collaboration with universities and national labs.

What’s fascinating is that the Japanese have formed about four or five consortia in the past year that are almost identical to Sematech. And Europe has begun to move its electronics consortia in a similar direction.

TR: How so?

SPENCER: Cooperative European R&D at first focused largely on developing products such as VCRs or memory chips, but those efforts didn’t prove very successful. So the Europeans are now concentrating on infrastructure-developing new equipment and funding research on materials. They have some problems we don’t: it’s hard enough to get various U.S. companies to work together on any kind of project, but imagine trying to convince 15 nations in Europe to do so. I don’t envy them.

TR: Should foreign companies be allowed to join Sematech?

SPENCER: That’s a major topic of discussion for the board right now: should we remain a national consortium?  I think the issues we face today, whether related to economics, the environment, or health, are planetary issues. You can no longer do anything in one country that doesn’t have an impact on the rest of the world. What’s more, if Samsung and Hitachi build factories in the United States, the Environmental Protection Agency and the Occupational Safety and Health Agency are going to be investigating them, so companies might as well develop a common set of standards. And Sematech is a model for doing that because we’ve been able to find a way to cooperate yet compete very strongly in the market. 

And chip makers from different countries are in fact starting to cooperate on setting environmental and health goals and complying with regulations. For example, we’re working on ways to reduce the use of water and chlorofluorocarbons in the chip manufacturing process-there’s no reason for each company or country to figure out how to do that individually.

We are also cooperating internationally on the move to larger wafers. One of the reasons this industry has been so productive is that the silicon wafers from which the chips are made get bigger: today we use 8-inch wafers but the industry wants to move to 12 inches. So we’ve started a program in which the wafer suppliers and the international semiconductor companies, including Korean, Taiwanese, and European firms, are all working together to set the standards for the equipment needed to process these larger wafers. We think we can save several billion dollars in what will probably be a $10$15 billion conversion by having a single set of standards, and jointly measuring how the new equipment performs.   

Setting Priorities for R&D

TR: What’s your vision for manufacturing?

SPENCER: I think the United States could make a significant gain if we could apply our strengths in managing complex technological systems to streamlining the manufacturing process. By inventing the production line, Henry Ford set the tone for manufacturing throughout the industrial world for 75 years. And after the Second World War the Japanese improved the system by recognizing that if you bring parts to the factory “just in time” and you give a good deal more authority to the people working on the production line, you’ll make higher-quality products at lower cost. So companies around the world adopted those practices.

But think about taking manufacturing to an entirely new level in which you integrate it with design and the customer. For example, if an engineer alters the specifications for a car fender, the factory immediately reprograms all the stamping tools on the production line and changes all the corresponding information available to every worker, shift manager, plant manager, and even customer. Doing that requires networking software-a field in which the United States leads: not a single network protocol or computer architecture in use anywhere in the world, except for maybe Nintendo, was developed anywhere else. And all programming languages are based on English-we own this business. Why can’t we apply it to manufacturing? And what better place to start than semiconductors, because you can measure every step in the chip-making process using techniques already integral to production.

We should be able to set up recipes so that if the next batch of wafers or circuits coming through the factory requires a slightly different manufacturing approach, you just type in b instead of a and the system downloads the right specifications into the furnace, etcher, or other tool. The shift manager could instantly find out which tools are being used and which machine has got to have preventive maintenance tomorrow. The plant manager would know the status of every job in the plant. The customer could find out that custom microprocessors are at “final metal” and are going to “test” tomorrow.

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