Defense Dept. Hands Over $100 Million to Sematech

WASHINGTON — The Defense Department on Thursday signed an agreement releasing $100 million in federal funding to Sematech, the consortium of 14 U.S. semiconductor companies, for use at its new Texas research center in an effort to overtake Japan’s leadership in the industry.

Under the agreement, which Sematech Chairman S. L. (Sandy) Kane called an “unprecedented partnership between business and government,” the Pentagon is expected to continue funding for the Austin facility at the rate of $100 million annually for four more years.

For their part, Sematech companies have contributed $40 million to the initial budget and, together with other firms to be recruited later, will take over the entire funding of the project when federal money runs out.

Kane said the research center should go into full operation by October in a $50-million facility donated by the University of Texas and the state government.

“We’re not going to be working in product design,” the Sematech chairman said. “This is for, after I’ve developed a new widget, how can I manufacture it best. And the Japanese have made that a science.”

‘Copy Some Ideas’

In addition to new tools and manufacturing techniques, Kane mentioned improved inventory control as methods that may be developed in Austin enabling U.S. manufacturers to regain the position they lost when they concentrated their research on new products.

Asked if some of Sematech’s work will include a close study of Japanese methods, Kane said: “You can sit here and cry a lot or you can copy some good ideas.”

While federal funding is vital to the project, he emphasized that it is “not defense oriented. If you went back to the original defense policy recommendations a year ago, they recognized that a healthy semiconductor industry is essential to national defense. It’s a commercial enterprise.”

Rep. J. J. Pickle (D-Tex.), a congressional sponsor of the project, said that some personnel are already working in Austin. He and Kane said that a core of 70 employees at Sematech are already laying out research projects.

When the center is in full operation, it will employ as many as 700 scientists and technicians. The project would be a morale booster, Pickle said, in an area that has been economically depressed by low oil prices.

Foreign Firms Ineligible

Kane said that a chief executive for the center will be announced “shortly.”

Tools and techniques developed by the center will be available for use by member companies and those who join later if they pay “back dues,” Kane said. He said foreign firms are ineligible for membership now, although some have expressed interest.

Among the initial participants are companies such as Hewlett-Packard, IBM, Motorola, Rockwell International and Texas Instruments. The Defense Department, despite its contribution, will not be represented on the board.