Mike Buetow

My old friend Gene Weiner has for years published a must-read newsletter each month in which he shares his thoughts and tidbits on the electronics manufacturing industry. And while I don’t typically editorialize about editorials, something Gene wrote bears further consideration:

Who will take the necessary risks? How much will time to market affect the new advances? No one seems to be facing or discussing the necessary key to make all this work: trust. There seems to be a profound lack of it among various members of the manufacturing/development/supply chain communities. There is even a fear of introducing new products to markets in China where ownership is primarily domestic.

In response, Lee Parker offered an audacious reply:

I thought your reference to trust was insightful. We both remember the days when Bell Labs was responsible for developing most of the new technology for the electronics industry. We constantly kept the industry informed of what we were doing and discovering. We really did not worry much about competition so there was no need for trust. Until we can find a way to return to this position, I do not believe much progress is going to be made. I suggest that a federal agency be formed to develop leading-edge electronic technology much like NASA once did for the aircraft industry and Sandia [National Labs] still does for the nuclear weapons industry. A technology steering committee formed by people from the industry and academia would provide technical leadership. All intellectual information would be shared equally by all nationals. I realize this flies in the face of capitalism, but we must live in the world we are given, not the one we would prefer. Most of our competitors are already being subsidized by their governments. We are forced to do the same or fall along the wayside.

For those who don’t know Lee, he has a Ph.D. in aerospace engineering and spent more than 25 years working for Bell Labs. And while some will say he overstates Bell Labs’ role, what he proposes has worked in the past.

Sematech is a great example. After more than 25 years, it’s hard to definitively say that joint government-industry consortium saved the American semiconductor manufacturing industry. But most watchers credit Sematech with bringing industry together in a productive and consistent manner, and the rate of increase for R&D costs for new-generation chips has dropped by two-thirds since its founding. That’s a considerable achievement.

I certainly remember how Sematech helped turn things around for the semi industry. But I also remember multiple attempts at starting bare board institutes, such as the Interconnection Technology Research Institute, which was modeled after Sematech but never attracted the necessary government support and eventually died away. Plenty of other truly effective consortia exist, iNEMI and HDP User Group among them, but absent the government support and singular clarity of mission that has made Sematech so formidable.

The veterans will recall the days when Texas Instruments, Digital Equipment, Motorola, Boeing, Raytheon, Hughes and yes, Bell Labs’ parent AT&T, were omnipresent at industry meetings and conferences, delivering papers and sharing best practices. Some of these names still exist, of course, but they take a very different form today.

A big difference is the supply chain is very different today than it was when Sematech was formed in 1988. All those OEMs – and many others around the world – were vertically integrated, with everything from boards to assemblies to, in many cases, chips all built by the same company. Having all the responsibility for bringing product to market under one corporate umbrella forced these players to think broadly about what worked and what did not. I vividly recall that changing when DEC started selling off its board shops and began treating its suppliers as replaceable spokes rather than vital cogs. And DEC was hardly alone.

I love Lee’s idea, but I don’t think there’s much appetite for it at the government level. The tides are against agencies giving direction to industry. The big defense contractor lobby could probably make it happen, but they lack incentive to change, given the money continues to flow almost unabated despite a number of high-profile cost overruns and product failures. It’s certainly more convenient to be able to beat up your supply chain for lower prices than to squeeze your own colleagues. As one veteran of industry and consortia told me, “The groups of past performed their efforts for the good of the industry. Technology advanced and everyone benefitted. Today, it is, ‘What’s in it for me?’ ”

I’m eager to hear readers’ thoughts on this, however. Absent a government-industry technical agency, is the US shooting itself in the foot? Send me a note or share your thoughts in the Board Talk forum on our respective websites.

Happy new year!

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