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Editorial: Are USA Government Contracts in Jeopardy?
... There appears to be a great deal of uplifting news lately from all over the world about new R&D contracts being let to compound semi industry researchers. Many of the contracts are for our industry's wonderful energy-saving technologies, and many come from confident, forward-looking governments. In contrast, in the...
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RFMD Announces Restructuring and Focus Shift
CompoundSemi News StaffMay 7, 2008...RF Micro Devices (RFMD) of Greensboro, North Carolina USA has announced that it is reducing its investment in wireless systems such as transceivers and GPS solutions. RFMD reports that it is shifting its focus to its core semiconductor component opportunities including cellular front-ends, the components in its Cellular Products Group (CPG), and the components in its Multi-Market Products Group (MPG).
The company expects to eliminate product development expenses related to its wireless systems business by about $75 million this fiscal year beginning in the June 2008 quarter. RFMD plans to realize the full benefit of the expense elimination in the December 2008 quarter. In the short-term the company estimates about $40 million - $50 million in one-time restructuring costs over the next two quarters. The company said that two-thirds of the restructuring expense is expected to be non-cash with the global staff reduction of 350 employees.
Bob Bruggeworth, president and CEO of RFMD, said, "These strategic actions will enable RFMD to deliver more predictable financial results and substantially higher profitability.” He continued, “We are investing in growing markets where we have a demonstrated track record of success, and we will measure our progress using operating income and return on invested capital (ROIC) as key performance metrics.”
He concluded, “We are confident the steps we have taken will increase shareholder value and provide significant long-term benefits to our global customers and stakeholders." Company News Release May 7, 2008...WJ Communications, a designer of RF products and solutions for the wireless infrastructure market based in San Jose, California USA, has introduced a +5V active bias InGaP HBT gain block amplifier, the WJA1021. The company contends that the device is among the first 5V gain block amplifiers in the industry that do not require any external matching components.
It offers +37 dBm OIP3 at 2 GHz in a SOT-89 package and is reportedly ideal for general-purpose high linearity applications within the 50 to 4000 MHz frequency range. The new WJ amplifier offers what the company describes as exceptional blend of power, gain, linearity, and supply current performance. At 1.9 GHz, the WJA1021 typically provides 17.5 dB gain, +37.5 dBm OIP3, and +19 dBm P1dB, drawing only 90 mA current from a 5V supply. The amplifier reportedly also works well at the 900 MHz cellular band with 18.5 dB gain, +40 dBm OIP3, and +20 dBm P1dB. The WJA1021 consists of Darlington-pair amplifiers using a high reliability InGaP/GaAs HBT process technology, and is internally matched to 50 ohm. WJ Communications says that the new addition to the WJA family helped to complete selection of cascadable gain blocks that complement different gain, OIP3, and Icc levels. Company News Release Aixtron Sells MOCVD System to Braun Institute for GaN R&D
CompoundSemi News StaffMay 7, 2008...Aixtron AG announced that the Ferdinand-Braun-Institut für Höchstfrequenztechnik (FBH) ordered an AIX 2600G3HT Planetary Reactor system with 8x4 inch capacity. FBH of Berlin, Germany, says it will use the system to strengthen its research and development activities in GaN based UV- LEDs, laser diodes and GaN HFETs.
Dr. Markus Weyers, Head of the Materials Technology Department, commented, “The FBH has accumulated considerable experience with a wide range of Aixtron MOCVD systems. We already have an AIX 2600G3HT Planetary Reactor system with 8x3 inch and 11x2 inch capacity in operation. I am therefore very confident that we can build on this to quickly and efficiently grow UV-LEDs. The new tool will especially allow us to prepare high temperature AlN thin films with high crystalline quality uniformly and reproducibly. We know that the AIX 2600G3 system is especially suited for the uniform and reliable growth of such challenging semiconductor materials and will make a great contribution to this exciting R&D project.”
Aixtron News Release
Arrowhead Sells Subsidiary Aonex to AmberWave Systems
CompoundSemi News StaffMay 6, 2008...Arrowhead Research Corporation of Pasedena, California USA, announced the sale of its majority owned subsidiary, Aonex Technologies to AmberWave Systems. According to the agreement, Amberwave will pay Aonex shareholders up to $7.95 million in earn-out payments in addition to running royalty on sales of solar products incorporating Aonex’s technology.
Arrowhead Research Corporation and Caltech Professor, Dr. Harry Atwater, launched Aonex Technologies in 2004. The company’s original focus was on commercializing the materials integration technology developed at Dr. Atwater’s lab for high efficiency solar cells. The company later expanded into the LED and laser markets. Aonex’s primary product is an innovative substrate that could enable the fabrication of higher efficiency compound semiconductor devices at lower cost and higher yields.
Aonex’s technology is expected to enhance the material technology product portfolio offered by AmberWave Systems.
“AmberWave’s technical capabilities and business expertise make it the perfect company to bring Aonex’s products to market,” said Aonex CEO and co-founder Sean Olson. “There is a shared vision of using materials integration to develop better, more cost effective semiconductor devices.” Arrowhead Research Corporation News Release TriQuint to Supply MMICs for New Army Radar
CompoundSemi News StaffMay 5, 2008...TriQuint Semiconductor, an RF front-end manufacturer based in Hillsboro, Oregon USA, reports that it has begun shipping gallium arsenide (GaAs) monolithic microwave integrated circuits (MMICs) to Lockheed Martin Radar Systems for the manufacture of EQ-36 Counterfire Target Acquisition Radars. The EQ-36 Counterfire Target Acquisition Radar systems are reportedly being developed for the U.S. Army to identify, track, and help neutralize threats posed by mortars, artillery, and missiles. TriQuint’s MMIC’s are to be used as chipsets in the new phased array radar.
Unlike previous radar systems that date back to the Cold War, the EQ-36 system allows a 360 degree view. Lockheed Martin explains that this capability enables operators to more easily and rapidly identify hostile mortar, artillery, and missile fire. Lockheed Martin reportedly demonstrated a fully-operational prototype of the EQ-36 Counterfire Target Acquisition Radar at the Association for the United States Army (AUSA)’s 2007 exposition in October. Lockheed Martin said it expects to deliver the first of the completed radars to the U.S. Army by mid-2009.
Dr. Brehm of TriQuint noted, “While fulfilling its contract for MMIC products, additional TriQuint components are being reviewed for use in other phases of the on-going program” TriQuint News Release Emcore to Supply CPV Receivers for ES Solar
CompoundSemi News StaffMay 5, 2008...Emcore of Albuquerque, New Mexico USA, has agreed to supply ES System of Gwang-Ju, South Korea, concentrating solar cell receivers. The $28 million contract is for Emcore to supply the concentrating photovoltaic receivers for a fully licensed and funded 70 MW solar farm in South Korea. According to Emcore, the agreement includes an advanced deposit to ensure production priority. Emcore says that production of the CPV receivers has begun, and shipments are scheduled over the next 24 months. The agreement has provisions for accelerated deliveries in addition to future purchase options under the same terms.
David Danzilio, Vice President and General Manager of Emcore's Photovoltaics Division stated, “We continue to see increased demand for this enabling product from customers around the world and this purchase order further diversifies our growing terrestrial component backlog, which now exceeds $110M. Our second automated receiver assembly line has entered into volume production and we expect to commence shipments from the third receiver line in June. When combined with the recently completed CPV solar cell capacity expansion, this assembly capability positions Emcore as the only vertically integrated CPV receiver manufacturer to the global concentrating photovoltaics industry. "
James Park, Chief Operating Officer of ES System commented, “We are convinced that the Emcore cell receiver technology provides the best solution for high concentration CPV systems both now and in the future." Emcore News Release BCC Research Predicts CVD Market to Increase to $11.8 Billion by 2013
CompoundSemi News StaffMay 5, 2008...BCC Research has released a report about the markets for chemical vapor deposition (CVD), ion implantation, and molecular beam epitaxy (MBE).
According to the report, the global market for chemical vapor deposition (CVD) will increase from $7.0 billion in 2007 to an estimated $7.3 billion by the end of 2008. The report predicts that the market for CVD should reach $11.8 billion by 2013 with a compound annual growth rate (CAGR) of 10.2%. BCC Research contends that the ion implantation segment will grow at a CAGR of 10.1% between 2008 and 2013 and be worth $4.4 billion by the end of the study period.
The BCC report also forecasts that the molecular beam epitaxy (MBE) equipment market is expected to reach $475.4 million in 2008. The reports says that the MBE market is projected to grow at an 8.1% CAGR through the end of the forecast period to reach $701.3 million by 2013.
BCC notes that it previously published reports about the physical vapor deposition and atomic layer deposition markets. BCC says that the CVD report will compliment the other report providing analysis of the three thin-film technologies. BCC News Release
St. Andrews Researchers Created Organic Laser Powered by LED
CompoundSemi News StaffMay 5, 2008...Researchers at the University of St. Andrews in Scotland, have created a visible organic laser that can be tuned to any color of the rainbow. The researchers pointed out that the laser is powered by a simple indium gallium nitride (InGaN) LED, rather than another laser, which was previously required for an organic laser. The physicists at St. Andrews contend that in addition to being more compact than previous organic lasers, they can be produced at a fraction of the cost.
Professor Ifor Samuel and Dr Graham Turnbull have used flexible plastic-like semiconducting materials to make a number of new innovations including a light-emitting sticking plaster for the treatment of skin cancer. According to the researchers, the technology could revolutionize point of care diagnosis and treatment. Professor Samuel said, "For over forty years visible organic lasers have required another laser to make them shine. We have now developed a low-cost, easy to make plastic laser, which converts the light from an LED (of the kind used in torches and traffic lights) into laser light. LEDs can be battery powered, and so this hybrid LED-laser approach can make very simple compact emitters. The lasers can give a variety of colors and are suitable for various applications such as spectroscopy or chemical sensing." The researchers findings are explained in the April 23 issue of Applied Physics Letters. Applied Physics Letters Abstract, St. Andrews University News Release Kopin Selected for Award of NASA Solar Cell Development Contract
CompoundSemi News StaffMay 1, 2008...Kopin of Taunton, Massachusetts USA, a leading provider of heterojunction bipolar transistor (HBT) wafers, has been selected for a solar cell development contract from NASA. The contract is Phase II of a Small Business Technology Transfer Research (STTR) program to develop indium nitride (InN)-based quantum dot solar cells. Kopin's will partner with groups at Virginia Tech and Magnolia Optical Technologies.
"The goal of this STTR program is to develop high-efficiency solar cells that are resistant to extreme conditions while achieving high solar electric power conversion efficiency," said Dr. Roger Welser, Kopin's Director of Technology and New Product Development. "The advanced patent-pending solar cell structure incorporating InN-based nanostructures can harness a very large fraction of the solar spectrum while minimizing the effects of high temperatures and high-energy radiation. This technology will enable photovoltaic power systems of future NASA space exploration missions to operate in extreme environments with high temperature and radiation exposures."
Dr. John C.C. Fan, Kopin President and Chief Executive Officer commented, "This STTR project is part of Kopin's long-term goal to address the emerging terrestrial renewable energy market by realizing the ultimate objective of high conversion efficiency at low costs.” Kopin News Release Our news features are reported
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The
McDonald Report
Commentary & Perspective...
Are USA Government Contracts in Jeopardy?
Jo Ann McDonald, founding editorMay 6, 2008...There appears to be a great deal
of uplifting news lately from all over the world about new R&D contracts
being let to compound semi industry researchers. Many of the contracts are for
our industry's wonderful energy-saving technologies, and many come from confident,
forward-looking governments. In contrast, in the USA, we're seeing the first
disturbing signs of the USA government pulling back on what were presumed to be
established, secure R&D contracts.
When a relatively young, small, R&D-based
compound semi industry company quietly files for bankruptcy and someone sends
me an email with the local article stating the situation, a little alarm goes
off in this industry historian's head. What's at the heart of the problem? Did
some scoundrel from a foreign land renege on financing again? Was the startup
poorly managed? In this case the blame is being put on the USA government citing
the fact that "the military has scaled back research programs in order
to spend more on the war effort." After reading that, the little alarm
in my head instantly grew. As an industry commentator and veteran advanced technology
journalist, I feel a heads up to our readers is in order.
The company that filed for Chapter
7 bankruptcy in the USA state of Pennsylvania is three year old Caracal
Inc., headquarted in Ford City. The company is in the silicon carbide (SiC)
business and made its claim to fame via a lucrative Navy contract worth over
$1 million to supply SiC-based semiconductors for use in what was to be an all-electric
powered warship. News of the bankruptcy filing was in the Tribune Review,
Wednesday edition, April 23, 2008. (Link
to article) It noted that the Navy was 90% of Caracal's customer base, which
doesn't surprise me at all. Unfortunately, most startups chasing after government
funding put all their eggs in one basket, and most hatch rather well, providing
the USA is in a pro-R&D funding mode.
Looking back, whenever the USA goes
into anti-funding mode due to some perceived priority or another, I visualize
major government CS industry R&D advocates at the various funding agencies standing before their
beleaguered program managers and asking: "Which puppies shall we drown
today?" Government program managers hate losing funding for their programs,
especially when they've already been allocated the funds and assured the contractors that the funding is secure and the program will surely
go ahead. The only thing they hate worse is having to tell their contractors
that they won't be renewing.
Caracal is evidently now a casualty
of war, according to defense policy analyst John E. Pike, director of GlobalSecurity.org
in Alexandria, Virginia who was quoted in the Tribune Review article that "the
all-electric ship project 'comes and goes,'shifting in priority on the Navy
budget," noting also that... "Anything related to shipbuilding is
going to be in a really tight space these days and that research and development
spending in general is flat."
According to a follow-up
Trib article, Caracal plans to liquidate its assets. That article notes
that "the borough" that encompasses Ford City and the Caracal plant
is extremely concerned about the impact the bankruptcy will have on the community
since Caracal pays the town about $228,000 in rent each year under its lease,
which the borough uses to pay off debt service on the industrial development
project. The local hope is that some entity will step in that is able to utilize
the infrastructure as well as the skilled labor.
After over 30 years advising semiconductor
startups how best to succeed, I have to confess that I can't guarantee success.
I can, however, identify signs of possible failure. One blatant sign of potential
trouble is when the startup instantly goes out and buys fancy furniture to impress
would-be customers (and themselves). The next is to get themselves willfully
into patent litigation, which eventually transfers their precious venture funding
into the pockets of patent attorneys. The next obvious mistake is to put total
faith in an ever fickle USA government.
I remember when diamond technology
was the brief rage. The naïve went hell-bent for diamond-based ICs. Dream
on. We couldn't even make a good GaAs IC back then! The sensible dabblers in
diamond balanced their offerings with diamond heat sinks, and by the time diamonds
were declared dead... mostly by the government... the sensible dabblers were
already into other products, many of which were destined for commercial applications.
I feel genuinely bad for Caracal,
but they definitely have assets worth note. Plus, Caracal has good contacts within
the tight-knit wide bandgap circle. They have good IP, as proven by cross-licenses already
with Cree and cooperation deals with Kyma, so one alternative could be to meld their assets with someone stronger. Heck, we've been predicting consolidation among
WBG players anyway. But the main message I'd like to get across is to not fall into the trap of
putting such a large percentage of your business in just one place, especially if
it's a proven fickle place. Think commercial apps from the outset. Avoid known
traps. Stay smart and focused, but also spread your bets. That way you're more likely to be a cat that lands on your feet when a lucrative funding
source suddenly dries up.
If you have questions about the
solid state lighting and compound semiconductor industries or have news
or views to share, I'm Jo Ann McDonald, Editor of LIGHTimes and CompoundSemi News.
Feel free to contact me directly, anytime. 
My direct tel at the ranch is
+1-325-463-5345
From time to time Jo Ann may comment on companies in which she holds a
modest investment - be sure to read
her disclosure at some point in time... |
