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Trade Group Calls for More Nano

Despite the best efforts of the Bush administration, the U.S. semiconductor industry will still need a $1.5 billion shot in the arm to succeed in nanotechnology .

The Semiconductor Industry Association (SIA) today called for the creation of a Nanoelectronics Research Institute (NRI) to direct and coordinate a massive research effort and assure continued U.S. leadership.

"The price for not starting now on a massive, coordinated research and development effort in nanoelectronics could be nothing less than a loss in just two decades of U.S. economic and defense leadership," said John E. Kelly, III, senior vice president and group executive of the IBM Technology Group, in a statement. Kelly spoke at an SIA event in Silicon Valley earlier today.

The sub-micron space has been a hotbed of activity in the semiconductor sector in manufacturing and research and development. In the last few years, IT giants like IBM, Intel, Texas Instruments and Fujitsu have all staked their claim on the development of 90-nanometer process products and smaller. But most researchers believe that complementary metal oxide semiconductor (CMOS) technology will reach its limit in 15 years. After that, computer processors and their related transistors will need new materials and devices.

The government has been proactive. In December, President Bush signed the 21st Century Nanotechnology Research and Development Act, authorizing $3.7 billion over the next four years for the emerging science. The legislation puts into law programs and activities already supported by the National Nanotechnology Initiative (NNI), one of the White House's highest multi-agency R&D priorities.

But Kelly said that U.S. research and development efforts in semiconductor technology currently face an annual shortfall of approximately $1.5 billion compared to the investment necessary just to stay current with the CMOS technology roadmap outlined in the International Technology Roadmap for Semiconductors (ITRS). The ITRS is a plan that identifies technical obstacles (known in the industry as "red brick walls") that must be overcome in order to continue Moore's Law of speeding up processors.

The Research Institute proposed by the SIA would be a joint effort of the semiconductor industry, academia and government. Researchers from university faculties, students and assignees from industry would be charged with generating new ideas and discoveries and demonstrating the feasibility of creating a new switch with associated interconnects and memory using novel materials and manufacturing techniques by the year 2020.

The SIA plan in establishing a larger U.S. participation in nanotechnology has a hint of political overtones. Kelly noted that other regions of the world are accelerating their research efforts and taking jobs away from American engineers.

"As we speak, state-of-the-art, 300-millimeter fabs with 90-nanometer process technology are coming on line in other parts of the world," said Kelly. "No one doubts that the links between R&D and manufacturing are becoming more important -- that these links are dynamic, and that proximity between labs and fabs is also an issue. Public policy must not only encourage R&D activities in the United States, but also provide an attractive climate for investing in production capacity in the U.S."

While Kelly's criticism may not put IBM in a bind, the two largest chipmakers have extensive fabrication facilities overseas, including Intel's plans for a new 300 mm wafer facility in Ireland and AMD's plant in Dresden, Germany. SIA member companies have approximately 70 fabrication facilities in the United States and 68 in foreign countries, five of which are located in China with more on the way.

The SIA estimates that the U.S. semiconductor industry has approximately 163,000 employees in the United States with an average annual total compensation of $97,000. If research investment is insufficient to support further technological advances in accordance with Moore's Law, Kelly claims the semiconductor engine driving productivity gains will slow down, or perhaps even stall, with adverse consequences for job creation, economic prosperity and national defense.

"Economic prosperity and high-value jobs have come from decades of leading revolutions in mainframe computing, personal computing, wireless connectivity and Internet technologies," Kelly said. "All of this and the resulting increases in productivity have been driven by the relentless engine of making semiconductors smaller, more powerful and less expensive."