OSHA cites American Xtal

Cal/OSHA charges 42 violations of labor, environmental and safety rules

Hank Hogan

FREMONT, CA—American Xtal Inc. (AXT) is making news that may impact contamination control throughout the semiconductor industry. It's just not the kind of press that any company wants.

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At a time when the semiconductor industry is under increased scrutiny for health and safety issues, AXT was cited in mid-May by the state of California Department of Industrial Relations' Division of Occupational Safety and Health (Cal/OSHA) for 42 violations of labor, environmental and safety rules. Thanks to a new law, the total fine was over $300,000.

AXT has appealed the citations, and the case is now working its way through the legal process. Resolution may take six months or more.

Cal/OSHA did shut down the company's production of gallium arsenide substrates for several days in February. Manufacturing started up again only when certain serious violations involving employee exposure to arsenic were corrected.

“Arsenic is a known carcinogen,” says Victoria Heza, acting deputy chief of enforcement for Cal/OSHA. “The important thing is if the employer is following all the regs that apply, exposure to any of these hazardous chemicals should be reduced or eliminated.”

In a statement issued in June, AXT disputed the violations, citing both factual and legal errors. American Xtal also announced it had retained Jeff Tanenbaum, an attorney with Littler Mendelson P.C., to represent the company in its appeal. During the appeals process, the company does not have to abate the violations. Final resolution of the case will involve either a dropping of charges or a workplace cleanup.

A look behind the fines shows a new law at work in California, AB1127. In effect since January 1, 2000, AB1127 allows Cal/OSHA to assess much higher civil and criminal penalties. The result is that Cal/OSHA's enforcement efforts are now much more effective.

The new law only increases the penalties. It does not create new categories of violations, nor does it change what is and what is not defined as a violation. According to Cal/OSHA spokesman Dean Fryer, the citations issued were not the result of AB1127. Instead, company violations were the cause.

However, the new law may have one unintended effect.

“Because of the greatly increased penalties, Cal/OSHA cases are litigated much more seriously now than they were in the past,” comments Tanenbaum of Littler Mendelson.

AXT has also announced plans to expand both in the United States and in China. The expansion was revealed before the violations were made public but after the February inspection that shut the company down. Citing a growing demand for GaAs substrates in wireless products, AXT plans to triple production of its main product line, 50-mm to 150-mm GaAs substrates, by Q3 2001. Most of the expansion will take place at AXT's Beijing facility.

These substrates are made using AXT's vertical gradient freeze crystal growth technology, which produces low defect products. According to Cal/OSHA, the process as practiced by AXT also exposes workers to a high level of arsenic contamination.

When the citations were made public, there was discussion about possible criminal charges. A check with the Alameda County District Attorney's office revealed no charges have been filed, nor is an investigation underway.

As the semiconductor industry comes under closer examination for health and safety issues it could be that the American Xtal incident will add to the industry's burden, particularly because Cal/OSHA is apparently becoming interested in GaAs processing itself.


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