Rolling blackouts in CA leave electronics industry questioning reliability of power supply

San Jose, California–As California heads into its third week of electricity shortages, the bout of rolling blackouts has left many in the electronics industry questioning the reliability of adequate power within the state. Although most are reporting only minor inconveniences such as working under dimmed lights, the Silicon Valley Manufacturing Group (SVMG)–a Santa Clara, CA-based organization that represents 190 high-tech companies–estimates that the blackouts have cost the industry in the “tens of millions,” taking into account employee downtime, lost product and data, and the expense of retooling equipment.

On January 17th, the California Independent System Operator (ISO)–charged with regulating the flow of electricity along the long-distance, high-voltage power lines that make up the bulk of California’s transmission system–began warning that the operating reserves were about to fall below 1.5%, threatening rolling blackouts.

Unlike the transmission difficulties that plague Taiwan’s Hsinchu Science-Based Park, California’s power woes are primarily a result of inadequate power supply. Demand for power has skyrocketed. Growth of web hotels, massive data centers that require the electricity equivalent of 10,000 homes, along with other technology-based businesses such as Internet server centers, are consuming massive amounts of power. But electric companies PG&E and Southern Edison, operating under a rate freeze imposed by the state’s 1996 deregulation law, have been unable to pass huge cost increases on to their 25 million customers and are on the verge of bankruptcy.

Silicon Valley imports 80% of its power, and chipmakers Integrated Device Technology (IDT), LSI Logic, and Linear Technology were among the firms hit by the rolling blackouts on January 17th and 18th.

When IDT received a warning of possible power outages from PG&E on January 17th, there was enough time to bring its 8-in. wafer fab in Salinas to a controlled shutdown without damage. PG&E’s next day warning came too late. All 250 wafers on the line during the outage will be repurposed as test wafers, says IDT. “The manufacturing interruption due to the power outage on January 18th in Salinas was certainly inconvenient, but does not represent any kind of threat to IDT moving forward,” said Dave Cote, an IDT VP.

LSI Logic was hit by the blackouts at its R&D units in Fremont and Milpitas, but says that they had no real impact. “The lights went out at noon and were back on by 1:40 pm. When the lights went out on the 18th there was no warning, but it wasn’t exactly a surprise,” said LSI spokesman Kevin Brett. “We have backup diesel generators and a backup battery, since IT equipment needs power 24-7. We’re also doing everything we can to conserve energy.”

Linear’s two fabs in Milpitas experienced the power outage, but reported no significant damage.

To help resolve California’s power crisis, federal emergency orders were issued on January 23rd to force suppliers to sell electricity and natural gas to the state’s nearly bankrupt utilities until February 7th. The state must now come up with a long-term solution.

By Sally Cole Cederquist, SST Web Editor


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