March 22, 2001 — TAIWAN — Taiwan Semiconductor Manufacturing Corp. is gearing up for another cutback in its capital expenditures, according to published reports.

The Columbian, based in Vancouver, Wash., today reported that TSMC is projecting $2.2 billion in capital spending for 2001. This is the second time TSMC has revised its forecast this year. In February, the semiconductor firm cut its capital budget to $2.7 billion, down from the $3.7 billion it has originally earmarked.

The cuts are largely due to a downturn in the microchip industry.

According to officials, the cuts will not affect plans to expand production of TSMC’s plants which use 12-inch wafers. Those plants generally yield more microchips than the 8-inch wafers.

“The cuts are primarily on the 8-inch side,” Harvey Chang, TSMC’s chief financial officer told Reuters news service.

March 21, 2001 — BEJING — Silicon Storage Technology Inc is set to invest more than $1.6 billion in Shanghai Grace Semiconductor Manufacturing Corp. and also has plans to create a Chinese subsidiary.

According to published reports, the California-based firm will make a “sizable commitment” in GSMC. The exact value of the investment was not available and officials were unavailable for comment.

GSMC, a wafer chip foundry, is expected to produce 50,000 8-inch silicon wafers a month when production begins late in 2002. Construction of the plant, located in Shanghai’s Zhangjiang High-Tech Park began in November.

“GSMC is delighted to have an investor and technology leader like SST in partnership with the development of our fab,” said Winston Wong, chairman and chief executive of GSMC.

Silicon Storage Technology, which is based in Sunnyvale, California, last week also announced plans to create a subsidiary company which will be located in China. The new company will be called SST China and will develop and sell flash memory, ROM/RAM Combo and embedded controller products in the Chinese marketplace. The proposed facility will house design, product and other engineering teams as well as sales, marketing and administrative organizations

March 20, 2001 — DUBLIN, OH — The Electronic Chemicals Division of Ashland Specialty Chemical Company, a division of Ashland Inc., has been awarded QS 9000 certification of its chemical management services (CMS) operations at Motorola’s MOS 11 and MOS 13 semiconductor manufacturing facilities in Austin, Texas.

According to the American Society of Quality, Ashland has become the first company providing CMS to achieve this certification in the United States.

“This accomplishment exemplifies Ashland’s dedication to quality as a service supplier and the strong teamwork and partnership we achieve with our CMS customers,” said Charles W. Cook Jr., vice president and general manager, Ashland’s Electronic Chemicals Division.

Ashland’s ECD Fab Services business has expanded to provide additional complementary services such as equipment parts cleaning and preventive maintenance services.

“Through our MicroClean business, we now offer 24-7 availability to meet the demanding turnaround schedules and up-time requirements of cleanrooms and fabricators, ” said Mike Pregent, business manager of ECD Fab Services. “We offer an environmentally friendly cleaning process that gets down to the sub-micron level for cleaning and servicing a broad range of production tools. This is just one of the steps we are taking to redefine the scope and level of services Ashland makes available to fab customers.”

The Electronic Chemicals Division of Ashland Specialty Chemical Company is a global supplier of ultrapure chemicals, photoresist strippers and on-site chemical management and parts cleaning services to the worldwide microelectronics industry. The division operates ISO 9002-certified production facilities in Pueblo, Colo.; Dallas; Easton, Pa.; Milan, Italy; and Pyongtaek City, Korea; and also participates in a joint venture, Ashland Union Electronic Chemical Corp. (AUECC), serving Taiwan and the region.

March 20, 2001 — ANAHEIM, CA — Lucent Technologies’ new venture, AraLight, Inc., will design and manufacture high-bandwidth, ultra-dense optoelectronic modules for use by manufacturers of Internet infrastructure equipment.

AraLight’s high-capacity, multi-channel devices are designed to solve short-reach interconnect bottlenecks both between, and within, the equipment used for switching and routing Internet traffic AraLight is located in Monroe Township, N.J., with lab space, a cleanroom and light manufacturing capabilities.

AraLight is using Bell Labs technology to create devices that will enable Internet equipment suppliers to build terabit (trillion bits/second) systems with only one-tenth the size and power consumption of present optoelectronic switching systems.

In its labs, AraLight has already demonstrated devices with over 500 gigabits/second (billion bits/second) of data throughput on a single chip module. Created by Lucent’s New Ventures Group, AraLight has received investments totaling $10 million from Signal Lake Ventures, Ridgewood Capital, and Solar Venture Partners.

AraLight’s proprietary technology integrates thousands of photonic components made with gallium arsenide, such as vertical cavity surface-emitting lasers (VCSELs), modulators, and detectors, with silicon integrated circuits containing millions of transistors. The resulting thumbnail-sized optoelectronic module will be able to handle hundreds or thousands of direct optical inputs and outputs required for switching and routing terabit traffic in future communications networks.

The AraLight team collectively has more than 75 patented inventions, developed in Bell Labs, in the areas of optoelectronic integration, optical device design and applications, optical packaging, and high-speed VLSI (very large scale integration) circuit design.

“With more and more wavelengths of light being carried on a single fiber, optical equipment manufacturers need to provide more ports to switch and route optical signals,” said Tom Uhlman, president of Lucent’s New Ventures Group. “AraLight’s advanced high-bandwidth modules will enable manufacturers to build systems that put more devices and ports on circuit boards used in routers, switches and other high bandwidth equipment. We expect that users will see lower costs through smaller space and power requirements.”

ElectroniCast Corp. predicts the market for internal optical interconnect modules will reach $900 million by 2003.

AraLight uses a proprietary, “microbump” flip-chip bonding and substrate removal process developed by Bell Labs to directly attach thousands of lasers and detectors on gallium arsenide chips to the surface of prefabricated silicon chips. Optoelectronic modules and switching chips produced with this technique are smaller and have higher channel counts, lower cost and lower power consumption than devices built with all-electronic or all-optical techniques.

“We expect our higher port densities and smaller form factor will eventually allow us to develop products with aggregate speeds of many terabits per second, all in a single compact package,” said Michael Camp, chief executive officer of AraLight. Camp had previously been CEO of Tech-Sym and CEO of Tangram Systems. Camp had previously also been a vp/general manager at Nortel Networks.

AraLight’s chief technical officer and co-founder, Dr. Ashok Krishnamoorthy, led pioneering research and development in the field of optoelectronic VLSI circuit design for eight years at Bell Labs. He has been granted 20 United States patents in the field, with 15 pending.

“Several other Bell Labs researchers have joined the AraLight team,” said Krishnamoorthy. “In the last decade Bell Labs has invested more than 100 person-years in developing this optoelectronic integration technology. Our technical and management team has the experience to move this technology to market.”

March 20, 2001 — MUNICH, Germany — AIFOtec, an independent supplier of leading edge fiber-optic components, based in Martinsried near Munich, introduced itself and its products at the international Optical Fiber Communication Conference (OFC) in Anaheim, California.

“The hybrid integration of optical components in communication networks is foreseeable, leading to a new generation of highly competitive products,” says Dr. Bernd Hubner, co-founder and head of research and development, Optics with AIFOtec.

As early as the year before the 1999 launch of AIFOtec, a team of experts and scientists was set up to work on fiber grating laser technologies and passive Wavelength-Dense-Multiplexing (WDM) components. Today, the Munich facility has a 500-square-meter clean room space where high-performance components for high-speed fiber-optic networks are developed and manufactured. A range of coaxial and butterfly packaged lasers (Fabry-Perot and DFB types), as well as PIN photodiodes, are also produced at this facility.

The target market for AIFOtec’s product portfolio is the Metropolitan Area Network (MAN), where high product functionality at affordable costs will be key to success. Relatively high levels of manufacturing automation to maintain process repeatability, at high quality, will be a main focus for the company. An example of this will be the use in manufacture of a high precision laser welding technology, utilizing a special process to avoid component post-weld shift, resulting in greater alignment accuracy of key elements during assembly. This automated technique results in enhanced product performance, at higher yields and production efficiency, resulting in reduced per unit cost without any sacrifice in quality.

According to Hubner, AIFOtec’s future lies in developing and producing hybrid elements according to modular principles. In the past, optical components like laser diodes, multiplexers and receivers for high-speed networks were individually mounted and connected.. AIFOtec plans to integrate all of the components onto one single, hybrid, silicon chip. This not only saves space – the solution package will combine all of the necessary functions in a transmitter and a receiver module, at a substantially lower market price. The result: speedy availability of wide bandwidths for all residential users, as well as higher efficiency at a lower unit price. Digital data exchange in high-speed fiber-optic networks will therefore no longer be based on many small components but instead will use a single module.

AIFOtec based in Martinsried near Munich, Germany, was originally established in 1998 and specializes in the development and manufacture of fiber optic components, modules and sub-systems that receive and modify light signals and transmit them across high speed optical networks. Products are primarily targeted at, but no limited to, the Metropolitan Area Network (MAN) market.

March 20, 2001 — LIBERTY CORNER, NJ — Fedders Corporation, a global manufacturer of air treatment products, including air conditioners, air cleaners, dehumidifiers and humidifiers, and thermal technology products is planning a major expansion of activities and an increase in its investments in China.

These include, but are not limited to:

Fedders subsidiary, Envirco Corporation, will establish a 100 percent owned factory to produce filtering systems for cleanrooms used in the production of semi-conductors and hard drives as well as for the biotech, medical and pharmaceutical industries.

“Going forward, the great majority of fabrication facilities for the production of microprocessors will be built in Asia, especially China. This new facility will enable us to be closer to our customers,” said Dr. Daryl Erbs, senior vice president, international.

Melcor Corporation, Fedders’ thermal technology company, will enter a joint venture to increase production of thermoelectric coolers, which precisely control temperature in applications such as fiber optics, microprocessor testing and DNA research.

A research and development facility will be built in China to support all of Fedders’ air treatment and thermal technology products. This will be Fedders’ only R&D center, which supports all of the company’s operating units. The location of the three new facilities has not been finalized.

“In order to support these new activities as well as existing operations, I am pleased to announce the appointment of Michael Shiu as Country Manager for China. Mr. Shiu has also been appointed a corporate officer,” Erbs said. “In addition to his new responsibilities, Mr. Shiu will continue as president, Fedders Xinle Co. Ltd., Fedders Corporation’s air conditioner joint venture in Ningbo, China.”

March 20, 20001 — SALT LAKE CITY — Daw Technologies is moving ahead with plans to form a joint venture company that will focus on integrated cleanroom design, engineering, construction and manufacturing services in China.

The U.S. cleanroom manufacturer has signed a letter of intent along with China-based Eleventh Design & Research Institute, China West Investment, and Sichuan Provincial National Investment Management Corporation. The deal should be finalized in the next few months and officials say they hope to begin generating revenue by the end of the year.

The new company will focus on cleanroom systems and components for the electronics, pharmaceutical and medical device industries. Part of the attraction of establishing the company in China is that country’s recent efforts to establish itself as the Asian center of manufacturing, officials said.

According to industry statistics, China has outspent Malaysia on semiconductor fabs in 1999 and 2000 and is on pace to surpass Singapore in capital spending. China’s capacity for 8-inch wafers is expected to increase by 174,000 units in 2004 and plans to eliminate chip tariffs by 2003.

“The cleanrooms market in China is growing at a different rate than, and is not subject to the industry cycles of, other geographic markets,” said Michael J. Shea, president of Daw technologies. “With the softening of fabrication development in the U.S. semiconductor industry, as well as China’s assured status in the World Trade Organization, this is a great time to look for international manufacturing opportunities.”

Shea said the venture will also serve as a springboard into the rest of Asia.