January 19, 2006 – In a move to reduce expenses and tighten focus on its technical programs, Sematech is restructuring various support and administrative functions, eliminating about 15% of its cost structure. The move will streamline backend functions including finance, contracts, and communications operations. Sematech spokesperson Dan McGowan indicated there would be some changes at Sematech’s Advanced Technology Development Facility (ATDF) — mainly a reorganization in interconnect activities, to transition away from spin-on low-k and focus more on 3D and CVD low-k — but beyond that core research activities will be only marginally affected.

“The costs of R&D have been rising pretty much exponentially. Companies in the industry are having trouble keeping pace with that, and we’re caught in the same situation,” McGowan explained. “To take this on in the long term, we need to fix our cost structure.” He wouldn’t translate the 15% cutbacks into a dollar figure, but indicated it’s roughly equal to the reduction in Sematech’s ~500-employee workforce.

Initial media reports suggested part of the financial pinch was due to a delay in expected funding from the state of Texas, which last year had promised to identify sources of funding for the next five years, equaling about $40 million/year. Sematech is hoping to receive an additional $40 million “in the May-June timeframe,” according to McGowan.

McGowan said the realignment will not affect the International Sematech Manufacturing Initiative (ISMI) programs, or Sematech North in Albany, NY, which is supported by $32 million/year in state funding. The Albany program, oriented around development of extreme-ultraviolet (EUV) lithography technology, is slated to continue through 2007, with an option to extend that if both the state and Sematech agree, McGowan noted. — J.M.