Growing from Kilby's invention to today: Texas is 2nd in chipmaking*
10/01/2001
 The Alamo (Jack Lewis) |
It is not surprising that the famous Texas braggadocio carries over into the semiconductor manufacturing industry. After all, it was in Texas on May 10, 1954, that Texas Instruments (TI) announced the commercial availability of grown-junction silicon transistors, at the time a less expensive and higher-operating-temperature alternative to germanium transistors [2]. Today, if you work in one of the state's modern wafer fabs (see Table 1 on p. S12), it's hard to imagine that these first silicon transistors were constructed by cutting a rectangular bar from a silicon crystal grown from a melt containing impurities. In Texas, the industry certainly had an "industrial" beginning.
Just more than four years later, Jack Kilby invented the IC (Fig. 1). As the now legendary tale goes, Kilby was a recent hire. Not having accrued enough vacation time, he worked at TI in Dallas during summer when almost everyone else was off. On July 24, 1958, in the quiet of the miniaturization lab, Kilby wrote in his lab notebook that circuit elements such as resistors, capacitors, and transistors, if all made of the same material, could be included in a single chip. By September 12, 1958, Kilby had built a simple oscillator IC with five integrated components — one transistor, three resistors, and one capacitor (Fig. 2). In 1959, he applied for a patent, subsequently issued to TI as US Patent No. 3,138,743, "Miniaturized electronic circuits."
 Figure 2. Comprised of only a transistor, three resistors, and a capacitor on a slice of germanium, Jack Kilby's 7/16x1/16-in. IC revolutionized electronics. |
In 2000, the importance of the IC was recognized when Kilby shared the Nobel prize in physics with two others. (Kilby received half of the prize, while Zhores Alferov and Herbert Kroemer received the other half for their work in developing semiconductor heterostructures used for high-speed devices and optoelectronics.) Kilby was cited by the Nobel committee "for his part in the invention of the integrated circuit." Imagine your business card reading, "Jack St. Clair Kilby, inventor of the IC, retired Texas Instruments engineer." Kind of describes sainthood for the rest of us.
ICs Big in Texas
Today, any Texan involved in semiconductor manufacturing might note that "Texas" is the only state name (some might argue "republic") appearing in the top 10 list of semiconductor manufacturers, where TI's latest worldwide position is fifth (see table on p. S7). TI has eight wafer fabs at three different campuses in the state. The latest is a new advanced fab that will be, arguably, the first 300mm production facility completed in the US.
 Figure 3. Leading high-tech industry segments in Texas, measured by employment. (Source:Cyberstates 2001) |
Along with TI, three other semiconductor manufacturers in the current list of the top 10 have wafer fabs in Texas: number four, STMicroelectronics, in Carrollton, number six, Samsung, in Austin, and number eight, Motorola, in Austin. While ST and Samsung each have just one fab in Texas, Motorola has three and is second in the state to TI.
According to Solid State Technology's most recent tabulation of Texas wafer fabs (see Table 1 on p. S12), 18 semiconductor manufacturers have 35 wafer fabs in Texas (one is being phased out, another ramping up). These range from relatively small bipolar discrete device facilities still running 75mm and 100mm silicon wafers to the most advanced 200mm facilities (see "AMD, the global climate, and Austin TX" on p. 000 and "Fabs are good neighbors, too" on p. 000) and even emerging 300mm silicon and gallium arsenide wafers to 1mm silicon spheres. Our estimate shows that if all of Texas' wafer fabs ramp up to full capacity, their combined production would be the equivalent of 366,300 200mm wafers/month or 4.4 million/year. This is approximately 4.4% of the Semico Research (Scottsdale, AZ) forecast of the 101 million 200mm equivalent wafers that may be needed in 2002.
High tech Big, too
Employment statistics from Cyberstates 2001 show that Texas has the second largest high-tech industry in the US with 440,700 high-tech-related jobs. (California is first with 973,600.) Approximately 45,800 of these jobs are specifically in semiconductor manufacturing (Fig. 3). The high-tech industry in Texas grew by nearly 17,000 jobs in 2000 alone. The Texas total is well ahead of New York (ranked third with 339,100 high-tech jobs), Massachusetts (ranked fourth with 233,800) and Florida (ranked fifth with 231,400).
 Figure 1. Jack Kilby in 1958, the year he invented the world's first IC at Texas Instruments. |
Among other statistics outlined in Cyberstates 2001 (see Table 2), Texas has added 151,500 jobs to its high-tech work force from 1994 to 2000 (a 52% increase), with the growth trend continuing through the end of 2000. Nationally, high-tech industry employment totaled 5.3 million in 2000, compared to 5.1 million in 1999. However, this 4.6% increase was the slowest since 1994.
While more periodic analyses exhibit concern and change (see "Recent Texas economic outlook"), looking at data through 2000, Melissa Hendrick, AeA Texas council executive director, says, "The tech industry is alive and well in Texas and nationwide. Although company layoffs have dominated the headlines, most of those workers were quickly rehired by smaller companies that were challenged to attract qualified workers. Natural attrition, early retirement, and dispersing layoffs across international operations have also helped to minimize the impact."
Perhaps reflecting the Southwest's less burdensome cost of living and life-style, Texas ranks 10th in high-tech average wages with $64,136 in 1999, 91% more than the average private sector wage of $33,550 in the state. The average wage for high-tech workers increased 29% or $14,300 between 1994 and 1999 (adjusted for inflation). In addition, Texas' high-tech payroll ranks 2nd nationwide at $27.2 billion.
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Emerging changes in high tech
Despite their range, the statistics in Cyberstates 2001 do not reflect the industrial and economic changes of late 2000 and 2001 to date. Analysts Fiona Sigalla and Mine K. Yücel find that "the mighty Texas economy is starting to take a breather after a decade of extraordinary growth." Rapid development of high-technology industries, such as computers, semiconductors, and telecommunications, as well as equipment and service suppliers of the high-tech industry, contributed directly and helped stimulate a construction boom and expansion of the region's distribution network. "By some measures, the economic growth of the 1990s came close to matching that of the [Texas] oil boom in the early 1980s. But Texas employment is likely to expand at a more moderate pace in 2001," Sigalla reports [3].
Sigalla cites past details. Between 1990 and 1999, the total Texas output increased 41%, high-tech output in Texas grew 281%, telecommunications output rose 68%, the semiconductor industry output increased 180% percent, and the computer industry output jumped a whopping 1526%. "High-tech industries now make up roughly one-eighth of Texas manufacturing employment. Investment in high-tech equipment by all types of Texas firms has brought considerable productivity increases," she says.
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However, the change for the future is already noted in Sigalla's numbers. "By midsummer of 2000, the Texas economy, which had been rebounding from low oil prices, ran into headwinds. Rising interest rates and slowing US and global economies began restraining Texas economic growth. The high-tech boom began to wind down. Many analysts think that there may have been overinvestment in the [high-tech] industry. Weakening sales for computers, semiconductors, and telecommunications equipment caused many high-technology companies [in Texas] to lower earnings projections. Cyclical forces such as swings in semiconductor or computer prices will also affect these industries, bringing fluctuations around a higher trend rate of growth."
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According to Sigalla and Yücel, when 2000 is finally tabulated, Texas job growth should be about 3%. The numbers for 2001 are expected to be even more moderate, reflecting the slowdown in US economic growth. If world economies also slow and demand tapers off, oil prices may drift down. Employment growth will likely slip to 1.5-2%, but Texas' growth should remain stronger than the nation's. — P.B.
Acknowledgments
Texas photos courtesy of the Texas Department of Transportation. AMD Fab 25 photo courtesy of AMD, Austin, TX.
References
- Cyberstates 2001 is part of AeA's cyber report series that includes Cybernation 2.0, CyberEducation, and Cybercities. AeA members may purchase the Cyberstates 2001 report for $95, nonmembers for $190. Contact AeA at ph 800/284-4232.
- www.icknowledge.com/History/history.htm.
- Southwest Economy, #1, January/February 2001, Federal Reserve Bank of Dallas, (www.dallasfed.org/htm/pubs/swe/1_2_01.html).
*Ranking in US based on 1999 employment [1].
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AMD, the global climate, and Austin, TX
Advanced Micro Devices' (AMD) corporate-wide "Global Climate Protection Plan 2001" is not without a direct impact on Austin, TX. This plan outlines AMD's strategy to address global warming and reports the corporation's progress toward meeting these goals. The plan is reviewed and revised annually to keep pace with the rapidly evolving technology of semiconductor manufacturing and new opportunities for global climate protection.
 AMD's Fab 25 in Austin, TX (Barton Wilder) |
At AMD's fabs in Austin, the plan educates employees on actions they can take to mitigate adverse impact on the global climate. Using public transportation, carpooling, insulating homes, and turning off lights and computer monitors when they are not in use reduces energy use and resulting emissions of carbon dioxide. For example, in 2001, AMD Austin started the Commute Solutions Program, a family of options that helps to reduce the number of car trips each day and providing convenient and environmentally beneficial ways to get to work. Options include carpooling, vanpooling, public transit, clean air strategies, and alternative work arrangements. By providing benefits to participating employees, AMD Austin is encouraging them to take advantage of Commute Solutions with the goal of reducing ~7300kg of nitrogen oxide emissions by the year 2004.
 Big Bend National Park (Bill Reaves) |
AMD was also one of the first companies to purchase renewable energy offered through Austin Energy's Green Choice Program, in which AMD's Austin fab site pays a premium to purchase one million KWH of electricity monthly from renewable sources. The energy is generated by a combination of landfill methane combustion, wind power, and solar power. This is enough energy to power 1000 homes, and constitutes 15% of the total amount of green power flowing into Austin. Premium payments fund expansions of Austin Energy's solar fields, wind turbine plants, and landfill methane recovery operations.
Globally, AMD is taking action to reduce greenhouse gas emissions in all areas relevant to its operations and products. In addition to reducing carbon dioxide emission, AMD is focusing on the reduction of PFC emissions from manufacturing activities. The company has set a goal for a 50% absolute reduction in PFC emissions by 2010 relative to a 1995 baseline, and a goal of 15% reduction in energy consumption by 2005 for its wafer fabrication sites normalized to wafer production using 2000 as a baseline.
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Fabs are good neighbors, too
In 2001, Advanced Micro Devices (AMD) pumped $470,000 in grants to Austin-area nonprofit organizations, focusing on youth education and enhancing the quality of life in the community. Hector Ruiz, president and COO at AMD, said, "A well-educated population is any community's greatest asset."
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Examples of programs receiving support from AMD during the first half of 2001, include, among others:
- $100,000 to Travis High School Education Foundation to enhance AMD technology labs at the school, equipment for the science department, and faculty development.
- $40,000 to Junior Achievement for curriculum at three schools and career development and awareness for seventh graders.
- $35,975 to Smith Elementary School for a gifted and talented program, math and science summer academies, student and teacher recognition, and professional development.
- $32,550 to Girlstart for in-school science programs and a summer camp on Web design and development.
- $23,500 to St. Edward's University for scholarships to students participating in the Community Mentor Program, and stipends for mentors and tutors for at-risk elementary-age students.
- $20,588 to Austin Community College Foundation for the Summer Youth Academy benefiting 40 middle school students.
Austin's John Blazier, president of the Travis High School Education Foundation, said, "As a result of AMD's donations, thousands of our students will be taught computer skills that will better their lives forever. AMD's generous support of our technology, science, and math departments, as well as teacher development is making a difference in students' lives and futures."
During fiscal year 2000, AMD provided more than $3.2 million in grants, gifts, and in-kind contributions to various nonprofit education, civic, and health and welfare organizations through AMD's worldwide sites in the US, Europe, and Asia. AMD's community investment in Central Texas in 2000 totaled nearly $1.3 million.
In addition, Austin area AMD employees volunteered 3235 recorded hours of work for various charitable organizations. AMD recognizes that volunteer activities strengthen community ties and add value to employees' lives. AMD encourages and supports volunteerism in a variety of ways. One program, the AMD Grant Incentives for Volunteer Efforts (GIVE), provides grants to those agencies where employees regularly volunteer. Around the world, AMD employees volunteer as tutors and mentors at area schools, judge science fairs, serve meals at neighborhood centers, assist at food banks, and provide support to numerous other community activities.
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 Texas longhorn (Jack Lewis) |
Recent Texas economic outlook
According to analyst Pia Orrenius [1], slowing of the Federal Reserve Bank's eleventh district economy intensified through April and May of 2001, with job growth falling below 1% and unemployment rising to 4.5%. The sharp downturn in job growth results from the spread of troubles in manufacturing and high-tech areas to the larger trade and services sectors, developments consistent with the national economy.
Hardest hit are high-tech and manufacturing centers, including Austin, Dallas, El Paso, and Fort Worth. Because the slowdown is no longer limited to just high-tech and manufacturing firms, however, most major Texas metro areas are also feeling the pain, including Houston, San Antonio, and the border cities of Brownsville, McAllen, and Laredo.
The flagging economy abroad is also affecting the district. Exports have declined for two consecutive quarters. With housing demand softening and mortgage rates stalled, construction and real estate markets have slackened. Since March, only the energy sector has seen accelerating activity. The district's slower growth should continue into the third quarter. Labor market uncertainty may be undermining consumer confidence, without which recovery is unlikely. Orrenius says, "We expect 2001 job growth to fall below 2%, the lowest in nine years."
Reference
- Southwest Economy, Issue 4, July/August 2001, Federal Reserve Bank of Dallas, (www.dallasfed.org/htm/pubs/swe/7_8_01.html).