IBM's bigness pays in costly world of chips

Even giant corporations occasionally want to hear they are doing a good job. If the praise is not forthcoming, sometimes they ask for it.

That is what International Business Machines (IBM) did last week. Executives at the giant computermaker were sulking because they think Japan gets more praise for its semiconductor technology than IBM does. Semiconductors are small electronic ''chips'' made of silicon which allow computers to reason and remember.

''I am annoyed about the Japanese image,'' admits IBM vice-president Edward Davis. He runs IBM's General Technology Division, which makes semiconductors for the giant company. As an example of IBM's prowess, Dr. Davis says that IBM has ''shipped more (of the latest generation of memory chips) than the rest of the world industry combined.''

''The threat from Japan is real, but they are not nine feet tall,'' adds Dr. Paul Low, who oversees IBM's manufacturing plant near Poughkeepsie on the Hudson River.

To make its point, IBM took the rare step of letting reporters behind the well-guarded doors of its sprawling computer parts manufacturing complex.

The visitors obviously did not see all of the chip factory, which is housed in more than a dozen buildings and covers 3.2 million square feet of floor space. But the carefully selected sections opened to the press illustrate what US industry can accomplish with aggressive capital investment.

Among the advanced techniques IBM displayed were:

* Automated design equipment. Circuit designers work sitting behind a television-like screen linked to a computer. By placing a special ''pen'' on the screen, a designer can ''pull'' parts of a circuit around the screen to see where they will fit best. Or the computer can be asked to place the parts.

The system, which IBM claims is more comprehensive than others in the industry, offers a major advantage in speed, since each chip -- or the fingernail-size piece of silicon -- may have thousands of individuals circuits packed on it. For example, a designer can place 700 parts on a chip and install 2,000 interconnections in less than an hour. ''Fast turnaround time is critical and you have to be right the first time,'' Dr Low says.

Once an engineer has designed a component, the automated system will test the design and send specifications on to computer-controlled production machinery elsewhere in the plant.

* Computer-controlled manufacturing. By placing production equipment under computer control, IBM has slashed the time it takes to move a chip from design to production. ''When the chips are down, we have done it in a weekend,'' Dr. Low punningly boasts.

Perhaps the most advanced production line is IBM's Quick Turn Around Time (QTAT) facility. Here chips travel to 100 computer-controlled machines while riding along jets of air. The few human beings who are present monitor the production process by watching flashing status lights or reading computer printouts.

Individual circuit designs are shot onto the silicon wafers using a narrow beam of electrons. With this sophisticated equipment, IBM can produce individual circuit parts as narrow as one micron, or one-fortieth the width of a human hair. Most chipmakers are using E-beam only experimentally, if at all.

* Chip packaging. Computermakers try to pack more and more circuits onto each small piece of silicon in a bid to lower costs and boost the speed at which the devices work.

IBM's latest design effort is a fist-size product that holds vast amounts of computer memory and logic capability. The device, called a thermal conduction module, is built around a 3.5-inch-square ceramic sheet onto which IBM crams up to 133 separate silicon chips. These chips contain as many as 10,000 logic circuits and 300,000 bits of memory. The chips are interconnected through 300, 000 precision-punched holes drilled through 28 layers of the thin ceramic material.

While most of the production process here is highly automated, IBM has not succeeded in entirely eliminating human drudgery. For example, one worker sits at the end of an automatic inspection machine, sorting thin sheets according to signals from a computer.

The investment needed to produce chips in such an automated environmment is rising rapidly. A chip production line cost $2 million or $3 million in the 1960 s, rose to $3 million to $30 million in the 1970s, and now costs from $50 million to $350 million. ''By the second half of the decade, the entry price will be close to $1 billion,'' vice-president Davis says.

The increasing level of investment will make it tougher for small US semiconductor makers to compete with well-heeled Japanese companies, Dr. Davis argues. ''There is no (independent) semiconductor industry in Japan. They are all like IBM, part of a larger corporation,'' he says.

''The current pace of technology development is like a treadmill. You can't stop and rest, and make high profits on past investments,'' Dr. Davis says. For that reason he predicts that ''you will be seeing acquisitions (of chipmakers by larger firms). It may be the only way the . . . industry can get capital.''

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