Firms Toss New Chips Into Game at Gallium Gulch : Problems With Ultrafast Semiconductors Largely Solved, Industry Leaders Contend

Five years ago, electronics industry analysts were cautious in their praise of a new high-speed computer chip that, in car-racing jargon, promised to blow the doors off of the ubiquitous silicon chip.

True, the new electronic component, made from an expensive and finicky compound called gallium arsenide, was fast, experts said. But it was also very expensive, and--like some experimental racing engines--the new chip suffered from a variety of production and reliability problems.

But now, leaders of several eastern Ventura County firms specializing in gallium arsenide chips say most of the engineering and manufacturing problems have been solved. Prices have fallen and manufacturers of commercial and military products have begun ordering them in large quantities.

“Up until a year ago we were losing money at a serious rate,” said Richard Eden, co-founder and senior vice president of Gigabit Logic, a 100-employee firm in Newbury Park that expects to sell about $10 million worth of gallium arsenide components this year. “But last month was the first that we achieved profitability.”

Research Center

Industry experts say eastern Ventura County has emerged as the state’s leader in gallium arsenide research and production and is one of only a few areas in the nation working on the new chips. The region may yet live up to the title “Gallium Gulch,” a name derived from Northern California’s highly successful Silicon Valley.

The gallium arsenide chip is being used in products as diverse as military weapons, radar and satellite systems, compact disc players and long-distance telephone lines, industry representatives said. Gigabit has this year begun producing gallium arsenide components for the Cray Research computer, the Cray-3, considered the world’s most powerful supercomputer.

“We are selling something that goes at least twice as fast and with lower power requirements. It’s like a car getting 100 miles per gallon instead of 20 with increased performance,” said Thomas Dugan, marketing director at the Vitesse Semiconductor Corp., a Camarillo firm with 77 employees.

A third area company working on the ultrafast chips is Microwave Monolithics of Simi Valley.

Avalanche of Orders

This year, the three companies have begun receiving orders numbering in the tens of thousands for the gallium arsenide components they produce, say representatives. In previous years, they say, most orders were for chips used in research and design rather than production.

Although gallium arsenide chip sales this year will account for less than 1% of the more than $26-billion worldwide semiconductor market, some experts are predicting sales as high as $2 billion by 1992, said Doug Andrey, manager of industry statistics for the Semiconductor Industry Assn., a San Jose-based trade group.

A fourth Ventura County firm, Rockwell International’s Microelectronics Research and Development Center, continues to conduct a $24-million government-financed gallium arsenide research and production project at its Newbury Park lab.

Rockwell scientists are credited with much of the early work in the field during the 1970s and early 1980s and have broken some of the last barriers in the new technology, company representatives said.

Local gallium arsenide component producers agree that their product will never replace the silicon chip, the electronic brain of products ranging from hand-held calculators to nuclear weapons guidance systems. “It’s not going to replace the silicon chip in my wristwatch because a watch doesn’t need that kind of speed,” said Michael A. Russell, vice president of finance for Vitesse.

But improved manufacturing techniques have dropped the price of gallium arsenide components, and producers say their share of the integrated circuit market could eventually raise to 10% of the sales now dominated by silicon products.

As little as five years ago, gallium arsenide components cost as much as 100 times more than similar silicon chips. Today, gallium arsenide chips are an average of two to three times as expensive as high-performance silicon integrated circuits. “If you were to compare on a cost per second per function,” Gigabit co-founder Eden said, the prices are roughly equivalent.

The higher cost of gallium arsenide is, in large part, based on the cost of producing the compound from arsenic and the rare element gallium. Silicon, however, is a naturally occurring element found in sand and it is easier to convert for electronics uses.

The Speed Advantage

While silicon is an excellent conductor of electricity, gallium arsenide is five to six times faster. “We want and have an unfair advantage; our electrons move faster,” said Louis R. Tomasetta, president of Vitesse.

Representatives of the three Ventura County firms say they do not fear the local competition. “We are all competing with high-performance silicon parts,” Tomasetta said.

But both Gigabit and Vitesse each claim to have been the first firm to mass-produce the largest and fastest of the gallium arsenide chips. “I would say that there is a lot of salesmanship going on,” Eden said of the rivalry.

Separate investors in each of those two firms, which are less than five years old, have contributed more than $60 million in the belief that gallium arsenide components will gain a substantial foothold in the electronics marketplace, company representatives said.

That private investment money is in addition to the more than $100 million that the federal government has invested in gallium arsenide research, the bulk of which was done at Rockwell’s Science Center in Thousand Oaks.

“Beginning in 1973, I put together a team of researchers at the Science Center whose goal was to solve the problems associated with making integrated circuits out of gallium arsenide,” said Alfred S. Joseph, a former Rockwell executive who left in 1980 and was co-founder of Vitesse a year later.

With government funding coming in at a rate of $10 million to $15 million a year, Joseph built a research staff of more than 100 scientists at the Science Center. By 1979, when the center produced the world’s first gallium arsenide integrated circuit chip, it was recognized as the leading gallium arsenide research facility in the world, he said.

Joseph left Rockwell because “I proved that Rockwell could get started in an unexplored area that could make them money . . . and I wanted to make some of that money for me.” Others leaving Rockwell to go into private business included Tomasetta, Eden and Daniel Ch’en, president of Microwave Monolithics.

All of those scientists say the government-funded work done at Rockwell laid the foundation for the burgeoning commercial applications of gallium arsenide.

“The Rockwell team became the foremost in the world because we were gutsy enough to go and ask the question of whether we could make an integrated circuit chip out of gallium arsenide,” Joseph said. “Sometimes I wonder if we could have planned all of it, or whether we just fell onto a good idea. . . . I’d like to say that we were aware of all the good things that were going to happen, but we weren’t; we just knew the potential.”