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U.K., France's path in electronics arena

Posted: 07 Sep 2011 ?? ?Print Version ?Bookmark and Share

Keywords:electronics arena? IC industry? U.K. fabs?

This article is a response to questions in a forum on "Why the British had to get out of fabs and end up with just design/IP a la ARM?" and "Why fabs still survive (if not exactly thrive) in the U.K.'s traditional rival France?"

According to EE Time's Peter Clarke, the primary reason that fabs failed to thrive in the U.K. is that while the Second World War helped create the U.S. as a global economic superpower it more or less bankrupted the first with implications that were heavy in the 1950s and early 1960s and that still continues to this day.

A second reason is a long-established arts and humanities versus science division in U.K. society such that science and technology are not sufficiently well represented among the political and wealthy establishment in the country. In the past, the owners and managers of U.K. establishments usually had a non-scientific background. ARM, Wolfson, CSR, Vodafone and several others are now glorious, but relatively recent exceptions.

Clarke explained that back in 1960s, U.K. technology-based company management treated engineers as willing serfs who did not need and should not be given too much money. It was a "make do and mend" mentality left over from the Second World War, and many electronics companies continued to be closely aligned to military interests. Defense was the early application for electronics. These establishments often could not comprehend or cope with international competition, and the continuous exponential increase in the cost of participation in electronics.

Parsimonious and parochial
When faced in the 1960s and 1970s with the choice between spending millions of pounds to compete in thin-film monolithic integrated circuits and thousands of pounds to make thick-film hybrids and PCBs, managements in the U.K. chose to do the latter not perceiving any difference but cost. Clarke mentioned visiting a wafer fab in the U.K. in 1984 that had been housed in a building that was decades old, had broken windows and drums of chemicals out the back stored on a concrete standing. It looked like and was as grubby as an automobile bodyshop.

U.K. companies were often on space-constrained Victorian sites and few had any appetite for a manufacturing process that required its own building and equipment that cost hundreds of thousands of pounds. Most of the wafer fabs that were built in U.K. were done so by inward investors sometimes seeking to gain a European location as a hedge against the possibility of an emerging "Fortress Europe."

When faced in the 1980s and 1990s with choice between spending millions of dollars to design ASICs or almost no non-recurring expense (NRE) to program FPGAs U.K. companies often chose to design using FPGAs. In 1990 when creating a processor company, the option was taken to do it on almost no money, albeit backed by Apple, VLSI Technology, Acorn and a Japanese investment bank. This approach necessitated the creation of the intellectual property business model that has been pursued eversince by ARM.

One moved to the right, one didn't
The move to the right in the U.K. under Margaret Thatcher's tenure as prime minister from 1979 to 1990 swept away the idea of subsidies for companies such as GEC, Plessey, Ferranti and Marconi. Although GEC-Plessey Semiconductors Ltd. became a de facto national champion chip company the concept was clearly out of fashion in post-Thatcher UK.

Meanwhile, Pasquale Pistorio believed in the power of semiconductors to create wealth, and worked inside a U.S. pioneer of the semiconductor industry, Motorola. The governments of France and Italy, that were left-of-center, believed in state intervention and supported European champions such as Philips, Siemens and STMicroelectronics.

According to Clarke, globalization does appear to be driving the U.S. down the same paths already taken by the U.K. He added that although venture capital is turning away from semiconductors for information technology, it is focusing on other things such as semiconductors for power generation, and energy-efficiency and sustainability.

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