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Integrated within an electronics business
INTERVIEW
ohn Vaughan holds a privileged position in the IIl-Vs industry. He is Manager of M/ACorn's Advanced Semiconductor Division Materials Group, which is part of an electronics company. This vertical integration confers a strength which has made M/A-Corn one of the leading suppliers in the USA. M/A-Corn is based in Lowell, Massachusetts, USA, specializing in microwave circuits and devices. John spared some time during a busy time at the 1990 GaAs IC Symposium Exhibition to tell us how he feels about the supplier-user relationship, big ingots, IC-grade wafers and the MIMIC Program.
J
Integrated within an Electronics Business John Vaughan of M/A-Corn at the GaAs IC Symposium
IIl-Vs: There now seems to be a barrier to entry in the marketplace. IV: Once the foundry's gotten used to your kind of wafer they tend not to want to change. A few years ago everyone tried everyone's wafers. Now that's an expensive thing to do so they stick with certain vendors. We treat each of our customers as a key account and since there are relatively few of them this is how they should be treated.
IV: M/A-Corn has a tradition of supplying at all levels from materials up to sub-systems and at m a n y points in that chain. M/ACorn does supply to competitors, it's an issue that's so much part of our C o m p a n y culture and so natural, we d o n ' t think it's a problem and neither, I think, do our customers. I d o n ' t think that a n y o n e has been uncomfortable with the fact that M/ACom also makes lCs. III-Vs: In some respects M/ACorn is unique atnong Western substrate suppliers. In fact you might say it ha~s more o f a likeness to a lapanese substrate company than with a Western one. Most Western substmte suppliers are part o f a materials corporation rather than an electronics one.
III-Vs: M/A-Com is a veteran in the GaAs materials business but one with a narrow fi)cus in that it specializes in semi-insulating GaAs. IV: True, we d o n ' t have a broad III-Vs materials approach. We d o n ' t even make c o n d u c t i n g GaAs, we just make IC-grade GaAs, m a t c h i n g a narrow market focus with a narrow product focus. What's happened over the last few years is that wafer users and suppliers have become much closer. They get used to one type of material and want to keep on processing that material.
totners are competitors at the IC level.
III-Vs: Will substrate qualification change due to improvements in material? IV: Only if there are quite radical changes, but we're not anticipating any. Excepting improvements in uniformity, reproducibility and so on, of course. I think that's essential for both the user and the supplier. That way we each understand what the other wants so we can provide exactly what kind of material they want to use. III-Vs: You understand that more than others given that you "re vertically integrated. IV: M/A-Corn considers itself to be a co-producer of 1Cs. This confers two
Page 3 4 , V o l ~ e
advantages, one being in an IC facility which means that all the services we use are "IC grade". The other is we make ICs ourselves so if I might lack understanding about a customer's problems, I can talk to someone in M/A-Com and have them explain what people are trying to tell me! So there is an advantage being in an integrated facility. I ronically, t h o u g h we are a microwave c o m p a n y , most of our wafers go into the digital sector but there's e n o u g h c o m m o n ality in processing to make our facility very useful. III-Vs: One might sug,wst that there is a conflict o f loyalties here, maybe some o f ,~l/A-Com'~ substrate cus-
4 • Number t ° Februa~ 1~1
JV: The question is do you consider materials to be at the high end of a chemical or a mining business or do you consider it to be, I hesitate to say, at the "low end" of an electronics business? I think the right answer for GaAs is that it's part of the electronics business, rather than part of the mining business. It may be helpful to think sometimes of GaAs wafers as being a service rather than as a product. W h e n you think of it as a service it naturally gets into the overall electronics business. Conversely, people have often t h o u g h t that GaAs substrates are a good entry into the electronics business. What has h a p p e n e d on a n u m b e r of occasions in the industry is that, because the GaAs materials marketplace is quite small, the usual valueadded argument we used at m a n a g e m e n t school for why we should have this inaterials business on top
ohn Vaughan holds a privileged position in the IIl-Vs industry. He is Manager of M/ACorn's Advanced Semiconductor Division Materials Group, which is part of an electronics company. This vertical integration confers a strength which has made M/A-Corn one of the leading suppliers in the USA. M/A-Corn is based in Lowell, Massachusetts, USA, specializing in microwave circuits and devices. John spared some time during a busy time at the 1990 GaAs IC Symposium Exhibition to tell us how he feels about the supplier-user relationship, big ingots, IC-grade wafers and the MIMIC Program.
J
Integrated within an Electronics Business John Vaughan of M/A-Corn at the GaAs IC Symposium
IIl-Vs: There now seems to be a barrier to entry in the marketplace. IV: Once the foundry's gotten used to your kind of wafer they tend not to want to change. A few years ago everyone tried everyone's wafers. Now that's an expensive thing to do so they stick with certain vendors. We treat each of our customers as a key account and since there are relatively few of them this is how they should be treated.
IV: M/A-Corn has a tradition of supplying at all levels from materials up to sub-systems and at m a n y points in that chain. M/ACorn does supply to competitors, it's an issue that's so much part of our C o m p a n y culture and so natural, we d o n ' t think it's a problem and neither, I think, do our customers. I d o n ' t think that a n y o n e has been uncomfortable with the fact that M/ACom also makes lCs. III-Vs: In some respects M/ACorn is unique atnong Western substrate suppliers. In fact you might say it ha~s more o f a likeness to a lapanese substrate company than with a Western one. Most Western substmte suppliers are part o f a materials corporation rather than an electronics one.
III-Vs: M/A-Com is a veteran in the GaAs materials business but one with a narrow fi)cus in that it specializes in semi-insulating GaAs. IV: True, we d o n ' t have a broad III-Vs materials approach. We d o n ' t even make c o n d u c t i n g GaAs, we just make IC-grade GaAs, m a t c h i n g a narrow market focus with a narrow product focus. What's happened over the last few years is that wafer users and suppliers have become much closer. They get used to one type of material and want to keep on processing that material.
totners are competitors at the IC level.
III-Vs: Will substrate qualification change due to improvements in material? IV: Only if there are quite radical changes, but we're not anticipating any. Excepting improvements in uniformity, reproducibility and so on, of course. I think that's essential for both the user and the supplier. That way we each understand what the other wants so we can provide exactly what kind of material they want to use. III-Vs: You understand that more than others given that you "re vertically integrated. IV: M/A-Corn considers itself to be a co-producer of 1Cs. This confers two
Page 3 4 , V o l ~ e
advantages, one being in an IC facility which means that all the services we use are "IC grade". The other is we make ICs ourselves so if I might lack understanding about a customer's problems, I can talk to someone in M/A-Com and have them explain what people are trying to tell me! So there is an advantage being in an integrated facility. I ronically, t h o u g h we are a microwave c o m p a n y , most of our wafers go into the digital sector but there's e n o u g h c o m m o n ality in processing to make our facility very useful. III-Vs: One might sug,wst that there is a conflict o f loyalties here, maybe some o f ,~l/A-Com'~ substrate cus-
4 • Number t ° Februa~ 1~1
JV: The question is do you consider materials to be at the high end of a chemical or a mining business or do you consider it to be, I hesitate to say, at the "low end" of an electronics business? I think the right answer for GaAs is that it's part of the electronics business, rather than part of the mining business. It may be helpful to think sometimes of GaAs wafers as being a service rather than as a product. W h e n you think of it as a service it naturally gets into the overall electronics business. Conversely, people have often t h o u g h t that GaAs substrates are a good entry into the electronics business. What has h a p p e n e d on a n u m b e r of occasions in the industry is that, because the GaAs materials marketplace is quite small, the usual valueadded argument we used at m a n a g e m e n t school for why we should have this inaterials business on top