Panel IV:

What Is Needed? Opportunities for Collaborative Activity

Moderator:
Nick Colaneri
Arizona State University

ROADMAPPING FOR FLEXIBLE ELECTRONICS

Daniel Gamota
International Electronics Manufacturing Initiative (iNEMI)

Dr. Gamota offered a brief history of the International Electronics Manufacturing Initiative (iNEMI), which evolved from a joint effort between the electronics manufacturing industry, led by Mr. Mauro Walker, then of Motorola, and the federal government, led by Dr. Lance Glasser, who was the director of the Electronics Technology Office at DARPA. Driving their actions in 1994 was the belief that manufacturing was an important core competency in the United States. Although the manufacturing landscape in the United States has changed significantly since 1994, the belief in manufacturing has not changed. “We believe that in flexible electronics today, there’s still an opportunity for us to be a very strong player in this emerging field,” he said.

iNEMI’s focus is on advancing electronics manufacturing technology, which he described as “establishing the infrastructure, and making sure that you’re ready to go to market today with product.” The essence of manufacturing, he said, is having a strong supply chain—the right people to not only design and provide the technologies and raw materials, but also to carry out production. An essential component in remaining competitive, he said, is the ability to predict emerging and innovative manufacturing technology.

Companies were active in iNEMI, he said, in part because of its grassroots nature and access to the state of the art in electronics manufacturing innovation. The cost of membership was small, he said, and the benefits were sufficient to attract a significant population of firms. Specifically, the Flexible Electronics Technical Working Group (TWG) had grown from about 25



The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement



Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.

OCR for page 86
86 FLEXIBLE ELECTRONICS Panel IV: What Is Needed? Opportunities for Collaborative Activity Moderator: Nick Colaneri Arizona State University ROADMAPPING FOR FLEXIBLE ELECTRONICS Daniel Gamota International Electronics Manufacturing Initiative (iNEMI) Dr. Gamota offered a brief history of the International Electronics Manufacturing Initiative (iNEMI), which evolved from a joint effort between the electronics manufacturing industry, led by Mr. Mauro Walker, then of Motorola, and the federal government, led by Dr. Lance Glasser, who was the director of the Electronics Technology Office at DARPA. Driving their actions in 1994 was the belief that manufacturing was an important core competency in the United States. Although the manufacturing landscape in the United States has changed significantly since 1994, the belief in manufacturing has not changed. “We believe that in flexible electronics today, there’s still an opportunity for us to be a very strong player in this emerging field,” he said. iNEMI’s focus is on advancing electronics manufacturing technology, which he described as “establishing the infrastructure, and making sure that you’re ready to go to market today with product.” The essence of manufacturing, he said, is having a strong supply chain—the right people to not only design and provide the technologies and raw materials, but also to carry out production. An essential component in remaining competitive, he said, is the ability to predict emerging and innovative manufacturing technology. Companies were active in iNEMI, he said, in part because of its grassroots nature and access to the state of the art in electronics manufacturing innovation. The cost of membership was small, he said, and the benefits were sufficient to attract a significant population of firms. Specifically, the Flexible Electronics Technical Working Group (TWG) had grown from about 25

OCR for page 86
PROCEEDINGS 87 members when it was founded in 2005 to about 50 in 2010. (By April 2012, iNEMI had approximately 100 members.) “We’ve actually gone through our third iteration of the flexible electronics roadmap chapter,” he said, “creating a new iteration every two years.” The roadmap process of gap analysis followed by establishing research priorities is carried out by the TWG and requires two years. The most recent flexible electronics roadmap, for 2011, had been submitted a month earlier. One strategic purpose of the roadmap was to stimulate the development of industry standards. He had learned in his 15 years at Motorola, he said, that without rigorous standards, it was impossible to achieve high yielding manufacturing operations. A Roadmap to See the “Gaps and Needs” It also provided the members who were entrepreneurs an opportunity to see the most significant “gaps and needs” of the industry. With this perspective, gained from the view of the supply-chain landscape from customers, competitors, and suppliers, firms had a better chance of producing a product that could meet real needs and generate significant markets with robust sales. Some of those needs, such as high-performance materials, had begun to emerge at the very beginning of the roadmapping process. The first flexible electronics roadmap was published in 2007 and stressed the need for high-performance materials, but work for that version began in 2005 to identify a portfolio of critical needs, and actually the first discussions to assess existing and future needs began as early as 2003. This roadmapping process was already providing a comprehensive and strategic view of development for flexible electronics for nearly eight years. “Those needs identified in 2003 have been coming up consistently on this roadmap,” he said, “and we’ve been waiting and waiting for solutions to be commercialized addressing those needs. Finally we’re starting to see people provide the products and technologies that are going to fill those gaps and needs.” Dr. Gamota noted also the special nature of manufacturing, which, unlike R&D, requires skills that engineers gain when working in industry supporting production operations. “There’s a difference when you get into manufacturing. It is a unique discipline, and it isn’t for everyone. When I joined Motorola from academia, my problem-solving skills were rewired to accommodate the manufacturing operations environment. You may have graduated as an electrical engineer, but a manufacturing engineer is what you ultimately become when joining a company whose core competency is manufacturing. It’s the same with materials science, or any other field. Those individuals participating in iNEMI appreciate the value of a roadmap to a manufacturing company. I didn’t have to go to iNEMI and convince them to put

OCR for page 86
88 FLEXIBLE ELECTRONICS a roadmap together for flexible electronics. They came to me and asked for a roadmap because they appreciate its value.” The information in the roadmap is critical for the manufacturing engineer, he said, “because if they can’t reproduce what they’re assembling in the R&D environment during process scale-up, they’re not going to succeed in high volume manufacturing.” He said that because of the roadmap, people had been working to provide technologies to address needs since 2003, trying to find valuable market niches for their own firms to introduce products. “So these technology needs had been on enough people’s radar screens that I believe we’re starting to see the fruits of our labor. Success in delivering manufacturing-compatible solutions becomes apparent when almost everybody in the room is racing to deliver new applications built on a common manufacturing platform to diverse markets— aerospace, automotive, health care.” Dr. Gamota summarized the process for gathering the knowledge needed to create and produce new products, especially at the early stages. R&D activities are also supported by the roadmapping process, he said, when participating members meet to pool their experiences about what knowledge is needed to develop a technology and the gaps that are needed to be filled. The gap analysis helps the industry make its case to funding agencies likely to support this kind of critical and sometimes high-risk R&D, especially NIST, DARPA, ARPA-E, and the Department of Homeland Security. The appropriated funding can then be funneled to the researchers, who can carry out the basic and applied research. In the past, iNEMI has established groups to perform research that it deemed critical; as an example, a project to investigate lead-free solder alloys was performed by iNEMI members when that topic was identified as a potential future industry barrier. The iNEMI roadmapping process has been growing consistently since 1994, he said. For the 2009 iNEMI Roadmap, there were more than 550 participants, including more than 250 companies or organizations from 18 countries. The 20 TWGs and 5 product emulator groups produced more than 1,400 pages of information, along with roadmaps for the needs anticipated during 2009-2019 for a variety of electronics related technologies—solar, lighting, printed wiring board, microelectronics packaging, and flexible electronics. Showing the Way to High-Volume Manufacturing The 2011 flexible electronics roadmap highlights products having potential applications in six product emulator groups: portable/consumer, office/large systems, defense and aerospace, medical products, automotive, and network communications. “So now you’re starting to see the flexible electronics ecosystem evolve. Adopters of flexible electronics are beginning to design future products that will integrate this technology which is being developed.” This represents a market pull for flexible electronics, he said, and therefore a basic manufacturing infrastructure must be established to enable customers to

OCR for page 86
PROCEEDINGS 89 FIGURE 4 Roadmap development: Product sector needs versus technology evolution. SOURCE: Daniel Gamota, Presentation at September 24, 2010, National Academies Symposium on “Flexible Electronics for Security, Manufacturing, and Growth in the United States.” plan for easy and efficient use of the technology. “A roadmap is, if anything, a great strategic exercise, because it shows you exactly how you need to prepare for going to high-volume manufacturing. Plus it lists specific technologies and their developers and, in many cases, the supply chain members who can help your company launch flexible electronics based products.” Dr. Gamota described a shift he had seen in roadmap topic participation. In 2007, the greatest need described by participants was higher- performance materials. “We heard, ‘If we can’t have better materials, we can’t succeed in developing item-level RFID tags. For RFID devices that track cargo on ships and inventory in retail stores, we need devices that operate at a higher frequency, or we’re not going to be able to offer desirable products to the market’.” In the 2009 roadmap, however, the focus shifted to a concern over substrates and processing equipment. “No more high-performance-materials complaints. The RFID customer had become a little more accommodating in terms of what design methodology they would use for the product, and they were more accepting in terms of what products they could produce based on the available materials.” For the 2011 roadmap, he continued, the concern had shifted once again—to processing equipment, “high-volume manufacturing platforms,” and near-term applications. “As we went through the different iterations of the roadmap,” he said, “we started populating each of the different value chain segments within the roadmap; we were able to observe the flexible electronics industry focus shifting as solutions to needs became available. You could see the

OCR for page 86
90 FLEXIBLE ELECTRONICS FIGURE 5 Shift in roadmap topic participation—Movement along supply chain. SOURCE: Daniel Gamota, Presentation at September 24, 2010, National Academies Symposium on “Flexible Electronics for Security, Manufacturing, and Growth in the United States.” market go from an emerging market to a market that today is ready to launch a suite of different products.” The SEMATECH Roadmap as a Model Dr. Gamota noted that the iNEMI roadmapping process methodology was different from the roadmap introduced earlier by Dr. Clayton of NorTech, which was developed to establish a strategy to capture maximum value from the high density of companies in northeastern Ohio that participate or could participate in the flexible electronics industry. He mentioned that the iNEMI roadmap was more like the International Technology Roadmap of Semiconductors created by SEMATECH, which served as a model. The iNEMI flexible electronics roadmap contained a situation analysis of technologies and products, such as substrates and their quantified key needs, gaps, and “showstoppers.” The roadmap has tables listing the attributes of flexible electronics enabling technologies for today, those that are midterm goals five years from now, and those that are goals 10 years from now. Next he turned to discuss the roadmap topic of functional inks, and the critical attributes and issues associated with them. He mentioned that the purpose of this exercise for functional inks was to ask the TWG members what attributes are needed to reach the 2016 and 2021 goals. The TWG identified a list of attributes that included higher performance, longer shelf and pot life, solution processability, compatibility with other functional inks, robust synthesis and formulating routes, and others. An important topic mentioned several times

OCR for page 86
PROCEEDINGS 91 during TWG meetings, he said, was improved manufacturing platforms. “I think what’s happening is that to address this topic we’re seeing the reuse and integration of processing equipment used by different industries to design new manufacturing platforms. First, the flexible electronics industry adapted a manufacturing platform that was developed for another use—graphic arts printing. Then it took another platform, developed for another industry, microelectronics assembly, and combined the two. “So I think that manufacturing of flexible electronics, large-area electronics, and organic electronics is really a reuse phenomenon whereby manufacturing platforms are being designed and built by leveraging existing hardware and integrating it with advanced manufacturing technologies.” In finding the best functional inks, he said, it was sometimes necessary to innovate, but often the most practical approach was to design product based on existing materials and equipment, which saved time to launch products and capture value. This he called a “very big issue” that had been highlighted several times by different groups stressing the importance to design product and qualify processes based on the best available materials instead of waiting for the “perfect” high-performance material. The main reason, he said, was that once a scalable manufacturing process is qualified, it is no longer viewed as an unproven prototype process or R&D study. It is now considered a moderate- volume or high-volume product line that can be improved when higher- performing functional material becomes available. “At the end of the day,” he said, “it is more important to have a stable manufacturing process operating at high yield versus running a line that sometimes assembles 2,000 products that have to be reworked.” Such issues were all becoming significant topics for discussion at TWG meetings and “bubbling up to the surface” as companies reached the stage of development where manufacturing readiness was the central issue. Dr. Gamota emphasized the importance of both reliability testing for manufactured products, which depend on what kind of use and handling a product will need to endure, and standards, which are being developed under the auspices of various standards bodies (e.g., IEC, IEEE, and IPC). He summarized the “top four needs and gaps” for flexible electronics manufacturing as follows: • In-line inspection and testing equipment: He said that every manufacturer of flexible electronics was requesting either a roll-to-roll line or a hybrid line with integrated inspection tooling. “This is really the most common request they’ve had from companies: ‘We want this today, and we want the design guidelines and materials to go with it.’ That tells me they’re convinced that flexible electronics technology is ready to offer products to the market and that they will be able to

OCR for page 86
92 FLEXIBLE ELECTRONICS expand their product portfolio later once their manufacturing operations are up and running. Addressing this need in the near-term is very important.” • Higher-performance semiconducting inks (including semiconducting, OLED, and PV active). • Simulation and design tools: “These are nice to have, but I think companies are most concerned about the first two. The technology may miss its opportunity for market entrance if the first two needs are not addressed quickly.” • Robust manufacturing platforms: “Flexible electronics manufacturers are reusing and modifying manufacturing platforms, as necessary, that have been developed for other industries; for the most part this is going quite well but a commercially available flexible electronics manufacturing platform would help accelerate the diffusion of products into the market and adoption of the technology by more companies.” Dr. Gamota closed by reminding his audience that the third roadmap was due out in January 2011, and that the next updating would begin promptly six months after that. “It’s a very robust and exciting field,” he said. “The product emulator groups that support iNEMI are very much interested in flexible electronics technology as a new product differentiator, and making a contribution to facilitate in its adoption by their companies.” CONSORTIA IN FLEXIBLE ELECTRONICS FOR SECURITY, MANUFACTURING, AND ECONOMIC GROWTH IN THE UNITED STATES Malcolm J. Thompson RPO, Inc. Dr. Thompson, the chair and CEO of RPO, Inc., said that his talk would focus on consortia, and that he would mention his company only briefly. RPO, he said, produces polymer optical waveguides designed to improve the performance of touch-screen technologies. He added that the company, headquartered in California with manufacturing facilities in Australia, was about to announce a manufacturing acquisition in the United States that is intended to produce about 2 million optical components a month for optical touch systems on a plastic flexible substrate. He said that he would try to describe the value and structure of consortia for this new industry in various environments. He noted that he had had a variety of experiences in electronics, both as a researcher, a venture capitalist, and company founder, and that both his experiences and the “mistakes” he had made had contributed to what he would say about flexible electronics. He said that the electronics industry had started in the United States and was in many ways still flourishing here. “Moore’s law continues to drive

OCR for page 86
PROCEEDINGS 93 toward smaller features, higher density, and more complexity,” he said. “But instead of building a facility that used to cost $100 million 20 years ago, it may cost today over $2 billion to make a large manufacturing facility.” Many of them, he added, have been built in other countries. Dr. Thompson said that about 166,000 people are employed in the U.S. electronics industry, and about 1.6 billion are employed in that industry in Southeast Asia. “For every 25,000 employees at Apple designing those great gadgets that they turn out today,” he said, “there are 250,000 people in Shenzen Fulong Electronics in China manufacturing those products. It’s a ratio of 10 to one.” However, he said, the future opportunities for flexible printed electronics were likely to be different and to allow for more diverse manufacturing opportunities. One reason for this is that the products will be “on the human scale.” This, he said, would hold true for products in energy, health care, consumer products, the battlefield, security, training and education, and communications. A Trend Toward Custom Manufacturing “Manufacturing is going to be customizable, and diversified products are going to be manufactured closer to the end user,” he said. He offered the “simplistic” example of printing, which 20 or 30 years ago would be done at a print shop, which “manufactured” the print for the customer. Today, he said, we each have printer in our home, which means that each person is the manufacturer of printed documents. He said that the new paradigm would feature much smaller manufacturing facilities located much closer to the point of use. Most importantly, he said, “you’re going to turn around a product very quickly, in a matter of a few days. I think that’s a really important difference.” Other future electronics opportunities, he said, would emerge in the category of flexible and potentially printed electronics at human scales. These were likely to include conformable and portable photovoltaics, wearable health monitors, sensors, and flexible displays and e-books. Dr. Thompson turned to some comparative global trends in flexible electronics, saying that the United States had made a lukewarm and slow response to the opportunities. He said that in East Asia, both Japan and Korea were moving rapidly, with strong government backing and “many giants involved.” In Europe, he said the primary effort was made by Germany, with strong activity also in Holland, the U.K., and Sweden. The industry in Europe had the “strongest government backing in more aspects, especially in Germany, with many large and small companies involved; he added that there were few startups in Europe. “Compared with Asia and with Europe,” he said, “the U.S. response has been anemic at best.”

OCR for page 86
94 FLEXIBLE ELECTRONICS FIGURE 6 “Why flexible electronics?” SOURCE: Malcolm Thompson, Presentation at September 24, 2010, National Academies Symposium on “Flexible Electronics for Security, Manufacturing, and Growth in the United States.” In looking to the future of flexible electronics, he reiterated the prediction made earlier that the industry was moving along a growth path similar to those of semiconductors in the 1990s, and then flat-panel displays in the 2000s. He warned, however, that it was impossible to predict the future of any technology with confidence. He recalled participating in a panel discussion in 1991 when experts from around the world were asked to predict the largest LCD screen that would be manufactured; the unanimous answer was about 30 inches. Given that caution, he asked why the future of flexible electronics did look bright. He said that previous speakers had done an excellent job in describing what the new industry would probably offer, including new forms of power, lighting, sensors, and communications. He said that instead of dwelling on those topics he would look more closely at the value of a consortium to combine the multiple interests of government, industry, and academia, and to mitigate the challenges to each of them. The Need for Partners Government, he said, is very much interested in job creation, national security, national competitiveness, economic growth, and the cost of government services. At the same time, it does not like to “pick winners or losers,” which he called very difficult to do. Government also wants support for precompetitive R&D and tended to work in silos without sufficient collaboration.

OCR for page 86
PROCEEDINGS 95 The interests of industry, he said, focused on profit, revenue, market dominance, and intellectual property, which he called “a big, big issue” when forming a consortium. “How do you get people to collaborate when you have to deal with intellectual property?” He said that the overriding concern for industry, however, is partners and infrastructure. “You can’t exist on your own,” he said. “You have to have an equipment and materials supply chain, along with customers like Hewlett-Packard, Dell, and others producing the products. You need to have a giant infrastructure established in order for you to be successful, however big your company is.” He noted the disadvantage of not having the big R&D centers like Bell Labs, Xerox PARC, and others. “They basically don’t exist anymore, so these big projects are not taken on by industry.” For academia, he said, the main interests would remain educating and training, innovative R&D, and new materials and processes, but all of these were pressured by the decrease in funding for universities. In addition, academic research was seldom well aligned with the needs of industry. Viewing the different interests and strengths of the three sectors, he said, clarified the need for a flexible electronics consortium. “And someone needs to verbalize that and bring it together, because they won’t do it individually themselves.” Why should this be done in flexible electronics? he asked. For one thing, materials, equipment, and processes cut across many research areas, which are beyond the reach of any single company. A consortium would allow collaboration to overcome challenges that are common to all sectors and companies. For example, all of them need expensive research that is precompetitive, reaches across applications, and is capable of broad adoption. “What the consortium essentially does is to make sure the picture is complete and allow identification of technology gaps.” This can be done through roadmapping and by ensuring that everybody is working together in a coordinated way, with not too many people working on the same thing. Consortia for Increased Efficiency “In the end, this is all about increased efficiency,” he said, “to get us from the start to the finish line. I think a national consortium is needed to orchestrate all of these players. We need to galvanize industry and government interests, we need to promote cooperation and collaboration.” He added that the pressure of poor economic times raises the urgency of collaboration, allowing the industry to pool resources, address the most pressing needs, ensure product integrity, and lower energy costs. A consortium would also help the industry adapt to the changes in manufacturing, where the printing industry must address the rise of e-books, printed photovoltaics, and low-cost medical sensors.

OCR for page 86
96 FLEXIBLE ELECTRONICS Dr. Thompson turned to some lessons learned from past consortia that could be applied to future consortia. He spoke of his role in founding the U.S. Display Consortium (USDC) in 1993, an industry-government consortium comprising 140 companies.12 His first act was to learn more about SEMATECH, the consortium to help strengthen the U.S. semiconductor industry. He called SEMATECH a “defensive organization” whose mission was to “save the equipment and materials semiconductor industry.” He learned that the USDC mission would have to be similar in taking a defensive position. But then he learned that, after SEMATECH was founded, it took three years to complete its first contract. The reason, he was told, was that each member firm was concerned about losing its intellectual property, and unwilling to reveal secrets. Eventually, he said, the companies discovered that they were all using similar processes, and they began to collaborate on mutual equipment and materials needs. Another lesson, he said, was revealed more recently as the display industry developed. It turned out that the most profitable company in the display industry today is not Samsung, which is a global leader in selling the displays themselves, but Corning, which makes the glass. “You cannot predict where the value will be in the value chain,” he said. “You have to embrace it all.” Some other lessons he learned about consortia were that timing is crucial, constant rethinking is required, and funding must be sufficient. The Consortium as a Champion Among the objectives of a consortium, he said, is to provide leadership, synergy, and collaboration. It must also address dual-use requirements, and create an IP policy that encourages innovation and commercialization. Finally, it must focus on U.S.-based companies and the creation of state-of-the-art manufacturing jobs. He emphasized that manufacturing is no longer a dirty industry, but a job that requires much more training, intelligence, focus, and fast turnaround. Creating such an organization, he emphasized, requires a champion, and the consortium itself must be one “that we can trust, because that’s what we need.” Another reason to support a consortium, he said, was that the interests of the electronics industry and government are intertwined. For example, defense and homeland security are dependent on the leadership of the U.S. electronics industry.13 Within that need, he said, are some specific goals that 12 The primary mission of the USDC was to help develop a U.S.-based manufacturing infrastructure for flat-panel displays. USDC has now become the FlexTech Alliance, shifting its emphasis from flat-panel displays to flexible displays. 13 He cited an article from The Economist: “… industrial policy works best when a government is dealing with areas where it has natural interest and competence, such as military technology or energy supply.” August 5, 2010.

OCR for page 86
PROCEEDINGS 97 must be pursued by the United States. One is the updating of DoD’s procurement and legacy systems. Another is the realization that the electronics industry has the potential for powerful job creation. He said that USDC and FlexTech Alliance had done well in coordinating the interests of the government and the industry. Dr. Thompson closed with the opinion that a national consortium could have a powerful and positive impact on the industry. He suggested that it would not be the largest part of the industry, but the most critical part. A primary task, he said, would be to oversee the development of the supply chain, which would be very complex and dynamic. He also suggested sponsorship of academic and industry R&D, a traditional strength, to maintain a flow of new manufacturing materials and equipment. He estimated that U.S. government funding of $350 million to $650 million over five years, with a 60 percent industry cost share, would attract “significant industry participation. So you double the amount of the government investment. And that could be orchestrated—it’s been done before. This is all about changing the economy and creating very new jobs.” COOPERATING ON THE MANUFACTURING CHALLENGE Thomas Edman Applied Materials Mr. Edman, vice president of Applied Materials for corporate business development and global corporate affairs and marketing, began by professing his support for consortia and partnerships. In addition to his position at Applied Materials, he was also chairman of the Flex-Tech Alliance, and his former company, Applied Films Corporation, had received one of the first grants from USDC, the predecessor of Flex-Tech. “It was a grant that was very important to us in establishing the company,” he said, “and building a company around the display industry.” Applied Materials, he said, is a world leader in nanomanufacturing solutions, and the number one equipment supplier of semiconductors, LCD displays, and photovoltaic solar technology, and is moving in additional markets in energy and environmental solutions. The company also has strong roll-to-roll manufacturing capability in Germany. Company revenue was about $5 billion “in a down cycle,” he said, referring to 2009, and about $10 billion in an up cycle, which he estimated to be the case in 2010. The most important corporate figure, he said, was the budget for R&D, which had remained constant at about $1 billion since 2000, “in bad times and good times.” The company had a presence in 93 countries, with manufacturing facilities in China, Germany, Israel, Italy, Singapore, Switzerland, Taiwan, and the United States.

OCR for page 86
98 FLEXIBLE ELECTRONICS FIRST THEN NOW Cost Per Transistor Cost Per Area Cost Per Watt 20,000,000x 20x Toward grid parity cost reduction cost reduction over 30 years 1 over 15 years 2 AT 1976 TRANSISTOR PRICES AN iPOD ® WOULD HAVE COST $3.2B 1 Source: SIA, IC Knowledge LLC 2 Source: Display Search, Nikkei BP, Applied Materials FIGURE 7 Delivering manufacturing scale drives low costs. SOURCE: Thomas Edman, Presentation at September 24, 2010, National Academies Symposium on “Flexible Electronics for Security, Manufacturing, and Growth in the United States.” A Focus on Cost and Commercialization In producing equipment products, he said, the focus of the company was on costs and commercialization. The industry as a whole had succeeded in lowering costs sharply since the 1970s. He noted that transistor prices had been reduced by a factor of 20 million; at 1976 transistor prices, he said, an iPod would cost $3.2 billion. “And I hesitate to tell you how large the device would be.” Since then, he said, the company has focused on taking a similar approach to other industries. For example, the cost per area of displays had been reduced by a factor of 20 over the past 15 years. The effort today is to do the same for solar PV, driving the cost per watt downward toward grid parity. Applied also has a full line of roll-to-roll platforms, which he said were well suited to flexible electronics. From their very large area tool that made transparent and metalized packaging materials, they had developed a smaller modular tool called the SmartWeb, which is focused on flexible electronics. “We define the target market today as being PV, touch panels, and flex display applications, which are growing.” The company also makes barrier films for the battery industry and other sectors.

OCR for page 86
PROCEEDINGS 99 In roll-to-roll processing. the company has focused on lowering costs per area and has been reasonably successful at increasing width and producing uniform films. The challenge comes on the functional side—materials innovation. Where Partnerships Have a Role Here, he said, is where partnerships could have a role. “Our customers’ customers are very cost-conscious,” he said. “They care about cost, and they also care about quality. That’s been driving them toward lowering capital intensity and maximizing the efficiency of their production lines.” This, said Mr. Edman, creates a challenge for an equipment manufacturer. The firm is being asked to meet a very intense competitive environment while its chief end markets have slowed in growth. It is also being asked to do more in film process development. While the R&D demands have not slowed in any of the industries served, Applied is being pushed to maintain leadership in those markets. In the 1990s, the company could do a lot of the work be itself, but it cannot afford to do that today. “That, to us, means partnerships,” he said. “That means looking outside of Applied Materials.” One place the company looks is to its vendors, its customers, and companies in adjacent spaces. Here it can develop processes or link processes that meet customer demand. At its Maydan Technology Center, for example, an advanced semiconductor processing facility in Sunnyvale, the company has invited partners to work side by side with Applied’s engineers. “They place their equipment next to ours, we run the full process for our customers, and we develop on that process. This is very important to us in speeding our time to market.” Working with Companies in Adjacent Spaces A second area of focus for partnerships is venture investments. The company is trying to encourage innovation in new end markets, in some cases working with companies in adjacent spaces. Applied has invested about $100 million in its ventures portfolio, which he called a very important part of the company’s future growth in new applications. He highlighted several companies, including Infinite Power Solutions, a flex battery company; Plextronics, which he called “an excellent company in the materials space,” also involved in flex; and Tera-Barrier, a company in Singapore that had developed encapsulation technology. Another area, Mr. Edman said, was global partnerships, of which he showed a partial list. “We believe our markets are growing in Asia,” he said, “so we have established R&D infrastructure in Zhejiang for solar, as well as a

OCR for page 86
100 FLEXIBLE ELECTRONICS manufacturing infrastructure in Taiwan and in Singapore.” Partners in Germany include Fraunhofer Institute, whose structure was much admired by Applied. “Placing our equipment there has allowed us to learn a lot,” he said, “and I think our partners in Germany have benefited as well.” A fourth category is global university investments. “This is another means of leveraging our more fundamental research ideas and bringing them along the path toward commercialization. It’s also a great means of attracting students.” Examples included partnerships with the Indian Institute of Technology in Bombay, the University of California at Berkeley, and Stanford University. Partnering with Government Applied has also created an externally funded RD&E program, which has grown rapidly. We realize it is important for us to partner with the government and to look outside for assistance and for innovation.” He said that one driver for this change was the energy business, which is policy driven and “a world where governments play a very important role.” Prime examples, he said, were DARPA and now I-ARPA, which were funding interesting innovations in a number of Applied’s areas of focus. “We do have this urgency to commercialize nascent technologies,” he said, “and we realize we can’t fund it all ourselves.” Some of the programs the company has joined in include energy, batteries, and energy storage. These programs take place in a cost-share environment, he emphasized, which “fits very well with our strategic direction.” Another category of major research institutes, he said, “is where the real value lies, where we are able to commercialize our capabilities and assist our customers to commercialize entire processes.” He cited IMEC in Belgium as “a great example of this in semiconductors,” along with the Fraunhofer Institutes and the Maydan Technology Center, which he said is increasingly becoming “a wonderful platform for commercialization of new technologies in semiconductors.” Finally, Mr. Edman said, the Web Group was developing flex-related collaborations with major institutions. He mentioned again the historical involvement with the Fraunhofer system, placing roll-to-roll coaters in Fraunhofer facilities. The company also worked with the University of Cambridge on longer-term development programs, and with the Center for Advanced Microelectronics Manufacturing (CAMM) in Binghamton, New York, “which I would call our attempt to reach out to a potential full processing facility and our desire to be part of an innovative process line as flex commercializes.” In conclusion, Mr. Edman stated that Applied Materials was well positioned as a potential partner to the flex industry. Government-industry partnerships had become more important to the company, along with the ability to leverage R&D dollars and commercialize more quickly. “We are seeing

OCR for page 86
PROCEEDINGS 101 applications emerge at an incredible pace in the flex area, and yet we have a relatively small business unit in flex. I think most of the equipment companies are in this position, with a relatively small business trying to service multiple applications. So the need to have an integrated platform I think is immense, and represents a terrific opportunity for the U.S.”