Ford to Offer New Chip for Open Market : Gallium Arsenide Seen as Successor to Silicon

Ford Motor Co. says it will make and sell semiconductors made of gallium arsenide, a promising material expected to replace silicon in many types of integrated circuits.

Ford, which now designs and oversees the manufacture of silicon-based chips for use in its own cars and aerospace products, will be the first to produce the exotic new chips in volume for sale on the open market.

Gallium arsenide can transmit electronic signals up to 10 times faster than silicon, making it attractive for powerful computers and other uses. It is expected to be used in the next generation of so-called supercomputers in this country and Japan.

Tricky to Make

However, experts say the material--a compound of the elements gallium and arsenic--is expensive and tricky to make into chips on a high-volume basis.

Ford is to announce details of its production plans today when it opens a $33-million factory in Colorado Springs, Colo. The factory will be operated by its 3-year-old high-technology subsidiary, Ford Microelectronics Inc. Ford says the plant is the first designed for low-cost, high-yield production of gallium arsenide circuits.

Silicon is the most commonly used conducting medium for microchips. One limit on the speed and capacity of memory devices is the speed at which a semiconductor permits electrons to travel through it.

Ultra-fast computers now on the drawing boards “are requiring performance levels that are out of the reach of silicon,” said Anthony Livingston, sales and marketing vice president at Gigabit Logic Inc. of Newbury Park, Calif., the first firm to specialize in production of gallium-arsenide chips for outside use.

Technological Moves

Ford, one of the recently rumored buyers of computer maker Sperry Corp., has become a major designer and producer of microchips for under-the-hood computers that control emissions, engine timing and other functions in today’s cars. As the auto firms have gained expertise in electronics and industrial automation, they have been diversifying into high-technology areas.

Ford’s microelectronics unit, based in Colorado Springs, was formed in 1982 largely to design proprietary semiconductors for Ford Aerospace & Communications Corp., a maker of satellites and various defense products, and for Ford’s car engines. Its president is John R. Wallace, a former executive at Intel Corp., the Santa Clara, Calif., semiconductor giant.

Despite such experienced executives, Alan E. Heimlich of SSP Inc., a semiconductor industry consulting firm in Santa Clara, called Ford’s move a gamble because of inherent manufacturing difficulties with the material.

“Every major semiconductor manufacturer has had research projects in gallium arsenide,” Heimlich said. “For Ford to move into that market without having produced a hell of a lot of silicon circuits, I’d be very dubious about their ability to produce gallium arsenide (chips) in large volume.”

Additional Advantages

Most production of gallium arsenide material has been by companies using it internally, in microwave transistors, fiber-optic systems and a few other specialized uses, or for military purposes. In addition to being fast, gallium arsenide tolerates a wider range of temperatures than silicon, needs less power and performs better in the presence of radiation, a key military advantage.

As the technology advances and costs come down--a gallium arsenide wafer today costs $200, or 15 times as much as a silicon one, Ford says--wider uses are seen for the material in computers, telecommunications equipment, industrial instruments, testing equipment and other products that demand high-speed operation.

Market research puts the total 1983 gallium arsenide market at $75 million, two-thirds of it from the military. It is expected to reach about $7 billion by 1990, when gallium arsenide would account for 5% to 7% of the semiconductor market and the military share would have dropped to one-third. Some say gallium arsenide could account for 30% of the market by the year 2000.

Among Gigabit Logic’s customers is Cray Research Inc. of Minneapolis, the leading producer of supercomputers, which plans to use gallium arsenide chips in its Cray 3, which is due out in 1987 and will be the first computer so equipped. Livingston said Japan’s much-publicized “fifth generation” computer now under development will require the speed afforded by gallium arsenide chips.

Of Ford’s entry, Livingston said it will “establish more credibility for the technology.” As the market grows, he said, there will be plenty of business to go around. He predicted that several major semiconductor makers will enter gallium arsenide production within two years.