Chip Maker Suppliers Are Urged to Unite

Suppliers to the U.S. semiconductor industry are crucial to the future of American electronics and need to join forces to stay alive, an IBM executive told a group of industry leaders Thursday.

The troubles of chip makers have been widely publicized recently, but the more than 800 U.S. companies that supply them with equipment are in even more severe financial straits, authorities agree.

If the equipment makers die off, U.S. chip makers will be dependent on foreign suppliers for the machines that permit the creation of state-of-the-art chips, said Sanford L. Kane, a vice president of International Business Machines.

American companies are worried that they would be at a disadvantage in selling advanced computers, phone switches, weapons and the like if they have to stand second in line for advanced chips.

“We believe it’s vital for the U.S. industry to be thriving,” Kane, IBM’s liason to the industry, told members of an international equipment makers trade group, the Semiconductor Equipment and Materials Institute.

IBM is the world’s largest producer of computer chips, although it consumes all it produces.

It relies on outside suppliers for much of its chip making equipment and has taken a leading role in searching for ways to rescue them.

Kane stressed IBM’s support for plans for Sematech, a nonprofit organization of U.S. chip makers and chip suppliers that would seek to match the Japanese through cooperation on research and development.

Like makers of tractors and plows, who sell to farmers, chip equipment makers are in trouble because their hard-pressed customers have cut back on investment.