Western Digital to Sell Production Line to Poland : Technology: Sale of the semiconductor-making equipment to state-owned firm is believed to a be a first in U.S.-East Europe trade.

In an unusual transfer of U.S. technology to Eastern Europe, Western Digital Corp. said it plans to sell a semiconductor production line from its Costa Mesa plant to a computer manufacturer in Poland.

Several trade officials said they know of no other instance in which a U.S. company has shipped a semiconductor production line to an Eastern European country. The deal is subject to approval by the U.S. government and by employees of the Polish company.

“If approved, this would be a pretty precedent-setting deal,” Western Digital Chairman Roger W. Johnson said this week.

Western Digital announced plans in 1988 to close the Costa Mesa plant, which makes silicon wafers used to make computer chips, and move production to a modern $115-million plant in the Irvine Spectrum business park. The 250 employees at the Costa Mesa plant are being transferred to Western Digital’s new plant, which began initial production in July, Johnson said.

Andrzei Musielak, general director of Elwro, a state-owned Polish computer manufacturer that employs 10,000 people, said in a telephone interview that he expects employees to approve the deal next week. As proposed, the Polish concern would pay Western Digital $4 million for the semiconductor-making equipment, said Robert Blair, a Western Digital spokesman. The Irvine firm would receive another $1 million for dismantling, shipping and assembling the equipment in Poland, and for training Elwro employees how to use the machinery.

The 46,000-square-foot plant on Red Hill Avenue in Costa Mesa is capable of manufacturing 500 silicon wafers daily. If the deal is approved, the Poles will initially acquire 40% of the plant’s equipment with an option to buy the remainder, Blair said.

The equipment that Elwro is buying is capable of producing 3.5-micron circuitry, a technology that is considered old by U.S. standards. The newest silicon wafer fabrication plants, such as Western Digital’s plant in Irvine, produce circuitry of 1 micron or less. (A human hair is about 40 microns wide.) The designation is used to refer to the size of the smallest feature on a microchip, such as the width of a transistor.

Blair said Western Digital has been planning to get out of the 3.5-micron wafer business for a while.

“This pending transaction would enable us to capture value for the 3-micron equipment and at the same time enable us to assist an emerging economy to fulfill its own technology needs,” he said.

For the Polish company, which is the oldest computer maker in Poland, the equipment will enable it to build more sophisticated computers for sale in Eastern Europe.

“This will help their semiconductor industry begin to achieve some level of competitiveness,” Johnson said.

Western Digital initiated talks to sell the plant in February, Blair said. The sale must also be approved by the U.S. Commerce Department.

Michael Liikala, head of the Commerce Department’s Bureau of Export Administration’s office in Newport Beach, said the government is “looking much more favorably” to technology exports to Poland, Hungary and Czechoslovakia. He said he couldn’t say if the Western Digital sale is likely to be approved.

Earlier this year, the Commerce Department liberalized the exports of older computer technology, based on Intel Corp.’s 80286 and 80386 microprocessors, to Eastern Europe as a result of political changes in those countries, he said.

Elwro plans to send about a dozen engineers to Western Digital in early 1991 to study the operations of the Costa Mesa plant, Musielak said. The Polish concern plans to have the plant operating in Wroclaw, an industrial city 200 miles southwest of Warsaw, by late 1991.

Selling entire production lines to developing countries is not new, Liikala said. China, for example, purchased entire steel and brick manufacturing plants from U.S. and European companies in the 1980s. But the sale of a semiconductor production line to an East European company is a new development, he said

Johnson said the proposed sale is part of a larger effort by Western Digital to strike up future sales of its computer components in Eastern Europe.

“We’re looking at licensing some of our products to Eastern Europe manufacturers, selling products to them and, in the case of Poland, selling them basic manufacturing technology such as semiconductor equipment,” he said.

Johnson said negotiating the Polish deal was not difficult, although it required that the company adapt to the rapid changes occuring in Polish government bureaucracies.

Times staff writer Dean Takahashi contributed to this report.