Regaining That Competitive Edge : Sematech success story shows value of government/industry teamwork

Don’t look now, but the idea of public-private partnerships, until recently derogated as a corruption of honest market capitalism, may soon be in vogue, thanks to Sematech--and, in fact, market economics.

Everyone knows that when it comes to developing cutting-edge high technology, new research efforts involve tremendous start-up costs. That fact alone might make partnerships between government and industry an increasingly attractive idea; the Sematech success nails down the point.

This consortium of U.S. computer chip companies and the Defense Department was formed in 1987 to help the domestic semiconductor industry stay competitive. Using $500 million in public and private money, Sematech has succeeded in developing American-made manufacturing equipment to produce ultra-thin circuity chips that pack tremendous computing power into smaller units.

The Sematech development comes at a time when U.S. chip makers are gaining ground again on world markets in both sales and in manufacturing technology. With U.S. firms more competitive now, the government and some Sematech members are cutting back on their donations and participation in the consortium. The Defense Department has reduced its funding by $20 million, to $80 million, in order to allocate research money to a greater array of projects.


One of these projects is a newly formed consortium of government researchers and high-tech companies. The group seeks to develop a nationwide data network--a high-speed computer “superhighway.” This is a priority of the Administration and marks the government’s first entry into the field.

The goal is a fiber-optic network that transmits huge quantities of computerized data over strands of glass smaller in circumference than a human hair. The project, funded equally by government and private companies, has been described as the Information Age’s equivalent of the transcontinental railroad or interstate freeway system. Both transformed American life and industry, bringing new prosperity.

Debate is beginning over the question of public or private ownership of the “superhighway.” But that can wait until the technology, specifications and uses for the technology are developed. What counts now is that government and private interests work together. As the nation ratchets down its spending on defense and military research, joint efforts aimed at civilian technology are crucial to developing new industries and jobs.