Small semiconductor manufacturer goes to Washington to argue against the formation a U.S. consortium of DRAM makers
If U.S. Memories Inc. manages to get up and running, it won't be through any fault of T. J. Rodgers. The founder and CEO of Cypress Semiconductor Corp. has argued tirelessly against the would-be semiconductor consortium, which aims to bolster the domestic supply of so-called DRAMs (dynamic random-access memories), a market dominated by the Japanese. Now, he wants to go after U.S. Memories in the arena he knows best: the marketplace.
The controversy dates back to June 1989, when a bevy of big electronics companies began organizing U.S. Memories as a major new challenger to the Japanese DRAM makers. The most important supporter was IBM, which offered to license its proprietary 4-megabit DRAM technology to the start-up so it could enter the market on a massive scale. First, however, U.S. Memories tried to get Congress to relax the antitrust laws. Last summer, Congress held hearings on the proposal, and Rodgers showed up to argue against it.
He contended that U.S. Memories was a threat not just to Japanese DRAM makers, but to America's non-DRAM semiconductor companies. "The reality is that the consortium will have to make any type of device required to make it economically viable," Rodgers testified. As soon as U.S. Memories is forced to move beyond DRAMs, it "will become a company armed with antitrust immunity and government subsidies -- competing with my company and the hundreds of other semiconductor companies in the United States that do not enjoy [its advantages]. . . . If the government wants to support the semiconductor industry, [it should] put money into education."
In late September Rodgers went a step further, challenging IBM to license its DRAM technology to Cypress. If an agreement could be reached by year end, he said, Cypress could be producing DRAMs by June in a Texas plant that is only at one-third capacity.
Not everyone is convinced the proposal is for real. "T. J. Rodgers is more interested in what he can do to keep his name in the papers than anything serious," charges Sanford Kane, president and CEO of U.S. Memories. Maybe so, but Cypress is now negotiating with IBM for a license, and John Hamburger, Cypress's marketing and communications manager, estimated in December that there's a 50-50 chance of working out an agreement. So stay tuned for what could be the next battle in the semiconductor wars.