Government-funded rad-hard fabs fading away
Back in 2002 tempers were flying in the radiation-hardened (rad-hard) electronics community over government funding of rad-hard semiconductor fabrication (fabs) foundries owned by BAE Systems in Manassas, VA, and Honeywell Microelectronics in Plymouth, MN. While covering the story back then for another publication, I received a few “no comment” responses and had one government source hang up on me. But I also had others who risked the ire of their main customer – the U.S. Department of Defense (DoD) – to speak about what they thought was an unfair practice.
In 2002, competitors to BAE Systems and Honeywell were angry, saying that the government was essentially funding their rivals – at more than $100 million each to keep their fabs alive. The government countered that certain rad-hard technology produced at these fabs was essential to national security as it was used on military satellites and spacecraft. It’s no secret that rad-hard fabs have struggled to be profitable because of the low-volume nature of the military space market. Semiconductor fabs can be money pits. Many commercial semiconductor companies have since abandoned their fabs because of exorbitant operating costs. Well, now more than a decade later, market conditions are forcing BAE Systems to do the same.
“BAE Systems’ Electronic Systems Sector is initiating the transition to a ‘fabless’ radiation-hardened electronics business model, [having begun] the transition of wafer production on Nov. 15, 2012,” according to the company’s official statement. “The demand needed to sustain wafer production in-house at our foundry is not present in the current market. By working with other commercial foundries to produce these products, BAE Systems will be able to save costs for the company and address the demands of future space systems. BAE Systems will continue to operate its space electronics business out of the Manassas facility and no change will take place to the core capabilities there, which include: space computer and subsystem design, ASIC and circuit design, computer/board/box manufacturing, component packing and electrical testing, and radiation testing and failure analysis.”
This does not come as a surprise to many in the rad-hard community, who always thought the government had blinders on when it came to understanding the business side of the equation. However, today, these fabs are not the only game in town for strategic rad-hard technology. Many semiconductor companies are partnering with commercial foundries to produce extreme rad-hard parts through the hardening-by-design process.
“The expensive captive fabrication facilities cannot be maintained nor cost investments justified for radiation-hardened products,” says Dan King, President of King Space Research in Albuquerque, NM. “Most vendors already have gone to business models where they have a partnership with commercial manufacturers for front end of line production. The commercial fabrication sector is suffering with the same issues, as fabrication facilities can run in the billions of dollars for the tooling. The government funding forced BAE Systems to follow the government model when BAE Systems was already starting to use hardening-by-design techniques with IBM’s foundry. They had to change their business model to redirect resources to apply government funding for an in-house solution and in the end, that fab was not cost-effective investment. BAE Systems is back to the prior model of fab partnership.
“Manassas and Honeywell have significant board/box level processor development capabilities and ASIC compatibilities with commercial partners,” King continues. “There really is not a cost-effective ASIC solution for the low quantities required for space. Structured ASIC and various gate array variants are still trying to capture this market, while there is still room for the FPGAs to capture the low-cost niche or vendors with a low-cost FPGA-to-ASIC conversion flow.”
Working with high-volume commercial foundries can also improve product quality and reduce risk. “Some military devices are being fabricated on an old semiconductor process at boutique fabs that do not run in volume anymore,” says Jim Kemelring, CTO with Triad Semiconductor in Winston-Salem, NC. “If you fabricate through a big fab on a popular process that is running 10,000 wafers a month, you are running on a process that is well in control with devices that yield high and are reliable.”
The military rad-hard market – thanks to DoD budget cuts and slow growth – will not be a high-volume market any time soon. However, export reform coming out of the Obama Administration might free space semiconductor companies to do more business internationally. For more on export reform see the Special Report on page 20. For more on rad-hard technology and market trends, see our Mil Tech Trends section starting on page 26. DoD budget coverage can be found on page 10.