Research and Markets: The Challenge for Indium Phosphide Photonic Development an

Examines the current state of the InP device market and its future direction. Addresses challenges for a pure foundry play and the role for InP devices. Seeks to find the best ways to address the needs for InP device development in the U.S.

Indium Phosphide, InP , is a semiconductor material with properties that make it particularly suitable for optoelectronic devices. Optical communications requirements drove its initial development. Recently, the applications for InP semiconductor devices have broadened to include high-speed electronics and optical sensors.

DARPA (Defense Advanced Research Projects Agency) considers InP devices important for military systems and defense initiatives. Currently, DARPA funds the Photonics Technology Access Program (PTAP), and OIDA administers the program. PTAP provides universities with pre-commercial photonic devices for research and teaching. New applications resulting from this program may lead to new commercial and defense markets. On multiple occasions, PTAP participants have requested InP foundry support for their research efforts.

A number of companies are operating with a horizontal business model for manufacturing of InP semiconductor devices. Such a business model requires the existence of foundries that can fabricate devices to users’ design specifications. Commercial businesses engaged in fabricating InP devices, however, are fighting to survive. Thus, it is appropriate to review the requirements, risks, and benefits of an industry based on an InP foundry model. The questions are: 1) Do InP foundries make commercial sense in the current market conditions of electronics and optics; and, 2) Should the government support advances in InP photonic device development and if so, how.

This document reviews the presentation materials and recommendations of the workshop held in Arlington, Virginia, on November 3, 2005.

Introduction

The major market areas

InP electronics

InP optoelectronics

The technological revolution

The business plan upheaval

The Silicon Industry Model

The MOSIS community (wafer foundry/prototype services)

The InP Device Market

Market data

Mitsubishi — Michael Chen

IQE plc — Drew Nelson

Intel — John Hutchinson

First Analysis Private Equity — John Dexheimer

Cisco Systems — John Oberstar

The Challenges and Role of the InP Foundry

What criteria enable a foundry to operate profitably?

What does a fabrication facility really cost?

Direct labor vs. fixed and variable overhead costs

Concepts on the cost of a foundry

IQE plc — Drew Nelson

CST — Wyn Meredith

Eblana Photonics — James O’Gorman

Is there a standard device?

Bookham Technologies — Ian Woods

EMCORE — Hong Hou

Apogee Photonics — Milind Gokhale

Eblana Photonics — James O’Gorman

Agility — Norbert Puetz

UCSB — Daniel Blumenthal

Requirements and Challenges for Supporting InP Photonic Development in the U.S.

The Questions Addressed by Workshop Participants

What is the state of the InP device market and what is its future direction?

Is there a right InP Foundry model considering the market size and costs?

How do you address the needs for photonic development in the U.S.?

Recommendations

Optoelectronics companies

Foundry companies

Government/regulatory measures

Summary

Appendix A - Glossary of Acronyms

Appendix B - A Review and Roadmap of the Optoelectronic Indium-based Semiconductor Industry - An OIDA White Paper

Appendix C - Workshop Agenda & List of Attendees

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