Chips Corporation Case Study

The story of course does not end there. Since the early 1980s, the pace of innovation in semiconductor technology has accelerated. Chips currently in production contain in excess of 1,000,000 transistors. Dynamic random access memory chips (DRAMS), which have set the pace of progress in the industry, have provided a fourfold increase in capacity every three years—even though each increase has required engineers and scientists to solve ever more complex problems, driving the technology to even greater heights.

The photolithographic process used to fabricate the vast majority of semiconductor chips is conceptually relatively simple. The manufacturer applies a layer of photoresist (a material that reacts to light and resists the action of certain chemical agents) to a wafer of material called a substrate. The photoresist is exposed with a predetermined pattern. After being "developed," portions of the photoresist are washed away, leaving the substrate exposed. The substrate is then treated with a chemical agent that may etch material away from the exposed part, deposit material on it, or permeate into it. The manufacturer removes the photoresist and then repeats the process for each of the multiple layers required to form the device.5

The photolithographic process just described has many applications beyond semiconductor chips. The substrate does not have to be silicon (or any semiconductor for that matter), and the product does not have to be electronic circuitry. Manufacturers can use photolithography with masks on a variety of substrate materials, such as glass, polycrystalline silicon, sapphire, ceramic material, superconducting material, magnetic domain material—the list goes on and on, and continues to grow.

Moreover, the resulting product does not have to be a "chip." It can be a flat-panel display, a miniature motor and gears, a thin-film recording head, or any one of a number of items that are not usually considered to be electronic circuitry. It is possible that within a few years, virtually every portion of computer hardware, from the display to the mass storage devices to the packaging for chips, will be fabricated by using some kind of masking process.

Each stage of the process, from preliminary design through fabrication, requires investment, skill, creativity, and just plain hard work. As the technology became increasingly important in the U.S. economy, additional legal protection at some stage of the process appeared to be necessary to protect this investment if innovation was to flourish.6 Beginning in the late

Bad move, say crisis management experts. Statistics are a classic defense in such situations, but they are unpersuasive at best and genuinely misleading at worst.

"Probabilities are always off," says Mitroff, pointing out that few believed Exxon's claim after the Valdez spill that such an accident would happen only once in 250 years.

Intel's statements are already looking suspect now that IBM has concluded that a Pentium user could encounter problems as often as once every 24 days.

Another blunder: Intel has offered to replace the chip only in cases in which it believes the flaw could cause a problem--a classic case of focusing on the short-term problems caused by the crisis rather than on the more important long-term issues.

"They should take (the chips) back, no questions asked," says Larry Kamer, a San Francisco public relations executive. "They have a good, solid reputation that they have spent years and millions of dollars to develop. That's the equity they have to protect."

By refusing to replace the chips for any customer who asks--especially when Compaq and IBM have both offered to do so--Intel "comes across as the bad guy," Kamer says.

The Pentium debacle is following the path of the classic "crisis" as described by David Umansky, a crisis management expert in Baltimore. He says a crisis begins with a surprise occurrence, develops in an atmosphere of insufficient information, results in an increasing flow of events, loss of control, siege mentality, intense scrutiny from the outside and short-term focus.

The critical action required of Intel, Umansky says, is to be more open and communicative about its view of the situation. "If you're not, you're leaving the media to say what the problem is and what should be done about it."

"It's almost irrelevant what Intel says. If IBM thinks it's a problem, it's a problem," Mitroff says.

Already there are signs that the problem is undermining Intel's reputation, just as the company is spending hundreds of millions of dollars to build a brand image among consumers. On the Internet and elsewhere in computing circles, the jokes are flying. One refers to the widely displayed "Intel Inside" logos on PCs that use Intel chips. Goes the line: "Intel Inside, Can't Divide."


More Computer News

* The TimesLink on-line service includes a large selection of other recent articles and information about Computers & Technology in its Business section.

Details on Times electronic services, B4


0 Thoughts to “Chips Corporation Case Study

Leave a comment

L'indirizzo email non verrà pubblicato. I campi obbligatori sono contrassegnati *