Is the U.S. falling behind in chip R&D?

Much ink has been devoted to the decline of semiconductor research and development in the United States. Pessimists say Bell Labs has thrown in the towel and pioneers like TI are following the path blazed by offshore foundries like TSMC. Optimists counter that Intel is still the world leader in next-gen semiconductors, IBM remains king in semi patents, IM Flash Technologies is making strides, HP Labs' memristors could make semiconductor memory obsolete and U.S. universities and national labs are inventing game-changing chip technologies. They say research alliances between U.S. industry, labs and universities are filling the gaps.

Many EEs lament the loss of U.S. R&D leadership embodied by the announcement that Bell Labs will no longer perform semiconductor materials and devices research. Bell Labs led the world by pioneering not only transistors, but also many major breakthroughs in semiconductor materials and devices, including the MOSFET, the charge-coupled device, molecular beam epitaxy, electron beam lithography, photovoltaic cells, the carbon-dioxide laser, the quantum cascade laser, the optical router and the first single-chip 32-bit microprocessor.

LASER SHOW: IBM's T.J. Watson Research Center recently demoed a characterization technology that could lead to commercially viable carbon nanotubes.

Bell Labs, based in Murray Hill, N.J., where semiconductors were pioneered, is now the research arm of Paris-based Alcatel-Lucent. The Labs will now devote the time of its 1,000 researchers and its $2 billion budget to the development of near-term technologies for wireless, networking, optics and computer algorithms. A small group will continue doing long-term research into high-speed electronics and nanotechnology, but the groundbreaking semiconductor work—for which Bell Labs won six Nobel Prizes—has ended.

Bell Labs' abandonment of long-term semiconductor research could be viewed as a nail in the coffin of semiconductor R&D in the United States. U.S. semiconductor makers themselves, however, claim that changes in business models at Bell Labs are merely endemic to the semiconductor climate, where chip makers need to roll with the punches to survive in the global low-margin, high-volume markets.

"The demise of U.S.-based R&D and semiconductor business has been prematurely declared," said Gregg Bartlett, vice president of design technology at Freescale Semiconductor. "People need to understand that what matters now is not what mattered when Bell Labs was setting the direction for the world in technology. It doesn't mean that there is not just as much innovation happening. There are still centers in the United States—Intel, IBM and the technology partnerships that IBM has—where [R&D] is a very core focus and there's a tremendous amount of innovation still happening in those."

Just saying so, however, will not convince the naysayers, who trace the seeds of change back to the memory business, in which almost every major U.S. chip maker participated at one time. Today, the only remaining U.S. maker of DRAM is Micron Technology—and it just reported a $1.6 billion loss for 2008. U.S. semiconductor fabs were next to suffer the same fate, with manufacturing moving offshore to the foundries of Taiwan Semiconductor Manufacturing Co. (TSMC), Chartered Semiconductor Manufacturing, United Microelectronics Corp. (UMC) and lately to foundries in mainland China. Pessimists point to these trends and predict that semiconductor R&D will be the next to go. Others, however, say U.S. semiconductor R&D is down, but not out.