NEC Divests Optical and Microwave Operations NEC is to divest its optical semiconductor operations together with its microwave compound semiconductor and silicon activities into a new company, to be formed in October 2001. NEC identifies these devices as key enablers of broadband and mobile networking equipmentthe move is aimed at reinforcing NEC s position as global leader in this area while maximizing the overall corporate value of the NEC Group, says the company. The new spin-off is expected to generate first year sales of 120 billion ($1.02 billion) and will employ around 500 people. NEC will exercise 100% ownership and intends to take the as-yet unnamed company to an initial public offering within two years. Device R&D will be located at a facility within the NEC Kansai plant in western Japan and at Tsukuba City, Ibaraki Prefecture. NEC says this will allow the new company to achieve a highly integrated research, development and production organization, and believes this will treble sales of optical and microwave devices from 100 billion ($852 million) in fiscal year 2000 to 300 billion ($2.55 billion) by 2005. NEC is one of the world s largest manufacturers for optical networking components, including 2.5 and 10 Gb/s laser diodes and InGaAs detectors for WDM applications, in addition to GaAs-based microwave RFICs used in wireless handsets and a range of other applications. According to Japan s Nihon Keizai Shimbun newspaper, sales of NEC s optical and microwave chips for high-speed communications currently account for around 9% of the world market. NEC says it will also consider additional investment in California Eastern Laboratories (CEL), a company based in Santa Clara, California that represents NEC in the North American market. The new semiconductor firm will also select foundry partners in Japan and Taiwan and investigate opportunities with optical semiconductor companies. NEC Develops SiGe RF Transistor In more news, NEC has begun shipping samples of a high-performance SiGe PA for use in W-CDMA cell phones and multimedia devices. The chip achieves a noise factor of 0.9 dB and a power gain of 14.5 dB, 60% higher than conventional silicon transistors. The sample price is 27 cents, and the company will launch production at 2.5 million units per month in April, ramping to 30 million units per month by the end of 2001. NTT Electronics Builds WDM Device Plant NTT Electronics has constructed a manufacturing plant in Naka, Ibaraki Prefecture for WDM devices at a cost of 14 billion ($12 million). With a total floor space of 20,000 m2 (215,000 sq.ft.), the plant will produce WDM devices, semiconductor lasers and other components for supply to major communications equipment makers including Lucent Technologies. One of the largest of its kind, the factory expands the company s WDM device production capacity by 300400%. NTT Electronics is 86% owned by the NTT group and posted sales of 28.3 billion ($240 million) in the year ended March 2000. Manufacturers Boost Compound Semiconductor Output Japanese compound semiconductors makers plan to boost output in response to rising demand from manufacturers of optical communications equipment, cellular phones and DVD players, according to industry sources. Showa Denko KK has provided more details of its recently announced 3 billion ($25.6 million) investment to more than triple capacity of InP substrates and epiwafers at its plant in Chichibu, Saitama Prefecture [see CS 6(7), p. 37]. The company says it will build a production facility for InP wafers at the plant and is targeting a monthly output capacity of 2,200 units by the end of 2001. Anritsu says it plans to triple output capacity of semiconductor laser parts for fiber-optic communications equipment by fiscal year 2003. The company, which currently turns out 10,000 units a month, aims to meet rising demand from networking manufacturers for WDM systems. Matsushita Reduces Gate Leakage in GaN Devices Matsushita (Kyoto, Japan) has developed a wafer insulating technology for GaN that reduces the gate leakage current by a factor of one hundred compared to the level attained when separating devices by dry etching. The technology allows a selected area on a wafer surface to be heated to 900C in an oxygen atmosphere. This creates an oxidized 6-m-thick insulating layer between devices, and results in a leakage current between the devices of only 65 pAsix orders of magnitude smaller than the level of conventional systems when a voltage of 30 V is applied. At 400 V, the leakage current reaches just 1 A. The technology will pave the way for the development of small, high-output cell phone base station PAs, says Matsushita. PlayStation 2 Ships 11 million Units Sony s new PlayStation 2 gaming console shipped 4 million units in Japan in 2000, and cumulative global sales are expected to reach 11 million units by the end of March. The console features a DVD player, meaning that PlayStation 2 has made a significant contribution to the DVD laser market. The original PlayStation, which shipped 76 million units worldwide, was a CD-ROM-based system. Another interesting feature of the PlayStation 2 is that it features nitride-based LED indicator lights manufactured by Cree. Japan Aviation s Touch Panel Halves LED Requirements Japan Aviation Electronics Industry of Tokyo has developed an LED touch panel that requires half the usual number of LEDs and photodetectors. This development leads to simplified drive circuitry and makes the panel more compact, in addition to reducing the manufacturing costs by about 30%. In a typical optical-based touch panel, LEDs are located all around the periphery of the panel, with photodetectors placed directly opposite each LED. When a finger touches the panel, light is blocked from a particular LED, and this information is used to determine its position on the screen. With the new design, a reflective plate is placed opposite the LEDs to bounce the light back to the photodetectors, which are located on either side of each LED. This setup requires only half the number of optical devices, which only need to be located on two sides of the panel, instead of all four. So far the company has used the technology to develop a reflective optical touch panel with a screen size equal to a 6.5 inch LCD, and has plans to market the device for car navigation systems. Northrop Grumman to Acquire Litton Industries Northrop Grumman will acquire Litton Industries in a transaction valued at approximately $5.1 billion. Litton is a leading supplier of advanced electronics and information systems, and is the premier designer and builder of non-nuclear surface warships. Northrop Grumman provides systems integration, information technology and defense electronicsthe two companies each employ in the region of 40,000 staff. Northrop Grumman operates a GaAs foundry activity at its Advanced Technology Center in Baltimore, MD and has also developed SiC microwave devices for radar systems. Litton s Airtron subsidiary is a leading supplier of semi-insulating GaAs substrates and also supplies SiC wafers. However, we don t believe that compound semiconductor-related activities were a major factor in the acquisition.