(FORTUNE Magazine) – ONCE IN A WHILE, a material comes along that's made to order to meet the needs of a new generation of technology. Silicon, an excellent conductor of electrons when properly processed, has powered the 20th-century revolution in microelectronics by making possible data-processing chips that shuttle electrons around in billionths of a second. Because it's even more sensitive to light than photographic film, silicon has also contributed to advances in optoelectronics, the application of light to information processing -- replacing bulky cathode-ray tubes in TV cameras, for example. Solar cells of silicon are commonplace today, too, as power sources in pocket calculators, atop houses, and on the unfolded arms of spacecraft probing the solar system. Now this familiar workhorse of electronics is being nudged by an even better, more versatile material: gallium arsenide. Proclaimed for about 25 years as a key to the future of microelectronic technology and already in limited use in such devices as satellite dish antennas and radar detectors, gallium arsenide finally seems ready to step into the big time in data processing and to enlarge enormously its hold on optoelectronics. Nobody expects gallium arsenide to replace silicon across the board. For one thing, it's too expensive: silicon, found in ordinary sand, is the second most abundant element in the earth's crust after oxygen, while gallium makes up less than 0.01% of it. (Gallium turns up most commonly as a byproduct of aluminum making; arsenic, well known as a poison, is either mined or extracted as a byproduct of lead or copper refining.) Gallium arsenide is emerging not as a substitute for silicon but as an important complement to it. This remarkable material has a battery of useful qualities: It moves electrons around three to six times faster than silicon. It emits light -- something silicon can't do. It absorbs sunlight more efficiently than silicon, making possible better solar cells. It has a higher resistance to radiation than silicon -- important for space satellites, which are exposed to damaging particles such as electrons from the sun. It can operate at much higher temperatures than silicon, reducing the cooling requirements for computers and other electronic systems.

It uses less power than silicon. It can combine the processing of both light and electronic data on a single chip. Scientists and engineers have long known about gallium arsenide's unique properties, but only in the past year or so have they been able to capitalize on them in a big way. Horrendous barriers to making gallium arsenide of sufficiently high quality stood between the designers' desire to use its extraordinary speed and their ability to make data-processing chips with it. Now many of those problems are being overcome, and gallium arsenide is leaping from the high-tech doghouse to the high-tech penthouse. Gallium arsenide integrated circuits, or chips, first became available on the open market last year, and many analysts in the industry think billion-dollar-a-year markets are in the making. Most forecasters see gallium arsenide chip sales soaring from about $30 million this year to at least $1 billion in 1990. By the end of the century, gallium arsenide could account for one-third of the semiconductor industry's business -- which is expected to spiral by then from last year's $15 billion to an astounding $150 billion annually. Despite the relatively poor quality of gallium arsenide in the past, it's been used for about a decade to make so-called discrete, or singly packaged, components such as transistors, and small circuits designed specifically for signal processing in high-frequency microwave radio, radar, satellite communications, and related areas -- wherever silicon bumps into its speed limit. Silicon simply can't process very high frequencies, which makes the costly and difficult gallium arsenide alternative worthwhile. These specialized applications of gallium arsenide amount to about $150 million a year. What was needed to take gallium arsenide into the mainstream of electronics was better integration of individual components on chips, making them dense enough so that gallium arsenide's speed advantage wouldn't be offset by the length of time it took electrons to travel long distances between individual transistors. Higher-density gallium arsenide chips are becoming a reality. They are expected to launch a quantum leap into a new, more advanced age of electronics, making possible products that will far overshadow earlier uses of gallium arsenide. The military is the biggest consumer of gallium arsenide, and it's likely to remain so. Already, for example, gallium arsenide components aboard military aircraft can receive a hostile radar signal, distort it, and send it back so that the airplane seems to be somewhere else -- all thanks to that remarkable processing speed. If the Star Wars program goes ahead, military spacecraft will almost certainly be controlled by compact gallium arsenide computers, now under development, and powered by efficient gallium arsenide solar cells. A Hughes Aircraft subsidiary has just started large-scale fabrication of such cells near Los Angeles. They're unlikely to be available soon for commercial use because of their high cost, but other nonmilitary applications of gallium arsenide in computers, communications, and instrumentation are expected to grow rapidly. THINGS STARTED TO TILT gallium arsenide's way in high-speed-chip data processing last year when two new California companies -- GigaBit Logic of Newbury Park and Harris Microwave Semiconductor of Milpitas -- introduced the first small logic circuits made of gallium arsenide into the open market. To be sure, such big vertically integrated companies as Hewlett-Packard in the U.S. and Fujitsu in Japan had been making experimental circuits for their own use, but not selling them to anyone else. Now designers at dozens of companies without their own gallium arsenide supplies could buy the chips and start designing them into their own systems. GigaBit Logic has already signed up 200 customers, ranging from supercomputer maker Cray Research Inc. (FORTUNE, March 18) to builders of smaller computers, instrument producers, mainframe computer manufacturers, and telecommunications firms. The first systems incorporating gallium arsenide chips are beginning to trickle in. Hewlett-Packard, for one, has just introduced a microwave frequency sampling instrument with such a chip; the instrument, used in building radio and radar transmitters, makes possible measurements at higher frequencies. The initial computers and other data-processing systems with gallium arsenide chips will probably start showing up in about two years. By then engineers should have supercomputer power on their desks in packages the size of today's tabletop work station terminals. Cray has set 1987 as the introduction date for its supercomputer based on gallium arsenide components. Since speed is to electronics what money is to Wall Street, gallium arsenide should make possible not only supercomputers with capabilities undreamed of today, but also Dick Tracy-style wristwatch radio-telephones that would receive and transmit signals via orbiting satellites. Gallium arsenide chips will be absolutely essential to the success of direct-broadcast satellites that beam TV programs to small rooftop dish antennas. Again, silicon simply can't process signals fast enough. Gallium arsenide chips should also bring down the price of a cellular car telephone, and they're at the heart of a collision-warning radar system now being developed for passenger cars. Smarter and faster robots, better medical instruments, quicker processing of seismic data, navigation systems that will use satellites to pinpoint positions of ships and airplanes -- all these will be made possible by gallium arsenide. A gallium arsenide wafer for making chips costs about $200, compared with $10 for a silicon wafer. Because gallium arsenide is so expensive, at the outset computers won't be built completely out of it -- only the critical portions of their central processors and memories, to take maximum advantage of the material's exceptional speed. The transition to gallium arsenide will be gradual for still another reason: the state of development of chips made from it lags behind silicon by at least a decade. The highest-density silicon chips already hold several million microminiaturized transistors and related components in a sliver not much bigger than a baby's fingernail. So far gallium arsenide designers can squeeze only thousands or at best tens of thousands of components on a chip that size. Specialists predict, however, that gallium arsenide chipmaking will improve faster than silicon did, partly because gallium arsenide chip producers can conveniently borrow a lot of manufacturing equipment from their silicon counterparts. In optoelectronics, by contrast, gallium arsenide and related compounds quickly grabbed most of the $400-million-a-year market because silicon couldn't even begin to compete with it as a light emitter. The relatively poor quality of the starting material wasn't a problem in making solid-state lasers and light-emitting diodes. Those lasers are only about the size of a grain of salt, so even an imperfect slab of gallium arsenide contains a lot of good ones. The tiny lasers pump light pulses through hair-thin glass fibers at dizzying billions-a-second rates to transmit voices, data, and video signals in the familiar binary ''yes-no'' language of data processing. More recently gallium arsenide lasers have found their way into such consumer products as digital audio disk players and laser disk data-recording systems, which use the tiny lasers to inscribe and read information. Light-emitting diodes are widely used in small readout screens in VCR time displays, computers, and a variety of instruments. In the near future, the combination of gallium arsenide's optical and electronic properties will be exploited in novel ways. Already Honeywell and others have made prototype integrated circuits that combine tiny lasers with signal-processing elements -- both made of gallium arsenide -- on a single ! chip. Attached to glass fibers, these circuits will use ephemeral packets of light, or photons, to transmit both speech and data -- a faster and easier way than pushing around bulkier electrons. With the use of fiber optics spreading rapidly in both long- and short-distance communications, the upshot will be substantially reduced costs. Eventually this kind of circuit will make computing with light a reality. ENTICED BY the possibilities of this new material, companies big and small around the U.S. have started a spectacular building boom in gallium arsenide chipmaking facilities. Privately held GigaBit Logic, the first venture capital-backed company set up expressly to make gallium arsenide chips, will double its production capacity by next year. Fifteen miles up the California coast on Highway 101, at Vitesse Electronics Corp. in Camarillo, huge tractor- trailers are disgorging production equipment into the company's brand-new buildings; Vitesse raised $30 million from Norton Corp., a Worcester, Massachusetts, conglomerate, to build gallium arsenide chips and computers. Expansion of gallium arsenide facilities is also under way at such Los Angeles area defense contractors as Rockwell International and Hughes. Even in Silicon Valley, the enemy stronghold, new gallium arsenide companies are beginning to appear, and five-year-old Harris Microwave Semiconductor is expanding. In Beaverton, Oregon, the instrument maker Tektronix has just elevated its fast-growing gallium arsenide chipmaking operation to the status of a subsidiary, called TriQuint Semiconductor. Ford Microelectronics Inc., wholly owned by the carmaker, completed a $33-million gallium arsenide chip mill in Colorado Springs earlier this year. Honeywell starts production in July at a new facility in Richardson, Texas. In New Jersey, small start-up companies -- among them Pivot III-V, Anadigics, and Lytel -- have lately sprung up near AT&T's Bell Labs, a pioneering center in gallium arsenide research, forming the nucleus of a nascent Gallium Gulch. Similarly, the boom is on in the Boston area: the electronics conglomerate M/A-Com Inc. is putting finishing touches on the country's largest gallium arsenide fabricating facility in Lowell, and Raytheon plans to expand its gallium arsenide chipmaking. One conservative estimate puts at $120 million the amount that has been invested in gallium arsenide facilities and new company start-ups in the past six months alone. ''Never before has this level of interest and momentum accompanied a new technological direction,'' says a report by Strategic Inc., a Cupertino, California, research firm that specializes in electronics. Since silicon is almost certain to remain the dominant material, silicon chipmakers profess unconcern about the rush into gallium arsenide. Of the ten top silicon chip sellers, according to a recent report by the New York City- based market research firm Frost & Sullivan, only three -- Texas Instruments, Motorola, and RCA -- are involved in gallium arsenide digital chip development, probably because they are defense contractors. About the only silicon chipmaker to go into gallium arsenide in a big way is Harris Corp., which acquired the start-up now known as Harris Microwave Semiconductor. Silicon chipmakers are preoccupied these days with staying afloat in the worst recession yet to hit their industry, caused partly by a brutal shakeout in the personal computer business. Even innovators in one technology can become myopic about advances in another, however. ''Gallium arsenide will surprise a lot of people,'' says Richard C. Eden, senior vice president for research and development at GigaBit Logic. SOME OF THE SURPRISES will be coming from Japan. In keeping with their excellence in materials processing, the Japanese have led in improving the quality of gallium arsenide, to the point that they are now the dominant world suppliers. Japanese researchers have surged ahead -- at least in the lab -- in making complex gallium arsenide memory chips. Last year Nippon Telegraph & Telephone built an experimental 16K (16,384-cell) random access memory (RAM) chip, while U.S. researchers have so far made only a 1K (1,024-cell) chip. Random access memory chips allow immediate deposit or retrieval of data in any of their cells, much as any telephone can be dialed in a telephone network; such chips form the main memories of big computers. The Japanese appear somewhat behind the U.S., however, in building out of gallium arsenide complex logic, or arithmetic-processing, chips, which are more difficult to design. The Japanese, says Ted Wakayama, Japanese-born analyst for Strategic Inc., have made successful development of gallium arsenide a matter of national pride: they are eager to show the world that they can succeed in pioneering a new technology. Approaching development of gallium arsenide as a national program, the Japanese see the material as their long-sought wedge to capture control of the world computer markets. With government financing, Japanese giants such as Fujitsu, Hitachi, and NEC are all rushing development of gallium arsenide computer components. Says Takahiko Misugi, director of Fujitsu Laboratories Ltd.: ''Gallium arsenide's hour has come.'' But if the Japanese had hoped to surprise their U.S. competitors with a sudden flood of gallium arsenide computers, the great American drive into gallium arsenide will come as a shock to the Japanese. Big U.S. systems companies such as IBM, Hewlett-Packard, ITT, and GE all have large efforts in progress. IBM Vice President John A. Armstrong, who directs the company's semiconductor research, describes work on gallium arsenide as ''the largest alternative technology (program) at IBM.'' What makes gallium arsenide such a marvel of a material for both electronics and optoelectronics? Chemically speaking, it's the nature of its atomic and crystalline structure and the spacing between its atoms. Gallium arsenide provides electrons a fast track -- and emits light when a current of a specific frequency is passed through it -- because of the unique energy levels in the orbits of electrons that surround its atomic nuclei. When an electron in gallium arsenide is made to jump from a higher energy band to a lower one, the electron emits a photon of light. Electrons can move rapidly through the material because of its highly symmetrical crystalline lattice and because of those unique energy levels. When the age of microelectronics began in the 1950s, scientists started experimenting with various compounds as the raw material for chips. Gallium arsenide turned out to be a hit, but producing it in commercially usable form took some doing. Unlike silicon, gallium arsenide doesn't occur in nature. Silicon is a nicely homogenous element with highly ordered crystals, and it's easily purified. Not so gallium arsenide. Both gallium and arsenic contain impurities that are difficult to eliminate and that distort the electronic properties of the material that results when they are combined. Moreover, putting gallium and arsenide together in just the right way, matching them atom for alternating atom throughout the structure, turned out to be a hellish task. For one thing, during processing at high temperature arsenic turns into a poisonous vapor. To confine it, technicians mix gallium with arsenic in a sealed flask (see photograph). The slabs of material produced that way weren't of high enough quality for chips, though they were adequate for single transistors, those tiny lasers, , and light-emitting diodes. To make chips, engineers not only needed higher- quality gallium arsenide, they needed it in the form of round wafers. In the manufacture of silicon chips, such wafers are sliced from big ingots of silicon made in special furnaces. In this process, high-purity silicon is melted in a quartz crucible. A seed crystal about the size and shape of a pencil is then lowered into the molten silicon and slowly pulled and rotated to form a single larger crystal with perfectly positioned atoms. ADAPTING the silicon crystal-pulling machines to the making of gallium arsenide crystals met with only partial success. At best, the gallium arsenide workers could produce crystals only one inch in diameter. The economics of making semiconductors -- silicon or gallium arsenide -- depends in part on the size of the wafers sliced from the crystals, because the more usable chips that can be manufactured on a single wafer, the higher the ''yield,'' as semiconductor people call it, and the higher the profit. At a minimum, the gallium arsenide developers needed a wafer three inches in diameter. They finally got that in 1979 when Cambridge Instruments, a British company, developed crystal pullers specifically for gallium arsenide. By that time Fred A. Blum, Richard C. Eden, and co-workers at Rockwell International were well on their way toward building up denser and denser gallium arsenide logic chips. Unable to persuade their employer to go into commercial production with the chips, Blum and Eden quit. They started GigaBit Logic in 1982 after raising $30 million from several sources, including Standard Oil of Indiana and Analog Devices Inc., a Norwood, Massachusetts, maker of electronic components. GigaBit will probably sell at least $15 million worth of gallium arsenide chips this year. The fact that IBM had dropped research in a competing technology and begun a big effort in gallium arsenide gave the whole field the equivalent of a Vatican blessing. Because gallium arsenide is a man-made material, the first such substance to be used for electronics and optoelectronics, it can be altered to meet specific requirements by adjusting those energy band gaps -- to make tiny lasers that operate at different wavelengths, for example. Even this remarkable material may soon have some competition, however. Scientists are already looking at other synthetic materials that are even faster, including one called indium phosphide.

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