Motorola Inc’s investment of some $150m to triple the production capacity at its semiconductor factory in Toulouse, France (CI No 2,552) is an attempt to overtake the explosion in demand for cellular telephones, says Les Echos. The factory, which employs 2,000 people and exports 70% of its production, is Motorola’s main European centre for the development and manufacture of communications integrated circuits and high-frequency components. The extension, which will provide 200 new jobs, is aimed specifically at the production of ‘intelligent’ circuits for the telecommunication and automotive sectors. The first products from the unit under construction are expected in the third quarter next year with maximum capacity reached at the beginning of 1997. The investment is sorely needed: throughout 1994, cellular phone makers have had to contend with a shortage of components, particularly on the high-performance end of the spectrum, for items such as ASICs and signal processors for the Groupe Speciale Mobile market. Motorola’s main problem this year, according to sources at competing component and handset manufacturers and analysts, has been a shortage of its 56000 series of generic signal processors. Other manufacturers like Nokia Oy, who do not have in-house semiconductor manufacturing, have seen shortages of, in particular, ASICs, but even standard components as well. David Moorhouse, Dataquest Europe’s analyst for semiconductor applications said, Generally in the industry right now there is a supply-demand mismatch, particularly at the less-than-one-micron size, which includes the 56000 series. The mismatch is more severe in the high-performance end. Dirk Braune, vice-president of marketing for Zurich-based Philips Semiconductors’ telecommunications products group, said that, despite substantial double-digit growth in the semiconductor industry for the last couple of years, a fear of cyclical behaviour combined with the recession has kept investment low. As a result, supply has been tight all year, but some of the investments we’ve made this year are starting to come on line, so some areas getting better, he said. The Motorola investment is just one of many moves, both taken and planned by manufacturers that should ease the situation in the first quarter and first half of 1995. Braune notes that Philips Electronics NV, for instance, has an increase of about 50% planned for next year, with a substantial amount going to telecommunications. Motorola also said it had reached aggreement with one of the labs of France’s National Centre for Scientific Research to reinforce co-operation in the area of new semiconductor applications. Motorola, which already provides Groupe Speciale Mobile infrastructure equipment for General des Eaux SA’s communication division, SFR, and France Telecom, is also said to be negotiating with Bouygues SA, the operator recently named for France’s third cellular network.
