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Fab motto: Yesterday's Technology Today

(10/23/1997)

Semiconductor plant in Tempe makes fresh parts for over-the-hill machines

by Stacy J. Willis
Arizona Business Gazette

Phoenix, Arizona - Semiconductor plant is equipped with "late 1980s technology." In the high-stakes world of cutting-edge technology, he may seem like a bit of an anachronism. But Lillard, president and chief executive officer of Tempe-based Lansdale Semiconductor Inc., has developed an entire business based on providing parts for machines that are little behind the technology curve. "It's just like my '56 Ford truck. In the 1960, no one would have believed there would be an aftermarket for it," Lillard said, " I believe passionately that the same applies for the integrated circuit market." Operating under that theory, Lansdale generated $6 million in revenue last year and is expected to bring in $8.9 million in 1997 by manufacturing integrated wafers for over-the-hill machines. About half of the product demand comes from the military, which needs components for older aircraft such as the F-14 Tomcat and F-15 Eagle. "The difference between the commercial life cycle and the military life cycle will always be there," he said. "I have a very nice niche there." Lansdale also manufactures components for telecommunication and computer products, and has had contracts with Intel Corp., Raytheon and other high-tech giants. The company was founded in 1964 in Lansdale, Pa. Lillard moved the business to Tempe in 1993 after buying used semiconductor clean-room equipment at an auction in Utah. "It's a bit like buying old car parts at the junkyard," he said. "It's pretty common in the semiconductor industry that when a company's wafer fab becomes outdated, they just sell it off." lightly used, slightly outdated equipment is a boon for the product lines he purchases, with exclusive rights, from original manufacturers. Take, for example, Lansdale's work on the Air Force's Airborne Warning and Control System airplane, the AWACS. For two years, Lansdale has been the exclusive aftermarket manufacturer of some of the radar-surveillance aircraft's computer components "The technology in the main computer is an old Motorola process," Lillard said. "That's the thing about my business. When I purchase the product line from Motorola, I have it all." nology companies invest heavily in new technologies, first-generation integrated circuits become obsolete unless a company such as Lansdale steps in to continue manufacturing the components. Added business security comes from the military's vested interest in keeping expensive airplanes functional, rather than trying to purchase new equipment. Some companies specialize in re-engineering for older technologies and others purchase excess inventories and resell them as need arises. "But we manufacture," he said. "Unlike a lot of high-tech companies that are all looking for the next widget, I'm concerned with discontinued widgets. We specialize in providing 'yesterday's technology today.'"


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