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David vs Goliath

(08/28/2004)

TEMPE, ARIZONA - A small Tempe-based semiconductor company is taking on the mighty United States Department of Defense over replacement electronic parts for jet fighters and other complex weapons. At issue is who should supply microcircuits to the armed services for use as replacements when the originals wear out.

Lansdale Semiconductor, 2412 W. Huntington Drive, specializes in buying the rights to military chips from original suppliers, such as Motorola, that no longer want to stay in the defense market because volumes are small. Lansdale and other aftermarket suppliers continue to produce exact copies of the chips so the Pentagon can keep its jets, missiles, radars and other high-tech hardware in top condition.
Lansdale president R. Dale Lillard said the Pentagon is taking business away from private industry and endangering the lives of military personnel by using an internal program to acquire components that mimic the originals but are not exact duplicates. Such integrated circuits could function in different ways from the originals because they are made with different tools and have different sizes. As a result, they could pose a hazard to pilots in combat situations where the equipment is under maximum stress, he said. He is demanding that the defense department acquire exact dup licates when companies such as Lansdale can supply them and stop competing against private industry.

"The basic issue is we believe someone is going to die," he said. "The longer this goes on, the more unpredictable these replacement parts will be."

Defense officials deny there are any problems or safety issues with the replacement parts, and they also deny the department is taking away business from private companies. They insist the internal program is limited to electronic parts that aren’t available from private sources or for some reason don’t meet the department’s requirements.

The dispute centers on the Generalized Emulation of Microcircuits, or GEM program at the U.S. Defense Supply Center in Columbus, Ohio. The program was founded more than 15 years ago to provide the armed services with replacement electronic parts that were no longer available from private industry. The Pentagon contracts with Sarnoff Corp. of Princeton, N.J. to produce equivalent integrated circuits.

Lillard claims the program has expanded over the years to include parts that are available from companies such as his. Although the GEM parts have not been responsible for any crashes, he said they are not the same as the originals in their form, fit and function.

"It’s like fitting a Chevrolet part into a Ford automobile," he said.

Lillard has enlisted the aid of the Semiconductor Industry Association and Texas Instruments and National Semiconductor, two other microchip suppliers in the military aftermarket. Doug Andrey, a spokesman for the industry association, said the group thought the issue had been resolved about five years ago, but it has risen again. "So far we have not gotten a satisfactory resolution," he said, adding that the association is "exploring other steps" to try to get the defense department to change its policy. He declined to elaborate.

GEM Program Manager David Robinson said the Pentagon has no plans to scale back the program, saying that would harm military readiness. He defended the performance of the Sarnoff-produced parts, saying that more than 45,000 emulated devices have been issued to the armed services without one verified system failure.

He conceded the issue of whether the GEM chips have the same form, fit and function of the originals could be open to interpretation. Such parts often had two or more original manufacturers whose versions of the parts were slightly different and also sometimes varied by production lot. Still, the GEM versions meet all the original specifications for the proper operation of the components, Robinson said.

"There are no safety issues with GEM," he said.

Sometimes the GEM program will provide chips available from private industry if they can’t be delivered quickly or for some other reason don’t meet the military’s requirements, said Tom Beckstedt, GEM equipment specialist.

Also the unit prices of the GEM parts are usually higher than those of the original or aftermarket manufacturers, which is one reason why the program is limited to parts that are no longer available from private industry, Robinson said. In the long run GEM saves money because it allows the military to continue operating weapon systems that otherwise would need expensive redesigns, he said.

"It would not be in the government’s interest to undercut our diminishing industrial base," Robinson said. "The decreasing industrial base is the very reason GEM was initiated. It (private industry) does not support all of DOD’s requirements."

In the past five years GEM has often declined to bid on parts and has referred customers to the semiconductor industry on 210 occasions, including 99 to Lansdale alone, he said.

For more information, contact R. Dale Lillard, President:
Lansdale Semiconductor, Inc.
2412 W. Huntington Dr.
Tempe, Az 85282
Telephone: 602-438-0123
Fax: 602-438-0138
Email: Lansdale@Lansdale.com
Home Page: http://www.lansdale.com

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