STATE-RPI TEAM HOPES FOR SEMICONDUCTOR BID.(Business)

Sometime in the next two weeks a team from New York may be asked to venture west and explain why a semiconductor-manufacturing consortium called Sematech should set up shop in North Greenbush.

Invitation is dependent on whether the New York-Rensselaer Polytechnic Institute proposal submitted June 30 is judged competitive by a Sematech search committee in Santa Clara, Calif. It is analyzing 50 site proposals from 32 other states.

"We have not yet heard anything formally from Sematech about the site-selection process," Matthew Maguire, director of RPI News Services, said Saturday. "But we have heard informally that our chances look good for receiving an invitation to discuss the New York state-RPI proposal in more detail with Sematech."

The prize in the competition is becoming the home to Sematech's research and manufacturing facility, which will inject $250 million a year over six years and about 800 workers into a community.

Competition for Sematech is fierce, and an example of how serious practicipants have taken it can be found in the New York-RPI proposal.

Besides the state and local financial incentives being offered, a growing consortium of major U.S. universities has joined RPI in support of locating Sematech at the Rensselaer Technology Park in North Greenbush. Initial participants in the consortium include Carnegie-Mellon University, Cornell University, Massachusetts Institute of Technology, Massachusetts Technology Corp., Rochester Institute of Technology, State University of New York, Syracuse University and University of Rochester.

Sematech, which stands for Semiconductor Manufacturing Technology, is a research consortium that was organized May 12 by the 41-member Semiconductor Industry Association, the U.S. semiconductor industry's chief trade group, to restore the United States' position of world leadership in semiconductor manufacturing.

Sematech's timetable calls for site selection by the end of the summer, initial operation by fall, a completed facility and production of chips by midsummer 1988 and "world-class manufacturing by 1993," using exclusively U.S. materials and equipment.

Analysts have said the consortium represents a major early step forward in the bid to fight mounting competition from the Japanese, who now control nearly half the world chip market and almost the entire market for D-RAM (dynamic random access memory) chips, which are used in all computers.

The consortium's members include the largest American chip manufacturers - Texas Instruments, Motorola, National Semiconductor, Rockwell International, Intel, AT&T and Advanced Micro Devices - as well as three large computer companies that make some of their own chips: IBM, Digital Equipment and Hewlett-Packard.

The semiconductor industry trade group plans to raise $1.5 billion over six years - $250 million each year with half from the industry and half from the government - to fund the consortium, which seeks to develop state-of-the-art semiconductor manufacturing technology that members could then use in their own operations.

But the project still faces a number of hurdles.

Sematech organizers still have to raise the money, and some companies may have trouble coming up with the funds because of the industry's slump, analysts have said. Organizers are shooting for September to line up funding commitments from companies, but none has stepped forward so far, an industry association spokesman said.

Government funding may also be a problem. Serveral bills are being considered in Congress to fund the type of work proposed for Sematech, with the Defense Department a likely source for the funds. But some Pentagon officials and others in Washington are leery about the consortium's cost and its uncertain benefits.

Despite these problems, scores of cities in states such as Massachusetts, Texas, New Mexico, Arizona, North Carolina and California are wooing Sematech. A downstate New York developer even submitted an independent proposal.

Some high-technology observers are saying Silicon Valley around San Jose, Calif., would be the favorite to attract the consortium.

San Jose's proposal was packaged with offers from San Diego and Sacramento by California and forwarded to the Sematech committee. California is willing to commit $25 million to woo Sematech, according the state's Office for Business Development.

Mel Phelps, securities analyst for the Hambrecht & Quist investment house, told the San Jose Mercury News the Bay Area's vast science and engineering resources could lift San Jose's application toward the top of the heap.

An American Electronics Association spokesman also told the paper that Silicon Valley's position as a semiconductor manufacturing center also should help its prospects.

North Carolina also has mounted a campaign that stands a good chance of attracting Sematech. Its proposal offers the Research Triangle Park near Raleigh-Durham, where the idea of an organization like Sematech was discussed during meetings sponsored by the Semiconductor Research Corp., a 36-company research cooperative based there.

And GTE Corp. has asked Sematech to consider buying its facility in Tempe, Ariz., for the consortium operations.

But RPI and New York officials haven't been dismayed by the competition.

At dawn Saturday, the New York state Legislature approved the Omnibus Economic Development Act of 1987, which contained about a $40 million interest-free, 30-year loan as an incentive to attract Sematech.

The Sematech proposals will be evaluated according to strict criteria. One of the primary requirements for the site will be an existing facility of about 100,000 to 200,000 square feet that has semiconductor manufacturing contamination-free or "clean room" capability.

Beyond the existing space, the site must have room to build a state-of-the- art facility on the same property, freedom from environmental problems and access to adequate utilities and service. Labor and supplies must be available at competitive costs.

The selected location must also have an attractive quality of life for the 700- plus professionals who will work there, as well as good transportation and ready access to one or more leading universities.

RPI officials feel the Capital Region is the hub of semiconductor component, equipment and system manufacturers in the Northeast.

Other Capital Region strengths cited in the proposal include: RPI's eight- year-old Center for Manufacturing Productivity, which is involved in manufacturing-process research; its Center for Integrated Electronics with state-of-the-art facilities and research programs in silicon and compound semiconductors; and its $60 million Center for Industrial Innovation, which is dedicated to the transfer of technology between government, industry and academe.

The New York-RPI proposal also offers Sematech the following:

*Physical facilities, including "clean rooms," that will meet Sematech's short- and long-term needs and an ability to allow rapid start-up and steady expansion beyond the existing facility at the technology park.

*Abundant, low-cost water, electrical and telecommunications resources.

*Transportation network that includes highways, airport, and rail.

*Well-trained and enthusiastic labor pool.

*High quality of life.

*Broad selection of affordable housing.

RPI also is hopeful that its close ties to industry will be an ace in the hole.

For years RPI has nurtured a close tie with industries, some of which are part of the Sematech consortium. The plan has elevated RPI to the No. 1 position in industrial funding of engineering-related research, according to the American Society of Engineering Educators.

Several industry representatives who attended a two-day Rensselaer Key Executive program meeting at RPI June 29 said the Troy university was looked upon by companies as a leader in a new industry-university alliance.

"RPI is in a strong position today because of what it started in the past, said Thomas R. Thomsen, president of AT&T and a member of RPI's board of trustees.

Thomsen said the new alliance is important to a consortium project like Sematech and the one created with University of Texas called Microelectronics & Computer Technology Corp.

But MCC of Austin, Texas, which was established in 1982 as a consortium to beat the Japanese at developing the next generation of advanced computers, has since run into trouble from bickering between consortium members.

Problems aside, if the Capital District is chosen as the Sematech site, it would be the "bonanza of the decade," according to Stanley Landgraf, interim president of RPI.