Next week at an industry trade show in San Francisco, Novati Technologies will meet with prospective customers to explain why the work it does in its aging chip research plant in Southeast Austin is vital to their cutting-edge needs.
Novati is a new company in an old location. It occupies the former clean room research center created by the Sematech consortium when it arrived in Austin in 1988. Sematech has since moved almost all of its operations to Albany, N.Y., but Novati remains as an advanced semiconductor development outpost on at otherwise deserted Sematech campus at 2706 Montopolis Drive.
The plant is the survivor of a near-death experience last fall. SVTC Technologies, a California company that bought the Austin plant from Sematech in 2008, decided to shut down its operations both in California and Texas last September. It laid off more than 100 workers in Austin and told its several dozen customers of the Austin fab that that they would have to go elsewhere to get their development and production work done.
One of those customers, Illinois-based Tezzaron Semiconductor, decided to do something about it. It arranged to buy SVTC’s clean-room equipment assets and to keep the fab open.
The reason, Tezzaron founder and chief technology officer Bob Patti said, was that the Austin fab was nearly irreplaceable. It had the technology Tezzaron needed to do the advanced development and manufacturing work for a defense-related product line that it expects to expand over time.
“The facility is unique,” Patti said. “We couldn’t afford to lose access to such a valuable resource.”
Tezzaron needed part of the Austin fab, but not all of it. It wanted the fab to continue to work with a range of established and startup companies to help defray the plant’s operating costs.
The new owners chose a new name for the fab, Novati, and retained longtime fab director Dave Anderson as president of the new subsidiary. Since then, Anderson has restored the fab’s normal operations, returned the business to break-even and now he is embarking on a marketing effort to bring in more customers to supplement several dozen that it now has.
One of its existing customers, NanoMedical Systems, an Austin-based medical device startup, says the changes under new ownership have been for the better. Novati is more attuned to the needs of startups, said NanoMedical CEO Randy Goodall.
Goodall’s company is building prototypes of implantable devices that are expected to control the precise release of medicine into the body. Doing that requires a silicon chip with 1 million or so extremely small holes in it. Creating such as “nanofluidic chip’ is what the startup does inside an advanced clean room development center.
“What we are working on requires the capabilities of a company like Novati,” said Goodall, who formerly worked for Sematech. “We looked at all the R&D places out there in the country and none of them can do what Novati can do. They are really a unique capability.”
Last fall, when it looked like the Austin fab might close, Goodall’s company made a rapid search for alternative locations.
“The fact is there isn’t really another place like Novati,” he said. “It could have gone away. The right people at the right moment said ‘This can’t go away’ and they pulled it off.”
Goodall estimates there are hundreds of small startups that could benefit from working with Novati to speed their product development. Many of them, he said, are unaware that Novati is a potential resource that is willing to work with startups.
Tezzaron’s Patti said his company expects to expand its own production at the Austin fab and to help expand its production output, “but we will certainly not fill the fab’s capacity.”
“We will encourage Novati to continue to develop and expand their customer base because a wide customer base created a healthy environment for innovation.”
Part of the Anderson’s challenge in marketing his fab is that many existing customers are extremely reluctant to tell anyone they are doing work there.
“Many of our customers are in stealth mode and they view us as a competitive advantage,” Anderson said, “So they are reluctant to tell people they are here.”
The fab is good at staying discreet about its customer ties and what they are doing there. It has had years of experience in developing the rules and procedures it needs to keep its customers’ technology work separate and protected from prying eyes.
Novati works in a experienced fab, but it is still capable of pulling off cutting-edge work. Part of its advantage, Anderson said, is its ability to work with far more materials than most semiconductor factories use. It says it can work with a world-leading 60 elements from the period table, while most chip foundries limit customers to working with no more than 25. The ability to work with more materials, means more kinds of products can be developed there.
“Today’s rapidly emerging electronic products are driven by the integration of materials,” Anderson said. “That is where Novati excels.”
Some of those products have included an inexpensive DNA sequencing device that was used in solving a deadly E. coli outbreak and a new technology used in created an elastic auto-focus and auto-zoom lens for cell phone cameras. It also contributed to new devices that quadrupled the lifetime of complex night-vision sensors.
One of the uncertainties remaining for Novati is the property it sits on. The company leases space from Sematech, which leases the property from the University of Texas. The Sematech lease expires in 2015 and is unlikely to be renewed.
Novati has begun talking with UT officials about directly leasing the plant property from the university. In return, the company is interested in forging tighter research ties with UT and with the new medical school that it intends to build in Austin.
“It is a really valuable asset and a relationship that could be a great boom to our economic development story,” said Austin lawyer Pike Powers, who is a member of the company’s board of directors.