Virginia Should Take a Chip Off Calif. Work Force

Conference Attendees Take State's Livability

Wayne Nesbit, chief executive of White Oak Semiconductor, has visited computer-chip plants the world over.

At a factory in Indonesia, workers made $2 a day. In Taiwan, managers had cots so they could get up and work during the night. And in South Korea, the government showers money on the industry.

So how does White Oak - a 900,000-square-foot, 1,150-employee plant outside Richmond -pay high wages, abide by strict safety standards AND prosper amid such competitors?

Nesbit asked that question Thursday during the Virginia Semiconductor Conference, sponsored by the Hampton Roads Technology Council, at the Thomas Jefferson National Accelerator Facility.

"The answer is, it's our people," he said. "We're smarter, we're more creative, we work together better as individuals and as a team."

And making people want to come here is the biggest thing the state can do to help the industry.

"There's been a lot of talk of a shortage of high-tech workers. But let's let California be worried about a shortage of workers."

The partners behind White Oak, Motorola and Siemens chose Richmond because of its mild winters (allowing for year-round production) and the state's "right to work" stance (meaning weak labor unions). But, mainly, it's the area's livability.

The state government can do a lot to help White Oak succeed in Richmond and to jump-start another joint venture, Toshiba and IBM's Dominion Semiconductor, in Manassas: Build a strong transportation system, deregulate electrical utilities and provide a "dose of promotion."

The semiconductor industry uses materials, usually silicon, to make the tiny chips that are the brains of computers. They also run radios, televisions, cellular telephones, appliances and an increasing number of household components.

Despite that, however, the industry is in a "trough," said John Boidock, director of government relations at Texas Instruments and the company's representative to the Semiconductor Industry Association.

It's not slowing down because of slowing demand, though. In fact, the industry is selling many more semiconductors than in the past, mainly because Internet usage, growing at a rate of 20 percent a month, is igniting more demand for personal computers and electronics equipment.

Rather, worldwide revenues are dropping - from $137 billion in 1997 to a projected $135 billion in 1998 - because today's chips are cheaper and more powerful.

"People don't want to spend $2,500 for a computer anymore," Boidock said. "Those days are over. We're facing shrinking margins."

To continue making money, Boidock said, the industry association is looking to press other countries - especially China, with its enormous market - to sign free-trade agreements.