Locating R&D close to manufacturing will keep Ireland the ‘Silicon Valley of Europe’

28 Jan 2010

R&D, hi-tech manufacturing, multinationals and Irish start-ups need closer ties right now.

In the aftermath of the dotcom bust of nearly a decade ago and as the poison chalice of property began to be consumed by the mouthful, there was a saying around this country that manufacturing was dead. This wasn’t strictly true: only a certain kind of manufacturing had moved on – the cheap and easy kind that can be replicated anywhere.

What few Irish citizens realise is that the activities of companies located here such as Wyeth, Boston Scientific and Intel are not possible anywhere else on the planet. The problem is how do we ensure that manufacturing is not a multinational-oriented activity only, so that Irish indigenous manufacturers can be among the most advanced in the world?

We are already away on a hack in some respects. In the west of Ireland, close to 30,000 people are employed in a growing medical devices cluster estimated to be the second largest of its kind on the planet.

Ireland and foreign direct investment

IDA Ireland chief executive Barry O’Leary made the point at a nanotechnology event held before Christmas that while globally foreign direct investment (FDI) is down 30pc, Ireland is still punching above its weight.

Intel Ireland general manager Jim O’Hara also said that the country has captured more FDI to date than all of the Brazil, Russia, India and China (BRIC) nations combined.

O’Leary said that manufacturing continues to be a major factor in Ireland and that the co-location of R&D and manufacturing is a key trend.

To get a feeling for how advanced manufacturing really works, the factory manager for Intel’s Fab 24 plant in Leixlip, Philip Moynagh, is an 18-year veteran of the chip giant and came to Ireland two years ago after starting a chip fabrication plant in Arizona. Fab 24, which opened in 2006 following a $2-billion investment, became the first chip factory in Europe to manufacture chips using the 65-nanometre process.

Moynagh points out that the link between product development is integral and non-stop. The challenge at Intel is to keep up with Moore’s Law so that the number of transistors on a chip will double every two years.

Engineering at such a level, he believes, requires discipline and constant rotation. Intel workers developing chips that will be introduced two years from now are already hard at work perfecting the product’s design, travelling to the US every two years to develop the product and ready it for manufacturing in Ireland.

Moynagh says he left the European R&D culture of the Nineties to join Intel and found it a culture shock.

“My first meeting was in Portland and the local Fab manager who had a God-like status came into the room, took a look around, decided there were too many people and got rid of anybody who didn’t need to be there.  All the guys outside the door were devastated, but I was cock-a-hoop. It summarised in my mind what was wrong with the European collective approach to R&D. It was a huge collection of bottlenecks and every time an idea was a success it had a thousand fathers.

“This experience crystallised in my mind the Intel approach to manufacturing – the ‘All and Only’ approach to clarity of accountability. In Europe, nobody was responsible for anything. At Intel, you were responsible for something and you either got it done or you didn’t. This impacts how Intel’s R&D and manufacturing works. Don’t fix stuff because it’s interesting. Fix it because it matters.

“Another policy that drives development and manufacturing is a policy of not only risk-taking but also ‘Disagree and Commit’. I make tonnes of bad decisions, but ultimately try to come up with the right decision. I can’t do that on my own, however, so if I need to accomplish a task I call, for example, the three people I need to get it done and start with a problem statement or opportunity statement. Everybody in that room, no matter who is junior or senior, can disagree until we come up with a solution and then all of us commit to the final decision,” he says.

Manufacturing on a nano and sub-atomic scale

The challenge of manufacturing at the nano- or sub-atomic scale is inconceivable to the human mind. The original Pentium processor that ignited the PC revolution and the internet revolution of the Nineties had only 3.1 million transistors compared with today’s Atom processor, which has 50 million transistors, or the code-named Tukwila processor for servers, which has more than 2 billion transistors.

To get a feel for the intensity of manufacturing below 65 nanometres, a typical 300-mm wafer manufactured in Leixlip contains enough copper to stretch from Leixlip to Paris.

Moynagh believes principles such as Disagree and Commit could be central to helping advanced manufacturing organisations based locally to become export success stories, but argues that the clarity of accountability they encourage could also be good for Ireland Inc.

“In order for us to keep up with Moore’s Law, it involves a very tight linkage between the development of a product and manufacturing. Every two years the people responsible for making the next chip families spend eight months at our design labs in Portland, but once they are back in Ireland they are constantly making hundreds of thousands of improvements.”

HP vice-president and managing director Lionel Alexander, who has just been appointed president of the American Chamber of Commerce, which represents the US firms that employ 100,000 people here, agrees.

“We need to talk about manufacturing in the same breath as we do R&D. If Ireland wants to stay relevant, we need to continue to retain manufacturing here, innovate, improve our IT capabilities and put it all back into R&D processes,” says Alexander.

“People think it’s all about creating new technology and patents – it is to a large degree – but it is also about spotting the perfect moment of convergence between types of technology.”

Companies need to network

In Silicon Valley, he says that all the large companies and small start-ups talk to each other and network and this needs to happen more in Ireland.

“In California, Microsoft would talk to HP and Intel and even companies that compete aggressively would collaborate on products. They need to.

“We have a representative of almost every Silicon Valley company here in Ireland, no one else has that. Irish indigenous firms need to make sure they have the leadership and skills to work with FDI companies,” Alexander concludes.

“That kind of engagement isn’t happening and needs to. It is also up to the multinationals themselves to create new business models that attract local companies to collaborate. Success in technology is often about spotting the convergence of existing technologies as well as inventing technology.”

By John Kennedy

Photo: Greater integration between R&D and manufacturing, as well as collaboration between SMEs and multinationals, is critical. Pictured are Barry O’Leary, CEO, IDA Ireland; Philip Moynagh, Fab 24 plant manager, Intel; and Lionel Alexander of HP, the new president of the American Chamber of Commerce

www.digital21.ieDigital 21 is a campaign to highlight the imperative of creating an action programme to secure the digital infrastructure and services upon which the success of the economy depends.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years