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Intel Warns Chip Shortage to Worsen if U.S. Bans Imports of Compound

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(Bloomberg) — Intel Corp. is railing against a proposed import ban on a key chipmaking ingredient, saying the move would worsen an already-perilous shortage of semiconductors.

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The company is trying to dissuade the U.S. International Trade Commission from halting imports of so-called chemical mechanical planarization slurries that are sold under the name Optiplane. DuPont’s Rohm & Haas unit makes the products in Taiwan and Japan, and they’ve drawn allegations that they infringe technology owned by Illinois-based CMC Materials Inc. The ITC was scheduled to announce its final decision later Thursday but postponed it until Dec. 16. It gave no reason for the one-week delay.

Intel, the world’s biggest chipmaker, has told the commission that “banning Optiplane slurries from U.S.-based semiconductor chip fabrication lines without a 24-month transition period could conflict with national security and economic interests.”

If the ban is approved, it could thrust an obscure legal battle into the spotlight. CMC’s Cabot Microelectronics sought the move, saying Optiplane was using Cabot’s “cutting-edge” technology for silica particles in a slurry for polishing the semiconductor layers. Cabot uses the composition for its iDiel family of slurries.

A trade judge in July said a component made overseas infringes Cabot’s patent and rejected DuPont’s argument that the patent is invalid.

Semiconductors, which provide the brains and storage of most devices that have on/off switches, are made in a complex process that involves putting layers of conductive and insulating materials on disks of silicon. Circuit patterns are then burned onto them.

That process, which takes months to complete, involves some layers that are only an atom thick and results in the cramming of billions of transistors onto postage-stamp-sized pieces of silicon.

The slurries are used at different steps in the manufacturing process and “subtle variations between them have outsized impacts in a fabrication environment,” Intel said.

The company looks to tap into concerns about the global shortage of semiconductors, which has hit a wide swath of the economy. The automotive industry alone is on course to lose more than $200 billion in sales because they can’t build enough vehicles to meet demand.

The ITC ban could hurt Intel more than some rivals because the Santa Clara, California-based company relies more heavily on U.S. facilities. Manufacturers with Asian factories wouldn’t be affected by the change.

But the ITC staff lawyers, which act as a third party in these cases on behalf of the public interest, have supported Intel’s call for a 24-month delay in any import ban.

That lag would “provide a sufficient period for Intel to transition to acceptable noninfringing alternatives, particularly if the commission finds there is a semiconductor chip shortage,” Thomas Chen, an investigative attorney with the agency, told the commission last month.

Cabot said Intel and DuPont are just using the chip shortage as an excuse to avoid an import ban.

“The reported ‘semiconductor shortage’ is a result of a complex set of economic factors and has nothing at all to do with the supply of CMP slurries, let alone the supply of the specific infringing products at issue in this investigation,” Cabot said in its own filing with the agency.

The case is In the Matter of Certain Mechanical Planarization Slurries, 337-1204, U.S. International Trade Commission (Washington)

(Updates with one-week delay in decision in second paragraph.)

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