The 25-year history with South Korean multinational SK Group has paid off again for the US state of Georgia. Its subsidiary, SKC Inc, has announced plans for a new plant to manufacture glass-based substrates for semiconductors using technology developed at the Georgia Institute of Technology.

The new 12,000 square metre facility will be built on SKC’s existing campus in Covington, with planned completion in 2023 — although this could be expanded to 72,000 square meters by 2025. SKC will make an initial investment of $80m, including $70m for technology. The potential additional investment to be phased in by the company and its business partners would bring the total to $473m, according to Georgia officials.

Georgian glass

SKC was the first South Korean company to establish a plant in Georgia, and its long association with the state helped in 2020 when its sister company SK Innovation was embroiled in a bitter dispute over misappropriated trade secrets that nearly forced a halt to construction of its $2.6bn lithium-ion battery plant in north Georgia. State officials leapt into action to back SKI, while Georgia’s newly elected US senator helped negotiate a legal settlement that saved the plant.

However, officials say it was not sentiment but the fact that its new product is based on innovative research at Georgia Tech that led SKC to locate its new plant nearby. It is not a coincidence that SKC’s director of business development, Sung Jin Kim, formerly served as a research professor in Georgia Tech’s renowned 3D Systems Packaging Research Center, where he helped develop the glass substrate technology.

These substrates form the base on which chips are connected to each other explains Madhavan Swaminathan, a professor in Georgia Tech’s school of electrical and computer engineering and director of its packaging research centre. SKC is betting that its new product will overcome problems linked to silicon substrates widely used for high-performance applications. 

In contrast, Mr Swaminathan says: “The glass substrate engineered at Georgia Tech is insulating, so you can get more performance and the size of the glass can be very large – 700mm on a side or more. You can work with larger substrates and connect more chips to each other, and thereby reduce costs.”

No other company is currently using the glass substrate in a real product, says Santosh Kumar, Singapore-based senior director at Yole Développement, a French multinational that provides technology analysis and consulting. He estimates the market for the glass substrate at about $1.5bn to $2bn per year. However, as his colleague Emilie Jolivet adds, it will take years before it completely replaces silicon.

Validation

For the state of Georgia, SKC’s announcement was not just another FDI win. It was also a further validation of its strategy of fostering cutting-edge research at its leading universities to attract investment and launch new companies through the Georgia Research Alliance (GRA). 

Launched in 1990 as a public–private partnership, the GRA has since invested $670m of state funds and generated more than $7bn in direct returns from federal and private investment, says spokesperson Amanda Schroeder. The state provides funding for investment in university-based research and lab equipment, while GRA’s operations are funded entirely through private donations from individuals, companies and foundations.

The foundation of GRA’s success is its Eminent Scholars programme, which searches out the world’s top scientists in key disciplines and initiates a careful campaign to recruit them and their research teams to a Georgian university. The process can take several years, Ms Schroeder notes. For each scholar, the GRA sets up a university endowment of $750,000 that the institution matches. Many scholars bring with them significant federal and private research funding.

Georgia Tech’s Packaging Research Center was launched with the appointment of Eminent Scholar Rao Tummala in 1993, as well as $4m in lab infrastructure. The Center also receives support from an international consortium of 41 companies and institutions. It has won more than $100m in research grants, most from industry partners, and spun off seven start-up companies, according to GRA. 

Mr Swaminathan foresees the growth of related start-ups in both manufacturing and software. Indeed, spin-off development is another key goal of GRA, which offers phased seed funding and, if companies qualify, venture capital funding from the public–private GRA Venture Fund, which now has 17 companies in its portfolio. 

The GRA-funded Emory Vaccine Center at Emory University in Atlanta, led by Eminent Scholar Rafi Ahmed, is another success story. It proved vital in testing all three Covid-19 vaccines now used in the US — Pfizer, Moderna and Johnson & Johnson. Other contributions have been made by some 70 eminent scholars in fields ranging from biosciences, medicine, artificial intelligence and electro-optical systems to education and business process innovation.

As for SKC, while the glass substrate can be applied to almost all semiconductor applications, the company’s priority markets will be high-performance computing and high-end communication applications, Mr Kim tells fDi.

While Georgia Tech undertook the fundamental research to develop the substrate, supported by the industry consortium of which SKC is a member, Mr Kim says SKC worked with partners to research and develop the product technology to commercialise it. “We have unique solutions with our own intellectual property. Our technology is very different from what Georgia Tech developed,” he notes, adding that SKC will continue to work with the university on further technology enhancement in future.

“Georgia can be a hub for high-end packaging solutions for heterogeneous integration needs from the industries,” he says.

Follow-on investment related to semiconductors is certainly the hope of Pat Wilson, Georgia’s Commissioner of Economic Development. “We are actively recruiting companies in this field,” he says. “We would love to have a semiconductor industry here, especially related to electric vehicles.” 

State officials have not disclosed the incentives offered SKC, though they are likely to be significant. The state is also making available its QuickStart programme to provide job training tailored to the company’s needs, Mr Wilson says.

Whether many foreign suppliers will follow SKC to Georgia is disputed. Mr Kumar questions whether a substrate factory on its own will attract many, unless it also includes a semiconductor assembly facility. However, Mr Swaminathan believes the complex substrate supply chain is likely to attract FDI. “It is almost a necessity that you are able to bring in the right companies to provide materials and tools, with many residing outside the US,” he says.

This article was first published in the December 2021/January 2022 edition of fDi Intelligence magazine.