APPENDIX C. SITE REPORTS - UNITED STATES

Site: Eastman Kodak Co.
Elmgrove Road Facility
Rochester, NY 14653

Date Visited: September 19, 1994

Report Author: G. Holdridge (assisted by D. Keck and S. Esener)

ATTENDEES

JTEC:

S. Esener
G. Holdridge
D. Keck
G. Saxonhouse

HOSTS:

Robert A. Day
Automatic Machine Systems Div., Kodak Park
John E. Rueping
Unit Director, Machine Vision & Flexible Automation, Mach. Syst. Div., Kodak Park
Keith E. Wetzel
Sr. Dev't. Engineer, Electronic Packaging Design, Electronic Products Div., Elmgrove Rd.
Tom VanValkenburgh
Unit Director, Advanced Manufacturing Systems, Manufacturing, Research and Engineering Organization, Kodak Park
John H. Shafer
Manager, Optomechatronic Imaging Subsystems, Kodak Apparatus Div., Elmgrove Rd.
Gene Kohlenberg
Unit Director, Optical Manufacturing R&D Lab., Manufacturing Research and Engineering
David B. Kay
Optical Heads Group Leader and Research Associate, Storage Products R&D, Kodak Park
John Agostinelli
Materials and Device Technology Lab., Electronics Systems Division

BACKGROUND

The Eastman Kodak Company was founded in 1880 as a full-service photography company, manufacturing cameras and film that the customer returned to Kodak for processing and printing. The company now employs approximately 100,000 people worldwide, with approximately 39,000 of those in the Rochester, NY, area. Of these, about 2,000 people are involved in production technology development, of whom some 300 are involved in the development of manufacturing equipment. Kodak had sales in 1993 of about $16 billion. On average, approximately seven percent of earnings are reinvested in research and development. According to the company's representatives, the bulk of Kodak's R&D budget is devoted to new product development; a comparatively small fraction is spent on manufacturing engineering or process development.

Kodak has undergone several restructuring exercises over the past three decades relevant to its optoelectronic manufacturing activities. Having grown into a diverse multinational company. Kodak was restructured in the mid-1980s into strategic business units. As a result of this restructuring, Kodak later deemphasized some unprofitable activities, including some that had supplied equipment and components for other parts of the company. Thus, the company lost some of its in-house capability to develop manufacturing equipment. Kodak mounted an effort to rebuild this capability beginning in 1990, and it now supports R&D programs in flexible automation, machine vision, and precision fabrication technology.

Kodak has been experimenting with electronic and digital imaging technology since the mid -1970s. This investment was controversial within the company for many years; some critics proposed that Kodak focus instead on its traditional business in silver halide imaging (which even today is a significant proportion of Kodak revenue). As a consequence, Kodak's digital imaging activities went through several phases of uncertain or reduced funding. Related areas of research, such as III-V materials R&D, were reduced or eliminated as recently as 2-3 years prior to the JTEC team's visit.

In 1993, Kodak's Board of Directors named a new Chief Executive Officer, George Fisher, who came to Kodak from Motorola. This recent change of management at Kodak has resulted in an important boost for the company's digital imaging activities. Redefining Kodak's core business by characterizing the company as primarily an imaging company, Kodak is divesting itself of some of the more distantly related business units, including chemicals and pharmaceuticals. The new CEO has reaffirmed Kodak's commitment to digital imaging technology and products as an integral part of Kodak's strategy for the future.

R&D AND MANUFACTURING ACTIVITIES

Materials and Device Technology Laboratory

John Agostinelli, who is from the Electronics Systems Division of Kodak Research Laboratories, described Kodak's activities aimed at the development of compact blue coherent light sources. This effort is partially funded by the National Institute of Standards and Technology (NIST) as part of the ATP program. Other partners in the consortium funded under the ATP activity include IBM, Uniphase, the University of Arizona, and Carnegie Mellon University. SDL is also supplying lasers for this effort. Blue light source generation. Activity in this area at Kodak is focused on sources for archival disk storage. Kodak's primary focus in the near term is aimed at obtaining blue laser light by second harmonic generation with diode laser pumping at longer wavelengths. Kodak has selected a quasi-phase matching approach. Materials under consideration include lithium tantalate and potassium titanyl phosphate. Kodak exited the III-V materials R&D area two years ago after a ten-year investment, and is now trying to establish partnerships with outside vendors (e.g., SDL and Uniphase) for a suitable pump laser. The ATP program requires that the laser vendor be a U.S. company. Kodak researchers see a window of opportunity for about three years for their frequency doubled blue light before gallium nitride technology may become competitive. Their goal is to produce the high power package (~20 mW, though 15 mW could be usable) of coherent blue light that is needed to write on a 14 in. read/write optical disk at the earliest possible time.

Don Keck's addition follows as 6.5 Long-term approach to blue light source. Kodak representatives see the III-nitride (e.g., gallium nitride) technology as the most promising material in the long run for direct blue laser sources; II-VI materials may never achieve a true blue (as opposed to blue-green) and also suffer serious lifetime limitations. II-VI lasers so far have not come even close to the lifetime demonstrated by Nichia's LED device.

In terms of performance objectives, Kodak's application requires a laser modulation with less than a two-nanosecond rise time. Product lifetime is also an important consideration: something greater than 10,000 hours mean-time-to-failure is the metric. Alignment and stability are key issues in the interface between the pumped source and the waveguide. Other requirements include the following:

Dr. Kay expressed the view that, while the second-harmonic approach is expensive, Kodak views it as cost-effective now for high-end archival systems (especially write-once recorders) because of higher-output power possible with this approach and the greater impact on storage capacity of 14 in. disks: 10 GB can be stored on current versions of the 14 in. disk; 10 to 15 GB capacity (double sided) is expected. Though similar capacity could be achieved with arrays of low-capacity conventional optical disks (5.25 in.), such arrays cannot match the performance of the single 14 in. high-density disk in terms of cost/MB. Fast actuator technology for optical heads is another area of R&D required in order to support higher density and data rates in optical disks of this type. Customers for the 14 in. disk system include the Internal Revenue Service and other U.S. government agencies. Parallel access using multiple blue sources was originally included in the ATP proposal to the NIST for this system. However, this complicates the IR diode source laser design, requiring TM polarization to efficiently use second harmonic generation sources. So far it has proven impossible to build an array of high-power, single-mode TM diode lasers for multichannel capability. Multichannel capability also complicates the design of heads and lenses in such a system, increasing costs. After consultations among the partners in this effort, it was decided that there is no pressing requirement for parallel access during the three-year period when the second harmonic approach is viable.

Comparable Activities Abroad. Kodak representatives stated that there is also work in Japan in frequency doubling approaches for coherent blue light sources. Matsushita and Sony are working on ZnSe (II-VI) lasers. Nichia Chemical is now selling blue LEDs in the milliwatt power range with lifetimes in the 10,000 - 20,000 hour range. Sony and Phillips are planning a 635 nm laser for the next-generation optical drives. With data compression, such a disk could play an entire feature-length movie on one side of a disk. The large revenue base and production experience that Japanese companies derive from the existing CD player business puts them in an ideal position to move into the high-density optical storage market.

Other applications of blue lasers. Blue lasers will be used at Kodak for other applications beyond optical disks. Digital imaging requires output devices. For color, conventional photographic papers must be exposed with red, green, and blue sources; diode lasers are a good candidate for these sources. Cost reduction in the light source is a consideration for the 14 in. disk application, but will be a far more crucial factor down the road for use in photo-CD (or other consumer) applications; otherwise, Kodak's products in this area will be restricted to low-volume, high-performance (i.e., small) markets.

The Materials and Device Technology Laboratory is also doing materials development in inorganic thin films. Other materials work in support of image sensor programs is ongoing. In the area of recording materials, Kodak has a history in dye polymer materials and dye work for the photo-CD project. The 14 in. disk under development now uses a phase-change material that Kodak regards as world class; not even Matsushita can match its low power requirements, good stability, and ease of packaging. Other materials work at Kodak includes magneto-optic materials for erasable optical storage and superlattice materials. Materials for writable CDs are another priority; current materials are too costly. Kodak counts materials as one of its strengths in this area: two-thirds of the optical storage R&D budget is materials-related.

Flexible Automated Manufacturing

John Rueping devoted much of his presentation to a discussion of activities at Kodak that have resulted in an understanding of flexible automation technology in Japan. He personally traveled to Japan in 1985, 1992, and 1994 to visit Japanese manufacturing facilities. The 1992 and 1994 trips were each approximately three weeks in duration. Of all the Japanese companies the Kodak team visited, they were the most impressed by Sony. Rueping showed the visiting JTEC group some slides depicting Japanese consumer electronics products (camcorder, VCR, fax machine, etc.), each one of which features at least one part that is aligned to within 1-micron tolerances. This kind of precision manufacturing is not considered possible in the United States today for high-volume consumer products. Other characteristics of these products are: (1) flexible automation is used in their manufacturing; (2) this flexibility allows more than one model to be produced on the same line, allowing the cost of the machinery to be distributed over a larger production base; (3) many of these products will be replaced with new models within six months; and (4) nothing comparable to them is made in the United States.

Rueping then showed a series of slides of several generations of flexible automation equipment -- the kind of equipment that has made precision manufacturing on a large scale affordable for many Asian companies, while minimizing labor costs. The most advanced such system is the Sony "Smart System." This is a robotic assembly system with integrated material handling of parts comprised of four basic modules: Smart Cell (assembly), Advanced Part-Orienting System (APOS), Inspect/APC, and ATC (tray changer). In turn, each of these modules employs many standard parts or components.

Sony uses a large number of similar robotic assembly systems in its own assembly plants in Japan. In settled-down production, these systems typically exhibit a first-time yield higher than 98%. Sales of such equipment that have been made to companies like Samsung and Goldstar have likely helped Sony to finance the development of new generations. Rueping expressed the view that in Korea as in Japan, controlled access to the domestic market, long-term relationships between manufacturers and tool makers (or in-house manufacturing equipment development), and willingness to use and adapt ideas from other companies and other countries have been some of the keys to success in consumer electronics.

Japanese companies have been willing to sell manufacturing equipment to the United States. But new models are often made available for sale here after they have been proven in a domestic market -- more than likely because it is easier to provide technical support and parts for a new or experimental machine tool locally than it is for one installed on the other side of the world. Thus, the purpose for Rueping's study missions to Japan in 1992 and 1994 was to look at flexible automation technology and arrange to purchase some of this equipment.

Kodak is looking towards read/write optical disks as an important new product category for this part of the company. Automated manufacturing of complex or precise parts is key to the company's strategy for reducing the cost of these products. However, Rueping estimates that the cost of developing automated manufacturing for one product line (e.g., high precision read/write optical heads) is in the neighborhood of $25 million over several years. Asked if Kodak is buying robots in Japan, Rueping responded that Kodak will purchase flexible automation when commercial equipment meets Kodak's needs and is attractively priced. In some cases, cost, lead time, functionality, or other business reasons may make a compelling case to develop flexible automation internally or in partnership with others.

Process Development for Electronic Products

Keith Wetzel is primarily engaged in the development of packaging for optoelectronic components, including process development for surface mounting. His organization has been responsible for packaging lasers and LEDs, and is examining options for next-generation packaging of CCD sensors. Kodak buys ceramic packages for CCDs, which are then assembled at Kodak. Kodak also has a limited in-house ceramic packaging (including wire bonding) capability for occasional custom applications. Wetzel showed the visiting JTEC team a CCD array ceramic package with a window installed by Kodak; he also passed around a photo sensor for an automatic camera installed without a conventional package, wired directly to a circuit board with a lens glued directly on top of it.

Kodak's CCD technology is world-class. For example, 16 Mpixel image sensors are available for sale. Sales of CCD arrays to outside customers are currently about half the level of internal consumption. John Shafer described a three-color CCD scanner now available from Kodak that scans one frame per second with three color wheels at 6 Mpixel for each color (for a total of 18 Mpixels). Another CCD product under development digitizes 35 mm movie film into HDTV videotape in real time. A Kodak CCD sensor is at the heart of Apple's electronic camera now being sold as a Macintosh accessory. Despite these successes, Kodak's CCD products are not leading the world in sales; the Japanese dominate the high-volume, low-cost markets for CCD products. Previous Kodak management viewed digital image sensors as merely a defensive technology to silver halide-based products. Current management is taking a more positive view of this technology's role in the company's future.

Therefore, Wetzel and his associates are now looking at plastic packaging as an alternative to ceramics. Wetzel stated that Kodak has the capability to shape and align parts to micron tolerances in selected areas. However, in high-volume manufacturing, improvement is needed in the precise placement of parts. A figure of roughly 25 microns was quoted as Kodak's current manufacturing capability in packaging alignment precision.

Opto-Mechatronics LiNbO 3

Shafer described several interesting Kodak optoelectromechanical products. Expertise in this area has been reaffirmed by Kodak management recently as one of several core areas that are valuable across Kodak's many business units. Shafer's group covers input devices, output devices, and output media. He showed examples of output from the following:

Shafer noted that these are extremely expensive, low-volume products, a distinctly different business from the low-cost, high-volume manufacturing that has been one of Kodak's traditional strengths.

When asked about metrics (current standards) for resolution in optoelectronic imaging technology, Shafer offered the following comments:

In the consumer arena, Kodak's Photo-CD product uses a 2K x 3K array x 8 bits/color. This results in reproduction that is of sufficient quality for up to 8 in. x 10 in. reproductions. For this market to take off, a camera price of $100 $200 will be required; current prices are not there yet. Kay mentioned that Photo-CD has given Kodak considerable credibility among its Japanese competitors.

Optical Manufacturing R&D

Gene Kohlenberg described optical component manufacturing at Kodak, a core part of the company's business, which includes traditional grind and polish, plastic molding, and molded glass. Optics are manufactured by Kodak in Rochester and in Taiwan. Another plant in China was scheduled to open soon after the JTEC visit. Molded glass is of particular interest now for low mass and high precision in optical disk heads. The Kodak proposal to NIST for ATP funding included work on alignment of precision optical components via flexible automation, as a replacement for manual alignment.

Polyolefin plastic is of great interest for use in molded plastic lenses because it is dimensionally and thermally stable and has low birefringence. Pentax is now making lenses with this material; it has applications in optical heads and objective lenses. Although B.F. Goodrich may have invented the material, high-quality polyolefin suitable for uses in lenses appears to be available only in Japan; Mitsui Petrochemical is one of the leading suppliers.

DISCUSSION

Government funding, particularly the ATP program, appears to be playing a key role in leveraging Kodak's high-density optical memory activities. However, this work would have never been undertaken if it were not totally consistent with Kodak's internal requirements. On the other hand, the government has also created demand for the high-end 14 in. disk. In spite of the importance of U.S. government funding, it represents only a small fraction of the total R&D investment internally by Kodak on projects such as the 14 in. disk product. A Kodak representative commented that government contracts can push the state of the art of a technology, but do not necessarily push the development of processes for high-volume, low-cost production. One example is SDL (traditionally a DoD supplier), which outclasses its Japanese competition in 860 nm and 630 nm lasers in terms of both power and lifetime, but not in cost (though prices are coming down).

The current Kodak strategy appears to be to ride down the learning curve on high-density optical memory technology to the point where this technology can be applied to large consumer markets. However, company representatives were very much aware that some of their competition, particularly in Japan, may be following the opposite strategy starting with low-performance devices in consumer markets to build know-how that may eventually put them in a position to challenge Kodak's position in high-performance niches. Some within Kodak have observed that it has proven difficult to build high-volume manufacturing competence in optoelectronics by focusing on high-technology, low-volume products first.

Kodak representatives mentioned several examples of inadequate U.S. infrastructure available to support its optoelectronic R&D and production activities: no U.S. supplier is willing to produce the very high-quality polyolefins that are an ideal candidate material for molded plastic lenses; evidently the low volume that Kodak would require of this material does not justify the investment required to produce it. Mitsui Chemical has offered finished polyolefin lenses for sale to Kodak. The samples Kodak tested were of inadequate quality, and the offer was rejected. The JTEC panel's hosts also cited examples of where U.S. machine tool makers were unwilling or unable to produce custom tools needed on Kodak's assembly line; the necessary tools can be procured in Japan.

In the development of heads for high-density optical disks, the U.S. strengths are in molded glass and plastic lenses; actuators and laser diodes are coming mostly from Japan. The Japanese also have the infrastructure and know-how (e.g., head alignment) in place to put all of these components together for the next generation of drives.

Sony and Sanyo dominate the market (~80+%) for read-only CD heads (at the current price of about $10 each). Kodak representatives described their vision of the future evolution of head design and construction. Current heads are about half the size of a cigarette pack, with conventional prisms, lenses, and so forth, assembled as discrete components. These are being replaced in production CD players (especially at Sharp) with micro-optics packages with integrated beam splitters and detectors fabricated on board. Phillips, Sharp, and NEC are working on increased power for these integrated assemblies. As this trend towards greater integration continues, laser manufacturers will become head manufacturers. The technology for laser diode grating units (LDGUs) is not yet available. Requirements include circular cross section laser beams; surface-emitting laser diodes currently available are too low in power and at wavelengths that are too long.

SUMMARY

Comments on the ATP Program. Kodak representatives commented that competition for ATP funding is stiff, and producing and defending a proposal requires a significant investment in time for the Kodak employees involved. Other concerns that were mentioned during the JTEC team's visit include the delay in getting ATP-funded programs started and concern over distribution of patent rights within the consortium. However, the panel's hosts expressed confidence that ATP funding can play a key role in allowing these U.S. companies to catch up to the Japanese state of the art in high-volume optoelectronic manufacturing.

Without this incentive, Kodak finds that decisions about production automation are deferred until new products under development are already two-thirds completed. Internally-funded process R&D is difficult to justify for products that are still in the early stages of development, or that are expected to sell at least initially in only small quantities. Kodak representatives mentioned that the company feels pressure from Wall Street to develop new products as quickly as possible. This has led to an emphasis in the R&D budget allocation on product development R&D at the expense of manufacturing process development. Data being gathered within Kodak at the time of the JTEC visit broke out R&D funding by product versus process development as well as product category.

Asked if there is a place for a SEMATECH-type organization in stimulating the development of automated manufacturing technology for optoelectronics in the United States, Kodak representatives replied that the National Center for Manufacturing Science (NCMS) should, and is now beginning to, play this role.

Relationships in Japan. Kodak has an ongoing relationship with Canon in the office imaging area. The company also has its own R&D facility in Yokohama, though that operation has been scaled down considerably from the original plan. However, unlike some of its U.S. counterparts, Kodak has not moved optical storage manufacturing to Japan.

REFERENCES

Eastman Kodak Company brochures on its color, high-speed, and multipixel CCD Image Sensor Models KLI-2103, KLI-2003, KLI-5001 (series), KLI-4103, KLI-6003, KAF-1600, and KAF-4200, and the brochure Speed reading course for color scanners, copiers, and line cameras.


Published: February 1996; WTEC Hyper-Librarian