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I came across a super interesting article from 1988 titled Australia's New World Standard IC Foundry. It profiled a leading edge silicon fab built by an Australian electronics company I had never heard of. Amalgamated Wireless Australasia, or AWA. What is this company? In the 20th century AWA produced radios, televisions and other electronics and they were once Australia's largest electronics company. In the 1980s they built one of the world's most advanced semiconductor fabs and sadly it was torn down for reasons I scarcely believe. In today's video we cover one of Australia's most iconic companies, now forgotten. This video is brought to you by the asianometry Patreon. Australia is and always has been physically isolated from the rest of the world. Even after the Suez Canal opened, it took about four to six weeks for a person to go from Great Britain to Australia. Such isolation has long been a concern for its government which depended on a few precarious telegraph cables to quickly communicate with England and the rest of the world. Then came a new game changing invention from the Italian Guglielmo Marconi. In 1902 the Marconi company offered to build a wireless connection between Australia and New Zealand. A year later they again offered to build a wireless link to Tasmania. The DeForest Company, Telefunken Company Lodge, Muirhead, Shoemaker and others all poured into the country looking to gain government backing for their own proprietary wireless technology. But in these early days the Australian Federal government already had a lot on its plate and and the British Home Government wanted its colonies to adopt a more open, interchangeable wireless standard. So the politics meant that Australia stayed put. They passed a law in 1905 giving the federal government control over wireless adoption on the continent. But little else happened after that. This inaction finally ended after the Inter Imperial Conference held in Melbourne in December 1909. War with Germany then seemed on the horizon and the Germans had colonies of their own in New Guinea. People pointed out that a wireless coastal network can help communicate with warships. So the conference recommended that the Australian government build two high powered coastal wireless stations in Sydney and Fremantle. Such a system would be the cornerstone of a ship to shore wireless network for commercial and military purposes. The government called for tenders and the lowest came from a small syndicate of local Sydney businessmen called Australasian Wireless Limited or awl. AWL licensed its technology from the German Telefunken company. But Marconi sued, asserting that the Germans infringed on his patent while also playing up national security concerns. To settle, the two corporate interests merged in 1913 to create a AWA. Telefutkin's small share in AWA was then forfeited during World War I. Within hours of the declaration of that war, the Australians helped cut Germany's submarine cables. And this forced the Germans to communicate only via coded wireless messages. Unfortunately, they had too much confidence in their codes security. For their part, Australia's submarine cables remained intact during the war's four years. But concern lingered and this motivated the Australian government to build a direct wireless link with the United Kingdom. In September 1918, after World War I's end, AWA's newly appointed director, Ernest Fisk, made a big splash by demoing the first official long range wireless communication between the two islands. This thrilled Australia's Prime Minister, Wm. Billy Hughes, who then proposed a more formal direct connection to Britain. The British were somewhat reluctant. They preferred a chain of wireless links. But Hughes insisted on a direct connection. To build this, the Australian government tapped AWA. In 1922, the Commonwealth bought 50% of the company plus one share, giving it majority control and putting them ahead of Marconi in the capital structure. AWA then acquired the government's network of coastal wireless stations. While it was not then profitable, it gave them a presence in Australia's major ports and New Guinea. They also received exclusive rights to build and operate Australia's wireless connection to England. AWA completed the wireless telegraph service called Viabeam, five years later. Via Beam's inherent cost advantages over cable made it an immediate hit. Additional destinations like North America and India soon followed. By 1929, AWA carried half of the country's international telegraph messages. The success allowed AWA to pay its first dividend and the business remained a cornerstone for many years. The 1922 agreement created a public private hybrid with ties to the global Marconi Wireless Trust. From the very start, this awkward arrangement attracted criticism about government protection of private interests. AWA had long been interested in expanding beyond simple radio telephony into wide scale radio broadcasting. After World War I, the United States government, concerned about Marconi's dominance over the American radio landscape as well as its foreign ownership, helped orchestrate, so to say, the creation of Radio Corporation of America, or rca. Marconi agreed to this only if it had rights to RCA's patents in the British Empire, which included Australia. Thusly, AWA, as Marconi's agent in Australia, received access to some of the world's most advanced wireless technologies. For most within that portfolio was RCA's continuous wave radio patents, a technology far more practical for broadcasting audio than Marconi's original Spark Gap transmission technology in 1923, AWA started making and selling a brand of radio sets under RCA's brand name Radiola. These Radiola sets were sealed. They can only tune to a single station like 2sb or 2fc in Sydney, 3ar in Melbourne and 6wf in Perth. The stations broadcasted musical programs, children's programs and other random entertainment. And to fund their operations they charged their listeners a monthly license fee. But pirates proliferated. Soldiers coming home from the war brought back technologies like the Triode vacuum tube and and their own radio experiences. Magazines taught people how to build their own open sets to tune into any station. So the stations were reformed into two classes. A set of A class stations reliant on listener fees. They later became the Australian Broadcasting Commission and then AD supported B class stations which grew to become Australia's commercial radio broadcasting industry. But AWA's ambitions were greater than just that. The rise of radio broadcasting devastated the phonograph and music records industry. This allowed RCA to acquire the Victor Company, which was then the U.S. s leading gramophone manufacturer and music records company. The 1929 vertical integration let RCA control both supply and distribution, turning it into a global media technology giant. AWA sought to do the same In Australia. Ernest Fisk championed a merger with the Australian music and consumer electronics companies to create a single radio apparatus company. This company would be a one stop shop for everything related to the electrical reproduction of sound and voice. It seemed possible for a while, but then the political environment changed. In 1931, the incumbent Labor Party, which had struggled to respond to the Great Depression, suffered a landslide defeat by the United Australia Party. This new government was more center right and fiscally conservative than its predecessor. They nixed AWA's plan and laid out a policy desire to keep the media, communications and electronic manufacturing industries separate. This had significant consequences. While AWA did eventually acquire some broadcasting stations, they were generally thwarted in their attempts to get enough to become the Australian RCA or BBC. Thusly, AWA doubles down on manufacturing and its unique ownership structure to become a local manufacturing national champion. Whatever was hot out in the rest of the world, AWA will take the lead in bringing to Australia. AWA's manufacturing led it to produce its own components for its radios, the most important of which were vacuum tubes. In 1920, AWA started making its own tubes at a factory in Sydney to supplement imports made by Marconi and RCA. For the next three years they produced about 4,000 tubes a year. In 1931, they expanded that effort by forming a joint venture with rca, GE and Westinghouse called the Amalgamated Wireless Valve Company or awv. AWV opened a factory producing vacuum tubes under the RCA RadioTron brand. The 1930s became known as Australia's golden age for radio. During these difficult Great Depression years the radio became Australians premier form of entertainment. Shielded from global competition by tariffs and patents, Radiola radios sold in huge bunches. AWV scaled up to produce a million tubes a year in 1939. Across a variety of types. Supply was good enough to make Australia self sufficient in vacuum tubes. In 1939, AWA opened their iconic headquarters at at 47 York street in Sydney. The company's massive communications network in Australia and the Pacific Islands combined with their electronics manufacturing made them one of Australia's largest companies. During World War II, AWA had a critical role as a producer of electronics equipment. 80% of its production was for the government. The company grew to 6,000 employees and generated over 4 million pounds of revenue. AWV expanded its vacuum tube lineup and opened another factory in 1942 producing items at home that could not be imported due to wartime. After the war the British and Australian governments decided that telecommunications should be government controlled. So Australia nationalized AWA's network of telecommunications stations to create the Overseas Telecommunications Commission. Interestingly, the OTC itself was later privatized and named to Telstra, today Australia's largest telecom. In addition, the Australian government started selling off its awa shares. By 1951 the company had fully unwound its long controversial public private structure. These were major changes. AWAs long distance wireless network had been a reliable moneymaker for the company. Its loss resulted in a 26% decline in revenue and 37% decline in profit. In their annual report the board said it would try to compensate by going ever deeper into manufacturing. Every endeavor has been made to counterbalance the loss of the communications by expansion in the other activities of the company. Foremost in these efforts was the company's headfirst dive into consumer electronics. Due to the war, the Australian consumer electronics market had been neglected, protected by high tariffs. A post war boom lifted the consumer radio market to its peak in 1955. That year there were over 2 million Australian broadcast listening licenses. And then there was the rise of television. In 1954 AWA helped run the TV broadcast of Queen Elizabeth II's Australian royal tour. Heralding its entry into a new product category. They and other Australian companies started production of the first television sets a year later. AWAs Radiola Deep Image TVs sold well for many years and the name apparently evokes nostalgia. For some Australians, just 2,400 sets were sold in 1955 1956, but numbers quickly boomed to 430,000 sets by 1959-1960. Yet another sign of technological progress was AWA's first transistor radio, the AWA897P, which entered the market in November 1957. Its price tag was a rather high 20 guineas or $500 today, but it awed people with its portability. Local transistor production soon followed a again thanks to AWA's patent licensing relationship with RCA. In late 1957, engineers from AWV were sent to the RCA plant in New Jersey to learn how to produce their germanium transistors. One of those engineers was Ted Watt. In a rare 2009 oral history taken by the Amalgamated Wireless Australasia Veterans Association, Watt recalls working at AWV's first transistor factory in Rydalmere, New South Wales, South Australia. Inside the factory, female workers slice up an acid etched pure germanium ingots to create thin tiny pellets. The transistor is an alloy junction transistor. To make it, the workers would put its beads together in the right arrangement and stick the thing into a conveyor furnace. The beads melt together to create the alloy junction. They then finish by encapsulating the transistor in a secure packaging. This was very labor intensive work and frankly amazingly sophisticated, even considering it was nearly 70 years ago. By the late 1950s, AWV was one of three companies making transistors in Australia. The other two, STC and Philips, were subsidiaries of foreign companies, making AWV the only Australian owned maker of transistors. In the 1960s, AWA started doing its own semiconductor technology research. They poached a brilliant solid state scientist named Lewis Walter Davies from Australia's national research laboratory agency Cicero to head up a new research lab in Riedelmere called the Physical Laboratory. Over the next 12 years, the physical Laboratory did advanced research in various parts of the semiconductor space. Davies shied away from pure semiconductor research knowing that the company did not have enough resources to compete there. But they did do some pioneering work in niche spaces like solar panels and optical fiber production in particular, though unfortunately they were never able to commercialize their work in the latter. After the integrated Circuit emerged in 1961, Davies led AWA to build their first working IC in 1967, a small two stage voltage amplifier with four transistors and nine resistors. Shortly afterwards they started domestically producing ICs for the Australian Department of Supply. Good news. But the contract was nowhere near big enough to sustain the company. Their core bread and butter business was the protected Australian consumer electronics market. In 1972, a new labour party government took power for the first time in over 20 years. The Whitlam government suddenly announced a 25% tariff cut. I briefly mentioned this event in an earlier video about the Australian car industry. There were several reasons for this drastic change. Whitlam wanted a more open economy and introduced foreign import competition to help tackle the price inflation affecting Australia's then cost of living crisis. Also, by the late 1960s, Australian owned companies in the electronics industry were becoming quite rare. AWA was one of only two remaining not owned by an overseas group. There was the perception that profits generated within Australia's protected market were flowing out of the country. For instance, AWA in 1971 earned 25 to 30% returns on capital and paid a 16% dividend rate on its stock. I presume their foreign owned competitors did similarly. Whatever you might make of those reasons, it looks like the tariff cut itself was carried out abruptly with little consideration about transition. It immediately devastated the domestic Australian manufacturing industry, particularly in the key TV set market. AWA Managing director John Hook fervently argued against this lifting of tariffs. Just 39 years old in 1973, John had inherited the managing director position from his father Lionel. When asked in a 1973 interview to justify the cost of TV tariff protections then estimated at $555 million over the prior 10 years, John said, you've got to decide whether you want an electronics industry at all. In the United States, the massive defense and NASA programs provide a large hunk of the electronics industry's income. In Australia we don't have anything like that. It is the consumer market which must provide a stable base for whatever defense electronics needed. The revolution in electronics is an enormous one. Electronics plays the same part now as steel in the industrial revolution. As foretold, this was absolutely devastating for Australia's domestic manufacturing industry. AWAs labor intensive transistor production line has had to go. TV component production at the plant in Ashfield, Sydney also ended in 1975, all replaced by imports. At the time, Australia's next big consumer electronics product was color television which entered Australia in 1975, eight years after it first appeared in the United Kingdom. The TVs were estimated to cost three times more than their black and white counterparts and 600 to $700 per set. A price so high that it was estimated that most Australians can only afford to rent the device to produce these TVs. Awa struck a joint venture with Britain's largest TV maker, Thorne Awa. Thorne manufactured Thorne's TV design in Japan via manufacturing partner Mitsubishi Electric. The sets were then imported into Australia. Mitsubishi later bought out AWA's share in the joint venture and renamed the company to Mitsubishi Electric AWA. Thus ending AWA's decades long involvement in TV set manufacturing. So the pure manufacturing bits of the business quickly evaporated, but other parts survived, especially those involving systems engineering, high technology and services. An example of such business being a 56 meter long 6 meter tall special screen plus software that awa delivered to the Royal Hong Kong Jockey Club. The Microelectronics and IC business was in this category. In 1976, AWA established AWA Microelectronics as a joint venture with British Aerospace and the New South Wales government. The division grew well, steadily advancing from the 20 micron to 5 micron process node. Thanks to close interactions with Australia's universities. They produced things like ICs for cardiac pacemakers. After some years AWA Microelectronics needed a new fab. Their clean rooms had no more space for equipment so they built A Leading Edge $65 million fab at the Lendlease Australia Centre t Technology park at Homebush Bay in Western Sydney. The FAB was completed in 1988, capable of fabbing 6 inch wafers with 1.2 micron technology, thus making it one of the most advanced fabs in the world. Certainly more advanced than what was available then in much of East Asia. TSMC for their part had something like a 2 or 3 micron node. At the time, Chartered Semiconductor in Singapore was then running a 3 micron process node equipped with this new world class fab. AWA Microelectronics went on to produce several leading edge products for the defense, industrial and medical industries. In particular, they designed and fabbed the chip inside Australia's groundbreaking cochlear implant device. The Bionic ear, as it is called, is now rightly remembered as one of Australia's greatest technology achievements. By the way, this ear story is amazing. I hope to do the bionic ear story in the near future. By now one can perhaps foresee for AWA a future kind of like IBM's a system integrator to deliver custom technology solutions for customers in need of a local partner. But in the 1980s the government kept cutting tariffs, further eroding their competitiveness and and then the company derailed itself due to financial scandal. Earlier in the decade the Australian government floated the Australian dollar to smooth out the resulting volatility awa, like many Australian companies, started doing foreign exchange hedging trades, mostly to pay for component imports. But their head of Foreign Currency Division, 23 year old Andy Kovel, operated with no oversight from management or controls from the auditors. So he went full Wall street bets and started speculating, disclosing to management only the profitable trades and hiding the losing ones. It finally came out in 1987 that AWA had suffered about $50 million of losses, forcing them to restate their earnings and wipe out a good deal of prior profits. Senior management sacked Koval and pursued damages from their auditor, Deloitte. Koval, for his part, said that the senior management encouraged his trades. He told the press that his trades had saved the company prior and that he was being made a scapegoat. But the company also alleged that he moved $1.5 million in trading profits to a bank account in New York. Koval himself had resettled in the United States in 1993. In 2009, the US extradited him to Australia where he was charged with fraud. Three years later he pled guilty to four charges and a very belated resolution to the whole kerfuffle. The financial losses and restatements showed a far weaker company than what had been earlier presumed. Unable to compete, AWA slowly sold itself off piece by piece, eventually becoming a gambling machine company before finally falling apart. The corporate husk of AWA remains providing IT services and networking cloud specialist machines and home entertainment equipment. So how did Australia's semiconductor manufacturing history finally end with a train line? I highly recommend this interview with the Homebush fab's final general manager Andy Brawley, conducted by the podcast AU Manufacturing Conversations. In February 1996, AWA sold its still profitable Microelectronics subsidiary, its Homebush fab to a US based company called Quality Semiconductor for about $11 million. They used the proceeds to buy back shares. Of course, Quality under invested in the Fab, pitting it against its American based facilities. They also got the company out of the medical sector, which I think was a mistake. In 2000, Quality sold the fab to Peregrine Semiconductor, which retooled the equipment to produce silicon on sapphire radiation hardened RF chips for mobile phones. At their peak, they sold 250,000 chips a week. They also provided rad hard chips for the Mars Rover too, which I thought was pretty cool. Unfortunately, Peregrine decided to go fabless. In 2008, Brawley helped get the fab spun off to a new company called Solana, which worked on producing deep UV LEDs. And that seemed to be going well for a while. Then, out of the blue, in 2019, the New South Wales government acquired the FAB's land to build a new line for the Sydney Metro. Given just 18 months of notice and insufficient funds for relocation, Solana had no choice but to close down the fab in 2021, the end of a Australian device and semiconductor lineage that stretched back a hundred years. That same year, the world fell into a global chip shortage and semiconductors became the talk of the town. So to shut down one of Australia's last commercial semiconductor fabs right then is, in my opinion, exquisite timing. But it's also just kinda sad. Alright everyone, that's it for tonight. Thanks for watching. Subscribe to the channel. Sign up for the Patreon and I'll see you guys next time.