Buffeted by depressed sales and the soaring costs of creating the new products demanded by a volatile industry, several major computer and semiconductor companies are developing a program of jointly financed cooperative research and development.
According to some analysts, this is part of an effort to band together to stand up to the giants of the industry, such as IBM, and to Japanese manufacturers.
The impetus for the plan came from William Norris, chairman of Control Data Corp., who organized a meeting of 15 chief executive officers in Florida in February to examine its feasibility.
Control Data officials and other informed sources in the industry said that the discussions still are preliminary and that no firm plan has been developed, but the first step probably will be creating a joint venture to sponsor high-technology research in universities.
At the most recent meeting of the study group, which was held in Denver three weeks ago, participants agreed on the "need to stay competitive and therefore to stimulate research and engineering in computer science and semiconductor technology," according to a spokesman for Digital Equipment Co., one of the participants.
Computer science and semiconductor technology are becoming more closely related as computers incorporate more sophisticated electronic memory chips and semiconductor makers use computers to design new products, so the overlap of interests is clear, he said.
William Shaffer, spokesman for Control Data, said the participants in the exploratory meetings include such giants as Rockwell International Corp., Xerox Corp., United Technologies Corp., Sperry Corp., Burroughs Corp., NCR Corp., Honeywell Inc. and Motorola Inc., in addition to Digital Equipment and Control Data.
"They all agree on the need to maximize the value" of their research and development dollars, he said. "Given the availability of capital and talent and the pressure to shorten development cycles, and the exploding range of individual technologies that have to be pursued in depth, joint R and D can save time, money and recruiting expense."
The prospect of cooperative product development among competing companies raises obvious antitrust questions. Shaffer said federal antitrust officials had been informed of the discussions, but "we are in no way in a position yet to request Justice Department approval. We expect to be able to draft a proposal by the end of the summer."
A senior antitrust official at the Justice Department said there is "no absolute reason why we should oppose this. The policy of the department is that there are circumstances where joint research activities are permissible and promote efficiency."
"I don't think the antitrust issue is a concern any longer, given the concern about competition from Japan Inc.," said Harry Edelson, an industry analyst at First Boston Corp. He and other analysts pointed out that computer and electronics companies already are linked in several jointly owned ventures and subsidiaries, none of which has raised antitrust complaints from the government. Control Data, for example, shares with Honeywell the ownership of Magnetic Peripherals Inc., which makes devices to store and print computer data.
Any proposal for joint R and D work would present thorny operational problems, such as what work should be done, by whom, and in what laboratories; who would benefit from any patentable results; and whether the research effort should concentrate on techniques and processes or on specific products, such as random access memory chips, in which Japan is dominating the market. Joint sponsorship of work in universities could bypass some of those problems as well as the antitrust issue, industry officials said.
International Business Machines Corp., the giant of the computer industry and a longtime rival of Control Data, is not participating in the talks. "It was erroneously reported in some trade papers that IBM was one of those attending the meetings, but we were not, and where that appeared we have corrected it," an IBM spokesman said.
Unlike some of those who attended the meetings, IBM remains profitable and has enough capital resources to finance its own research programs. In fact, IBM, which had worldwide sales of $29 billion last year, is so strong that some analysts believe that developing a defense against IBM is one of the motives of the joint effort being discussed by its rivals.
Ulric Weil, an analyst with Morgan Stanley Inc., said that Control Data "is part of a group of companies, including Sperry Univac and Honeywell, that are underresourced relative to IBM and AT&T, which they are competing against. They are saying, 'Look, none of us is strong enough financially to stand up to the Japanese or IBM by ourselves'."