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October 17, 2004

Jessica Gomez holds one of the “wafers” her company will manufacture in Medford. They are the raw material on which computer chip-makers make their products.
Mail Tribune / Roy Musitelli

Chipping in: Couple chooses Medford for their high-tech start-up


By GREG STILES
Mail Tribune

Jessica Gomez and her husband, Patrick Kayatta, had a good thing going working for a computer chip-maker in Southern California.

The pay and stock options were good at Integrated Micro Machines in Monrovia, 10 miles east of Pasadena. Even more important, they had a say in the operation of their unit at the optical switch device maker.

Integrated Micro Machines, however, was dependent on a collapsing telecom industry. A work force numbering close to 180 had been whittled to a half-dozen people when the company closed its doors in June of 2003.

"By the time we were let go, we were the last six people left in the company," Kayatta says. "We were generating a fair amount of revenue, but the company was sized for a much larger staff and the overhead was too much."

Integrated Micro Machine’s demise proved to be the inspiration for Southern Oregon’s latest high-tech venture.

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The couple is creating Rogue Valley Microdevices Inc., the area’s first microelectronics manufacturer with production scheduled to begin in December. They will coat chips for customers who will then add microcircuitry for a variety of products.

But the couple’s 700-mile journey to an area eager to incorporate their skills didn’t begin right away. Both found suitable work following their layoffs, but neither was really satisfied.

"The problem was that we had gotten used to a lot of freedom and involvement in the decision-making process," Kayatta, 41, says. "Although it did pay the bills, the jobs we had taken weren’t the type of jobs we wanted for our career."

As they pondered their future, the couple was drawn to Southern Oregon, where her parents had moved in the early 1990s.

"As we started checking (the Rogue Valley) out," Gomez says, "it began looking better and better."

Everything from energy costs, to rent and the lack of a sales tax pointed north, away from California.

The monthly power bill at Integrated Micro Machines was $50,000, a prohibitive figure for a start-up operation.

"Really everything —flooring, electrical all those things you need to get a facility up and running — is between 25 and 30 percent more there (in Southern California)," Gomez says. "Our (Rogue Valley) space is 47 cents per square foot a month vs. $1.50 in Southern California — not including triple-net charges (a lease arrangement where the tenant pays all operating expenses)."

Rogue Valley Microdevices rented a 2,400-square-foot warehouse on Automation Way off Biddle Road and secured financing for what began as a $600,000 project from Southern Oregon Regional Economic Development Inc. and PremierWest Bank.

The "class 100" clean room (where there are no more than 100 particles larger than 0.5 microns per cubic foot of air) has been assembled, a 480-volt electrical line has been installed and the company is awaiting a $160,000 low-pressure chemical vapor deposition furnace.

see CHIPPING, Page 3E

"We felt not only was this a business with a good chance of succeeding, but that they’re pretty well respected and have a lot of good contacts in their field," says Bob Bueoy, SOREDI’s business development specialist.

SOREDI typically lends to new or expanding companies, using machinery as collateral. But high-tech machinery doesn’t hold its value over time like other industrial pieces.

"We felt their abilities and what they had demonstrated they were willing to put into the project overcame the deficiencies in collateral value," he says. "We were willing to go out on a limb."

Gomez, 26, says there is a foundry — where silicon film layers are applied — in Eugene, but it doesn’t service outside clients.

"The next-closest facilities are in the Portland-Beaverton area and Silicon Valley," she says. "But for what we are doing, where we are has zero effect, unless we were on the East Coast because of the time difference."

Gomez and Kayatta are willing to buck domestic manufacturing and technology trends. While their pursuits are firmly 21st century, they are cast from the same mold as the rugged individualists who tamed the continent.

"We’re thinking outside the box: If we can’t find a job, let’s make a job," Kayatta says. "There is a lot of entrepreneurship in this area. Some people get locked into finding a job for the safety and security of having a job. I think people here are a little more adventurous, a little less hung-up on needing to find a job and more into finding something that is fulfilling.

"They rely more on themselves to determine their own destiny than to rely on some big company to determine it for them."

He says that’s evidenced by the scores of shops, coffee shops and other family-run operations around town.

"In Southern California, you don’t have this," Kayatta says. "You have large chain stores or large corporate businesses with satellite offices. Driving through Medford, you see industrial parks, body shops, repair shops, computer stores, office supply and what have you. You can spend weeks driving through this area and checking out all the small businesses.

"It’s a very entrepreneurial area and we’re one of many small businesses that have taken on the challenge of opening up and making a go of it."

Medford economic development coordinator Bill Hoke hopes the company will attract similar operations to the area.

"They recognize this is a good place for them to do business and it will pique the interest of other like-type businesses," Hoke says. "It will probably increase awareness of the area and word will get out that the water is good and environment is good. They may have some customers that would want to be close to them that manufacture a part that uses their chip."

Because manufacturers like Integrated Micro Machines have disappeared, the door is open for Rogue Valley Microdevices. Demand is on the rise and some of their former employer’s customers are ready to buy.

"A lot of places have their own facility, but their tools are broken or they’re not satisfied with the quality and will outsource," Gomez says. "It’s tough for them to find affordable chips."

At the beginning the company will send unfinished chips to clients, who will then add their circuitry. Within three years, Rogue Valley Microdevices plans to produce completed chips used for pressure sensors and ink-jet heaters.

Gomez says a general film run processing 25 wafers costs upwards of $1,000. Depending on a chip’s dimensions, their customers can cut 100 to 300 computer chips out of a single wafer. Those chips can then be sold for $150.

If all goes according to plan, the firm will take on additional employees sometime next summer.

"We’re not the eccentric Ph.D.-types," says Kayatta, who used to drive an open-wheel modified car in competitions at a NASCAR track on New York’s Long Island. "What we lack in higher education, we make up for in common sense. We roll up our sleeves and get our hands dirty."

Reach reporter Greg Stiles at 776-4463 or e-mail business@mailtribune.com



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