o

Expanding research & development is important to the future of the United States and to M/A-COM; without R&D, industrial units rapidly become non-competitive.

M/A-COM R&D is directly responsible for our company's leadership and success by producing new products and processes in the telecommunications, defense and health fields.

The R&D tax credit has, by itself, stimulated us to make a greater financial commitment to R&D than we otherwise would have, which we expect will make us more competitive in international as well as domestic markets.

o

Refusal to make the credit permanent would tell corporate management that R&D is no longer a national priority; this would be the wrong signal to send.

M/A-COM, Inc., South Avenue, Burlington, MA 01803, (617) 272-9600

Mr. Chairman, I am John R. Colbert, Treasurer of M/A

COM, Inc.

I am pleased to have the opportunity to present M/A

COM's views in support of extending the tax credit for increasing research and development expenditures. I have been assisted in

preparing this

this

statement by Dr. Joseph Saloom,
Joseph Saloom, a Senior

Senior Vice

M/A-COM was founded in 1950 as Microwave Associates,

Inc. and
adopted its present name

in 1978 to reflect the company's diversification. We have evolved from a company that

chiefly sold microwave products to the military into a designer

and manufacturer of equipment and systems for use in satellite

supplier of coaxial cable

coaxial cable for the CATV industry and a major designer and manufacturer of numerous digital communications products as well as microwave semiconductors, components and

Fiscal 1982 was a record year for M/A-COM, with sales

recession, profits were down and earnings per share fell 48 from

the previous year.

In spite of flat profits, we substantially increased research and development expenditures in 1982.

I want

to discuss this in more detail in a moment.

M/A-COM is a leader in high technology industry in the

systems for the Department of Defense, and we

we are the largest

In the microwave components area, M/A-COM manufactures

of military radar, missile guidance systems, electronic countermeasures equipment, and navigation systems. Some of the specific products include PIN diodes, used to control the passage

of electrical energy through circuits; Schottky-barrier and point

contact diodes, used to receive and detect microwave signals;

,

Gunn diodes, used to generate low levels of microwave power; and microwave transistors, used to amplify microwave signals.

M/A

COM now has in place the technology base to manufacture the underlying materials--silicon, gallium arsenide and ferrites-used for microwave components,

well as the ability to

as

manufacture circuits, assemblies and subsystems for commercial

and defense products.

The experience gained from the

recent

conflicts in the Falkland Islands and the Middle East suggests

commercial side, the lighter weight and increased reliability of

We at M/A-COM were greatly heartened by the recognition

credit as part of the Economic Recovery Tax Act of 1981, and we have sought to do our part in continuing the American tradition of industrial growth. As a "high technology" manufacturing company, we are acutely sensitive to the continuing need to grow;

companies like ours must have in order to prosper.

We view our own research and development program as the

growing, highly competitive

telecommunications industry the company with an old product line quickly becomes the company you

used to hear about, but don't any more.

For an example, TV news

coverage used to depend upon a person at the scene who made some

sort of recording, which was then transported back to the TV

station, then broadcast to the public.

Initially, that camera

was bulky and heavy, and the film had to be carried away and

processed.

Today, using technology created by M/A-COM research,

easily transportable microwave links and lightweight minicams

relay pictures

instantaneously

to the broadcast station

and

"live" into the homes of the American public,

Now, when Reggie

Jackson hits a home run, a new President is inaugurated, or this

committee makes the R&D tax credit permanent, we can all see it live as it happens. No more need to wait for "film at 11."

M/A-COM research has

has

application in many facets of

American life.

For example,

microwave sensor technology which

was developed for the space

space program has been applied by our

scientists to medicine, resulting in a device which is able to

detect both existing and incipient cancer tumors in the human

body by sensing a heat differential unique to a tumor. This device is currently being tested in several medical institutions

around the country.

If it fulfills its promise, it will provide

every physician and health facility with affordable access to a

reliable means of cancer diagnosis, enabling early treatment of

Another device, also in the same testing stage and