IMPROPER MICROCHIP TESTING MAY BRING CRIMINAL INQUIRY

By DAVID E. SANGER

Defense Department officials said yesterday that they would probably investigate Texas Instruments to
determine whether the company violated criminal statutes when it shipped improperly tested
microchips to manufacturers of weapons systems.

Late Monday the Pentagon said it had stopped accepting military equipment from more than 80
contractors who had used the Texas Instruments chips, in some cases for more than eight years. Texas
Instruments officials have said the company has recalled the suspect chips, on which complex electronic
circuits are printed, and halted some shipments.

''Right now we don't know of any weapons systems which have failed because of these components,''
said Donald Moore, the deputy director of quality assurance at the Defense Logistics Agency, which
oversees the Pentagon's weapon purchases.

Mr. Moore and other Government officials said yesterday that it was a Texas Instruments chip, similar to
those under scrutiny by the Pentagon, that short-circuited and caused a delay in the launching of the
space shuttle Discovery in June. The chip was part of the shuttle's computer system. Chip Used in
Warplanes

Yesterday a spokesman for the International Business Machines Corporation, which brought the
improper testing to the Government's attention, said that the microchips were part of the bombing and
navigation systems for such military aircraft as the B-52 and B1-B bombers, and the F-15 fighter.

The shuttle's computer system was put together at the same I.B.M. facility in Owego, N.Y., where the
company first discovered last year that Texas Instruments had not tested the military chips according to
I.B.M.'s specifications.

Defense Department officials said they thought that over the past eight years, 15 million of the chips
had been shipped to I.B.M. alone, a number I.B.M. said it could not confirm.

From 1,700 to 4,700 different types of chips are involved in the investigation, and yesterday other major
military contractors, including Northrup Corporation, General Dynamics, Hughes Aircraft and Lockheed
Space and Missile Company, were trying to determine whether they had used the suspect chips as well.
Situation Is Confused

''We still don't have the full list of components from Texas Instruments,'' said Gregory Lebrache, a
spokesman for Northrup, ''and we're told it won't be out until the end of the week. It could be days or
weeks before this thing gets worked out.''

The Pentagon said in a statement, ''We are looking at the entire matter to determine if an investigation,
with the attendant possibility of civil or criminal action, is appropriate.''

If a criminal investigation results, it would be pursued by the Justice Department, Defense officials said.
In March, Justice Department prosecutors obtained a guilty plea from National Semiconductor
Corporation in a similar case, and the company was fined $1.75 million.
Texas Instruments has admitted that its revenues would probably be hurt, and on the New York Stock
Exchange the company's shares fell 6 1/2 yesterday, to 135.

Conflicting reports abound about how Texas Instruments, one of the nation's largest defense
contractors, allowed the chips to leave its Midland, Tex., plant without proper testing.

Jim Harroun, a spokesman for I.B.M.'s Federal Systems Division, said that the company determined in a
routine audit that Texas Instruments was fully documenting the tests it was performing. ''The problem
we had was that the tests did not meet our specifications,'' which he said ''somewhat exceed''
Government quality-control guidelines. ''T.I. was very cooperative,'' he said, and ''we are now getting
chips that are tested to our requirements.''

Mr. Moore indicated that in some cases Texas Instruments may have misled customers, deliberately or
accidentally, about the thoroughness of its testing. The company, he noted, has moved its testing
facilities twice since 1977, and ''they may have lost control over those test procedures.''

Mr. Moore said that the Defense Department would resume accepting shipments of affected weapons
systems ''incrementally, as we clear each of the components of testing problems.'' He said he could not
estimate how long the procedure would take.

Shuttle Responsibility Denied

DALLAS, Sept. 11 (UPI) - A Texas Instruments executive today denied that ''testing irregularities'' of the
company's microchips caused a delay in the launch of the space shuttle Discovery in June.

Norman Neureiter, the corporate staff vice president, acknowledged that a microchip that failed was
made by the company, but said: ''It is erroneous to say T.I. was responsible for the delay in the space
shuttle. A tire goes flat, a light bulb burns out under certain circumstances. We and I.B.M. view it as a
random failure.''

Mr. Neureiter said, however, that a ''handful'' of tests were apparently improperly conducted at the
company's military manufacturing plant in Midland, Tex., and in Taiwan.

He said the company brought the iregularities to the attention of the Defense Department. ''We have
found no evidence of fraud, but nothing has been ruled out,'' he added.