Nanotechnology Conference Report - 2004
Rick Currin
03/24/04
The 2004 Nanotechnology Conference and Trade Show in Boston was
quite an event. The conference merged interest from established
industry leaders, government, academia, startups, intellectual
property/legal firms, software and tool providers, budding startups
and venture capital circles. There was literally something for
everyone and probably too much going on for one venue.
One thing that a casual observer could certainly see is that the
nanotechnology buzz is now drawing mainstream attention.
“Attendance has exploded” as the Chief Technology Officer of one of
the portfolio companies commented. That nanotechnology has hit the
mainstream radar is apparent. There were even a couple of funds
that announced the launch of nanotechnology investment offerings.
Investment interest has grown since we first started talking about
investing in nanotechnology.
Is Nanotechnology Years Away?
The answer to that is yes and no. Although we may consider that
the real fruits of nanotechnology may be a years away, it is worth
noting that the dawn of nanotech chips is already here. Special
nanoparticle enabled products are finding increased use in a variety
of products already commercially successful. Tools and software are
focusing in on the special needs of research and product
development. When we take into consideration the working definition
of nanotechnology residing in the sub 100 nanometer range, one could
certainly say the current crop of 90 nm microprocessors produced by
Intel are indeed “nanochips”. Similarly, the ultra thin nanolayers
that find their way to GMR (giant magneto resistance) recording
heads are pushing practical commercial nanotechnology tools already.
Is it Really Nano?
One of the arguments in the scientific arena is that with a
definition that allows anything in the sub 100 nanometer scale to be
dubbed nanotechnology, too broad a set of things can fit the term.
That is true. Colloidal chemistry, polymer science and a range of
items in various disciplines have used nanoscale science for many
years. We too would argue that the real age of nanotechnology is
not so much that science is in any way operating at the nanoscale;
but that the ability to create and manipulate at the nanoscale with
a convergence of a controllable, functional, utility is indeed new.
In that respect, “old nanoscience” can indeed meet up with new
nanotechnology in some interesting ways.
For example, there is nothing really new about either albumin
protein or the taxane cancer drugs developed from paclitaxel. In
fact, when the albumin was used to bind paclitaxel to eliminate the
need for a toxic solvent, that was also seemingly rather
straightforward. However when the nanoparticle bound form of the
drug was tested in clinical trials, there appeared to be an
additional “bioavailability” mechanism attributable to the
nanoparticle protein interfacing with the cell. The benefits to the
cancer treatment appeared even greater than anticipated. In other
words, an additional benefit that was not expected from the
nanoscale drug delivery application was discovered.
At the nanoscale, the discovery of novel properties and
interactions is the norm rather than the exception. Things behave
differently at the nanoscale and the discoveries of novel properties
and interactions leads to more and more applications whether you
call the applications nanotechnology or not. In a very real sense
many commercial opportunities will result from discoveries as will
emerge from plans.
Because the ability to create and manipulate in the nanoscale has
arrived all sort of happy accidental discoveries will result. In
the preceding example, the prospect that insoluble drugs can be
“more effective” because of protein encapsulation has a huge
potential ramification for other insoluble drugs that were not even
initially considered for the application. In our view, the upside
potential for use with other insoluble drugs is not even considered
in the drug stock featured in the nanotechnology portfolio.
We have no real stake in the argument that nanotechnology may be
better suited to be defined as the ability to manipulate items from
a bottom up approach as opposed to the ability to reach the
nanoscale from the top down; as has been done in semiconductor
fabrication. The bottom line is a convergence of both approaches is
not only consistent with the working definition of nanotechnology
but with the ultimate realization of practical commercial
applications as well.
That is to say if you made a nanodisplay you would need some
bionic eyesight to use it. Typically, the end products will be a
lot bigger than nano and producers won’t care that they were made
with nanotechnology. Whether shrinking things from top down or
building things from the bottom up, there is little doubt that
nanoscale science (and nanotechnology) will influence the
developments of man machine interfaces and diverse display
applications. There is also little doubt that, in a final product
form, many nanotechnology applications with be upwardly integrated
into much bigger things than possible without nanotechnology.
Nanotechnology applications will likely converge from both top down
and the bottom up directions as larger scale fabrication
technologies reach down to interface with the integrated
nanoelements reaching up. Also, nanotechnology fabrication might
allow for production of certain products in previously unavailable
form factors such as rolls and films. This could mean a product
such as a HDTV quality video display could reach the size of outdoor
scoreboard at a low cost unimaginable by today’s capabilities.
The reality is nanotechnology is being embraced as a necessity
both by a variety of industries and by the U.S. government as a
means to maintain an economic edge based on technological prowess.
With the combination of driven direction, technical need and
government fuel, smart investors will be rewarded with the right
investments.
At the 2004 Nanotechnology Conference and Trade Show in Boston
there were a few things that certainly caught our interest. The
conference was so diverse it was hard to catch all the relevant
sessions. Several companies from the nanotechnology portfolio were
there in full force. We were pleased to see two of them actually
had full page color ads in the conference brochure and the prime
real estate on the trade show floor. It’s always good to get to
discuss things face to face with engineers and management from the
companies in the portfolios, and we were able to do that with a few
of the portfolio companies and a couple of the private companies we
are watching.
Nanoelectronics at the conference
Arguably, the two areas of greatest investment attention and
capital interest will be semiconductors/nanoelectronics and
nanotechnology for biotechnology or life sciences. A review of the
attendees by sector showed that three areas dominated.
Electronics 26%
Health Sciences 24%
Materials 24%
While the materials area is arguably just as
large as the other two, it is important to remember the principle of
a product food chain as it relates to materials. The earlier in the
chain the less "value add" premium afforded the product. In other
words, nanomaterials will enable nanoelectronics and health sciences
too. Nanoelectronics will enjoy greater investment than
nanomaterials because of the position on the food chain. That is,
nanoelectronics will produce the end products that nanomaterials
enabled. Our belief is that large scale nanomaterials will
ultimately be swallowed up by the big material players in the
industry. Of course for someone invested in the right nanomaterial
stock that “buyout” will probably be a good thing. So while
materials certainly share a dominant position in the nanotechnology
arena, the investment capital interest in electronics and health
sciences are certainly greater.
Taking great license with summation, here’s our takeaway from
four separate presentations relating to nanoelectronics:
Strategic Nanotechnology at Intel
Keynote, D. Tennenhouse, VP Corporate Technology Group Intel
Nanowires: Creating Nanosystems and the Nanotechnology Revolution
C. Lieber, Founder Nanosys
Semiconductor Industry and Nanotechnology
J. Matisoo, Semiconductor Industry Association
Semiconductor R&D in the 300mm/Nanogeometry Generation
A. Wild, Motorola Crolles Research Center
Semiconductor design will embrace nanotechnology in the natural
evolution of Moore’s Law. Created by Gordon Moore of Intel, Moore’s
Law states the number of transistors per square inch on integrated
circuits would double every 18 months. This incredible increase of
processing power has led to the super powerful computers at the
reasonable prices we have today. In planning to continue Moore’s
law, prototypes with geometries as small as 22 nanometers have
already been developed. However, the technical challenges of
shrinking (top down) designs to this scale are significant. New
materials are required for the approach as the quantum physics
effects take their toll on the performance characteristics of a
traditional silicon design. These challenges are being researched
on multiple fronts to ensure the industry is ready to converge
bottom up nanotechnology with traditional top down shrinks. At the
current pace, development is already way behind.
The challenges of 300 mm design already impart huge capital
costs. The looming costs and gargantuan fab facility requirements
must also be dealt with in order to realistically meet future
technical challenges. The technical challenges alone are
difficult. The industry is already behind the required pace of
development to ensure top/bottom convergence is possible in around
2012. This is the time frame even the Intel prototypers can’t
figure out how to shrink anymore and still function as a viable
circuit.
Research and development needs to pick up the pace of development
in order to meet the looming technical challenges. This “picking up
of the pace” needs to happen on several fronts including industry
collaboration, academic research, and university preparation of the
coming requirement of new nanoengineers. Can the challenges be
met? There is little doubt. Will the challenges be met by
nanotechnology? By size requirements alone, the answer is yes.
In the meantime, novel approaches to electronics design are
preparing to alter the landscape. In a bottom up approach it is
possible to create devices that could never be designed from the top
down. Such approaches could include segmented nanowires that
essentially extrude basic semiconductor devices. The far reaching
goal of bottom up approaches is to significantly alter the top down
mentality to create fabrication processes that are batch in nature.
By utilizing self orienting or assembly techniques integrated with
seemingly conventional batch processing approaches, we can for
example expect to produce a flexible video display in a continuous
film process at fractions of the cost. The possibility is that
nanotechnology fabrication techniques will drastically alter the
industry radically cutting costs in key applications. This will
shake up the powers that be and leave some wondering, “what just
happened?
Somewhere between the star trek future of self assembly and the
quantum physics limits of top down engineering design efforts will
converge in nanoelectronics. In the long range goal of Intel,
computing will be extremely pervasive. Intel envisions self
assembled nanoarray elements being converged with conventional
nanolithography scaling. They also envision radio linked computing
networks as the future model of interconnected computing. Radio
capabilities will be in every chip if Intel has their way to use RF
to push microprocessors toward complete ubiquity. This happens if
RF is CHEAP. Mr. Tennenhouse mentioned Radio Frequency (RF) as
being jokingly dubbed “Radio Free” at Intel. This is a not so
subtle clue that RF capabilities are viewed by Intel as a means to
spur demand for more microprocessors.
The ultra complex world of semiconductor microprocessor design is
too big an interconnected elephant to eat even for the nano dream
weavers. Applications for flexible displays, memory, sensors,
lighting, “nanoprinted” circuits, and lasers however will come first
and much sooner than you might think.
In the meantime, companies pursuing novel nanoelectronics
applications still continue to find real investment interest not
because of their size of their applications but because of their
promise in terms of technical need, wealth creation, novel features
and potential to create new product markets or eliminate old ones.
We are glad to bring you portfolio stocks that are already
producing commercial results in nanotechnology. However, the
momentum is also building for a few private companies with huge
potential for high returns to go public as well. We will continue
to track these and bring future reports on nanochips, nanowires and
nanotechnology for life sciences.
Follow the money and keep thinking small.
Perhaps Thursdays’s report on nanotechnology
was a bit prophetic in saying:
“Our belief is
that large scale nanomaterials will ultimately be swallowed up by
the big material players in the industry. Of course for someone
invested in the right nanomaterial stock that buyout will probably
be a good thing.”
Just today the large scale nanomaterial company
in the portfolio is trading up close to 20% on an announcement that
a larger chemical company has purchased a stake in the company and
entered into a partnering agreement.
The
CurrinResearch.com portfolios, unlike the negative
broad averages this year, are performing quite well and have
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Rick Currin
03/25/04
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