The Business Nanotech

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The Business Of Nanotech

Stephen Baker and Adam Aston Business Week.Feb 14,2005

There's still plenty of hype, but nanotechnology is finally movingfrom the lab to the marketplace. et rea!y for cars, chips, an! golfballs ma!e "ith ne" materials engineere! !o"n to the level ofin!ivi!ual atoms

#ity the poor alchemists. They spent the $i!!le %ges in can!le&litlaboratories, laboring to bre" universal eliirs an! to turn basemetals into gol! or silver. They faile! utterly. (y the !a"n of the)cientific *evolution, researchers e+uippe! "ith microscopesfoun!e! mo!ern chemistry && an! !ismisse! alchemy as hocus&

pocus.(ut it turns out alchemists "ere ust a fe" centuries ahea! ofsche!ule. To!ay, in sparkling labs e+uippe! "ith po"erfulmicroscopes, scientists on three continents are promising !ramaticne" materials an! me!icines that "oul! make alchemists prou!.

This "ork takes place in the realm of nanotechnology, in!ustry'stiniest stage. The stan!ar! unit of measurement, a nanometer, is abillionth of a meter && barely the si-e of 10 hy!rogen atoms in a ro".n this universe entire !ramas can unfol! on the tip of a pin, an! asnee-e packs the punch of a raging hurricane.

/hy so small *esearchers have !iscovere! that matter at this tinyscale often behaves very !ifferently. /hile some of the sciencebehin! this phenomenon is still shrou!e! in mystery page 3, thecommercial potential of the infinitesimal is coming sharply intofocus. Familiar materials && from gol! to carbon soot && !isplaystartling an! useful ne" properties. )ome transmit light orelectricity. thers become har!er than !iamon!s or turn into potentchemical catalysts. /hat's more, researchers fin! that a tiny !ose ofnanoparticles can transform the chemistry an! nature of far biggerthings, creating everything from fortifie! fen!ers to superefficient

fuel cells. 6ngineers "orking at the nano scale have a bran!&ne"tool kit that's full of "on!er an! brimming "ith potential riches.

7o" it's time to start cashing in. Throughout 2005, companies largean! small "ill be rushing more nano&base! pro!ucts from labs tothe marketplace. 8onsumers "ill encounter nanotechnology in theform of nick&proof trims on 9ummers, /ilson tennis rac+uets "ith


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etra pop, even golf balls !esigne! to fly straight. nvestors,mean"hile, "ill be face! "ith a sle" of bol! announcements. nFeb. 1, for eample, computer giant 9e"lettackar! 8o. !isclose! abreakthrough in nanotechnology that, "ithin a !eca!e, coul! carrycomputing beyon! to!ay's silicon an! transistors. :/e are

reinventing the computer at the molecular scale,: says )tan/illiams, an 9# senior fello" an! co&author of the report.

For no", nano is starting out mo!estly. The biggest markets fornanoparticles remain in familiar pro!ucts, from the black rubberfiller in tires, a ;4 billion in!ustry, to the silver use! in tra!itionalphotography.


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The +uestions aroun! nano are no longer "hether it's coming or ifit's real but ust ho" big it "ill be. )ome see nano simply as a ne"material revolution, akin to the !a"n of plastics. thers heral! atransition as !ramatic as mankin!'s a!vance from stone to metaltools. (ut those ha-y pre!ictions asi!e, the +uestions that are

echoing from laboratories in Tokyo to the hectic offices of short&sellers on /all )treet are about money. /hich nanotechnologies "illcreate ne" fortunes, in!ustries, an! corporate champs

%ctivity on the groun! is feverish. )ome 1,200 nano startups haveemerge! aroun! the "orl!, half of them in the C.). 8ompanies thatlong labore! in !ull&as&!ish"ater materials businesses are fin!ingthat they can create a stir by trumpeting their mastery over age&ol!particles, from specks of ceramic to soot. (rokerages such as $errill0 companies in the Ao" Eones

in!ustrial in!e have launche! nano initiatives. )ays $argaret(lohm, manager of eneral 6lectric's nanotechnology research an!!evelopment program : lose sleep at night because epectationsare so high.:

9o" !o these tiny molecules create big ne" pro!ucts )ometimessi-e alone is the key. 8onsi!er Au#ont's ne" ?oltron, a super&!urable "ire coating use! in heavy&!uty electric motors. f youlooke! at previous generations of such coatings through a po"erfulmicroscope, the chemical components "oul! look loosely packe!,"ith irregular spaces bet"een the molecules. This structure lea!s

the material to break !o"n more easily. ?oltron's nanoscaleparticles fill in many of the voi!s, making a stronger insulator thatlasts longer. n Au#ont's tests on electric motors, a coating of?oltron eten!e! the time bet"een failures by a factor of 10, tomore than 1,000 hours. %n! since such motors consume anestimate! 5G of C.). electric po"er, lengthening their life an!efficiency promises big energy savings. :This chemical combinationcan only be !one "ith nanomaterials,: says Hrish Aorais"any, a


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senior planning manager for Au#ont's nanotech research effort.

$ost of the early a!vances in nano "ill improve "hat "e alrea!yhave. 6amples light"eight army fatigues that resist chemical"eapons an! foo! packaging !esigne! to keep last month's lettuce

green an! crunchy.


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anticipate! # in the sector && a ;115 million offering for 7anosysnc. in %ugust && "as "ith!ra"n at the last minute as investorscoole! to a company rich in patents but still years from making aprofit. 7o" the # market appears stalle!, even for stars such as7anofilm, a profitable ?alley ?ie" hio manufacturer of optical

films, an! Honarka Technologies nc., a


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lose much of their meaning. The sciences start to merge. $any ofthe "inners in nano "ill be those that can reach across ol!boun!aries an! create novel hybri!s. sraeli biologists an! electricalengineers, for eample, have teame! up to attach !na to carbonnanotubes to create microscopic transistors. These assemble

themselves in the lab follo"ing a biological blueprint. The result isan inanimate transistor && but one that gro"s, like a ta!pole or atoenail.

Fun!ing $agnet

8ompanies that can bring such innovations to market stan! torestructure entire in!ustries. Horea's )amsung roup plans topro!uce T? !isplays featuring the most prominent buil!ing blocks ofthe 7ano %ge && carbon nanotubes && by 200. f successful, thesescreens coul! be lighter, cheaper, brighter, an! more energy&

efficient than to!ay's mo!els. The technology "oul! sprea! +uicklyfrom T?s to computer screens, even electronic billboar!s. 6 isa!!ing a ne" nano&focuse! "ing to its *BA center in 7iskayuna,7.=. The company "on't !isclose the si-e of its investment but saysa 50&member team of researchers is looking to see! nano intoeverything from me!ical technology to lighting to high&performanceturbines.

For entrepreneurs, nano spells fun!ing. ?enture capitalists haveinveste! ;1 billion in nano companies, nearly half of it in the pastt"o years. $ean"hile, government fun!ing is hol!ing stea!y at ;4.Ibillion annually, nearly e+ually !ivi!e! among %sia, 6urope, an!7orth %merica. The cash is pouring into university labs an! ne"nano corri!ors from %lbany to )hanghai an! Fukuoka prefecture in

Eapan. :%ny professor "ith his hea! scre"e! on has move! researchprograms into nano,: says reg (lon!er, a partner at $orgenthaler?entures.

$any of the early prospectors are focusing on health&care testingtools, "hich are far less regulate! than me!icines an! therapies.


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the results.


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The price of a ne" semicon!uctor fabricating plant is proecte! toreach ;10 billion by the en! of the !eca!e.

7ano innovators aren't likely to replace the silicon chip anytimesoon, but they coul! help ease the s+uee-e over the net !eca!e.

This process has alrea!y starte! "ith memory chips, the leastcomplicate! kin!. /ithin t"o or three years, !evelopers hope tomake viable memory chips from spaghetti&shape! carbonnanotubes, each one only 1 nm "i!e. Further out, engineers arelearning ho" to replace minuscule metal circuits an! gate"ays onto!ay's chips "ith ne" nano&engineere! materials. ($ researchershave built transistors "ith carbon nanotubes that promise :a hugeleap in performance "hile cutting heat loss,: says #hae!on %vouris,a researcher at (ig (lue's 7anometer )cale )cience B Technology


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#


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nanomaterials inecte! into the bo!y "on't !o harm.

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molecules. This sparks the formation of cylin!ers of carbon atoms,or nanotubes. /hile nearly invisible, these threa!s are 10 timesstronger than steel an! etremely heat&resistant.

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Csing chemicals an! beams of energy, scientists have learne! ho"to sort out an! manipulate !ifferent classes of nanotubes. )ometypes con!uct electricity, others are especially strong. )cientists are"eaving them into fortifie! string an! fabrics.

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*esearchers have been incorporating nanotubes into basicmaterials, from tetiles an! plastics to "iring on miniatureelectronic circuity. Teaming "ith biologists, they're attaching the

hollo" tubes to organic molecules an! testing them for me!icaltherapies.

4. %##


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genetically mo!ifie! foo!.

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$iracles often arrive late. 8onsi!er genomics. % !eca!e ago it

promise! sca!s of !rugs an! me!ical therapies that are stillpen!ing. $arket turmoil, public fears, or pro!uction scre"ups coul!cause !elays in nano, hol!ing up breakthroughs in energy an!me!icine for a !eca!e or more.

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The Business Nanotech