October 6, 2004    Volume 11, No. 18

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Get Ready, Here Comes Nanotechnology

Companies in virtually every industrial sector should start paying close attention to developments taking place in the fledgling field of nanotechnology, says Dr. Iwona Turlik, corporate vice president of Motorola and director of Motorola Lab's Physical Realization Research Center. Companies must look beyond the hyperbole surrounding nanotechnology and concentrate on applications that are beginning to penetrate existing product categories.

Companies that are first to apply the technology could develop a commanding market position, says Turlik. In some industrial sectors, being a fast-follower may not be a good strategy.

"In basic industries like automotive and materials, I don't know if it's registered that this is a big deal," says Turlik. "For some people it's too much hype, but this really is a major industrial revolution -- the sixth industrial revolution -- because it is a general purpose technology like steam engines, electricity and transistors. It will completely disrupt markets, industries and business models."

Nanotechnology will impact companies across the landscape of manufacturing, materials, electronics, agriculture, pharmaceuticals, energy and the environment. It will lead to "creative destruction and major economic revolutions," Turlik claims. For instance, nanotechnology will enable the production of automobile tires that never wear out. When tires last the lifetime of a vehicle, the company that is first to produce them could have a windfall. Such a development will change the dynamics of the industry.

"How are you going to sell tires to preserve your profit?" Turlik asks in an interview. "If you sell just one set of tires for the lifetime of the vehicle instead of three or four your volume will go down. What's the new business model? Would it pay off to be the first to market? In this case, I bet it must."

The tennis ball industry could experience a similar paradigm shift as a result of nanotechnology. The Wilson nano-clay composite gas diffusion barrier tennis ball lasts far longer than many of the balls currently being manufactured. Nanotechnology promises to substantially reduce the amount of money tennis players spend purchasing balls. Wilson's competitors will have to quickly learn how to manufacture an entirely new type of product.

In other industries, such as integrated circuits, there are many suppliers and being a fast second won't spell doom for a company. "There are places where nano will force you to be first and other places where the fast follower will do as well," says Turlik. "The ones who don't pay attention to it will really suffer the most."

Turlik is impressed with Nanotex, a company that has developed a new class of textile materials and whose business plan is "asset light" -- no manufacturing. By licensing its technology "they are affecting a lot of industries without building their own facility for manufacturing," she says. "That is a big change."

It's also important for investors not to get burned. Over the past 10 years, there has been an exponential growth in the number of nanotechnology publications, patents and startups. "It's like with the Internet," Turlik explains. "Everyone jumped on the bandwagon and it destroyed the industry, in a sense. You have to be very selective where you pay attention."

One nano company that was high-flying but has hit a rough patch is Flamel Technologies (symbol FLML). The company's stock price has dropped this year from $40 a share to less than $15. Flamel is developing polymer-based drug delivery technologies through micropumps and other nano-techniques. The company's stock lost 25 percent of its value in one day in late September, when it announced that Bristol-Myers Squibb was pulling out of its partnership. "Nanotech is hot, but don't get hurt," Turlik warns.

Motorola has two large nanotechnology research initiatives underway, one in materials and another in electronics. On the electronics side, Motorola is working with researchers at Cornell and Michigan University to develop a conductive "nano-velcro" packaging interconnect. The concept represents a "truly new revolutionary technology [that] completely disrupts markets, industries and business models," says Turlik.

Nano-velcro would enable the manufacture and assembly of electronics without solder or adhesives. "Nano-hooks" create a joint that is stronger than many traditional assembly methods and they are manufactured at room temperature. The technology would create a new electronic assembly process that no longer needs a stencil solder or solder reflow. "It would allow reel-to-reel paper and textile electronics assembly and create ultra-thin flexible IC manufacturing that would replace traditional IC plastic packaging," says Turlik.

Before Motorola is successful with nano-velcro, the entire electronics industry must begin producing components using the technique. "That is why I wanted to give that idea to the National Electronics Manufacturing Initiative [NEMI] because they have the population of people who make the manufacturing tools and components," says Turlik, who is on the board of NEMI, which just celebrated its 10th anniversary. "If all of them work together, we could become very competitive. We have to work with a lot of people and NEMI will be our conduit to make sure we create the industry."

In the area of mobile telephones, nanomaterials and nanoelectronics will impact optics, acoustics, displays, antennas, batteries, sensors, actuators, paints and coatings. Nanocomposites will be stronger, tougher, stiffer and lighter. Nanotechnology will lead to the creation of color-changing plastics and self-healing materials that have better surface finishes, flame retardance, chemical resistance, thermal stability and recyclability, says Turlik. The phones will use nanobiotechnology for sensing, actuating and power functions. Displays based on embedded carbon nanotubes will be larger, brighter and lower cost. Nano-scale fractal antennas will enable phones to use multiple spectra and broadband. And high-capacity nanopower sources such as advanced fuel cells and photonic energy will enable better energy storage and conversion.

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