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Technology Stocks : Nanophase Technologies (NANX)
NANX 1.733-1.0%Apr 7 4:00 PM EDT

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To: DD™ who started this subject8/17/2000 9:09:36 AM
From: Jerryco1  Read Replies (1) of 322
 
Nanotechnology starting to look more interesting:

Nanotechnology Development May Drastically Alter Computing

Aug. 15 (Houston Chronicle/KRTBN)--Jim Tour isn't the CEO of some razor-sharp
Silicon Valley computer company, but he knows how to talk like one.

The Rice University professor and co-founder of Molecular Electronics Corp.
doesn't hold back when predicting how the technology he and his colleagues are
developing will change the face of computing.

"I want to see us run up the tail of every chip maker around," Tour says. "This
will change the landscape for some huge, global industries."

That statement is tantamount to throwing down the gauntlet before the Intel's
and IBM's of the world, but Tour thinks he can back up the challenge. Molecular
Electronics' work developing atom-size computer components is among the most
advanced in the country and may produce working prototypes in the next 12 to 18
months.

It may lead to a computer processor thousands of times faster than today's
Pentiums, or memory chips with millions of times more capacity than all the PCs
Compaq builds in a year. Tour says these components will use just a fraction of
the electricity today's machines use, cost next to nothing to build -- and on a
surface smaller than a dime.

Tour's work is relatively well known to his colleagues in the field, but the
formation of MEC is a sign that he and Mark Reed, company co-founder and Yale
University physicist, are getting closer to market.

"We're at a point where it's just a technology problem that will be solved by
some smart graduate student or myself one of these days," Tour says. "This is
not far out. This is going to happen."

Tour and Reed were classmates at Syracuse in the late 1970s but didn't begin
working together until 1991. At a conference they discovered a common interest
in developing nano-scale materials, substances built out of just a few atoms
that can be manipulated to build more complex structures. The two received a
three-year, $1.5 million grant from the Defense Advanced Research Projects
Agency the following year and landed larger grants over the ensuing years.

Nanotechnology sounded more like science fiction than science in the early
1990s, even among theoretical physicists and chemists. Tour says he was laughed
at, even ridiculed, by his peers for his work.

"Scientists can be extremely closed-minded," Tour says. "I've had reviews from
my peers slamming my work for years."

Dick Smith, director of science and technology forecasts for Washington,
D.C.-based research firm Coates & Jarratt, says the field did not get much
respect in the past.

"Five years ago, people would laugh at you if you said you believed in that
mumbo jumbo of nanotechnology," Smith says.

But in 1996, two of Tour's Rice colleagues, Rick Smalley and Robert Curl, won
the Nobel Prize for their discovery of the basic building elements in
nanotechnology. Suddenly the field's reputation was kicked up a notch. Earlier
this year the federal government launched a $500 million research initiative
into nanotechnology, giving the field another claim to mainstream fame.

The friendlier outlook on nanotechnology and Tour and Reed's progress led them
to incorporate last fall. With the cooperation of Rice, Yale and Pennsylvania
State University, the company secured rights to much of their
university-sponsored research, and is busy filing patents. MEC now has a dozen
or so employees spread out between the three campuses, with plans to move into a
new facility near Yale this month.

The headquarters is officially in Chicago, where recently named Chief Executive
Harvey Plotnick lives, but as the company grows it could be anywhere, including
Houston.

"Houston doesn't have the glow of Silicon Valley, but you pay a lot to be in
Palo Alto," Tour says. "We would fit the model of a Silicon Valley startup, but
we don't need to be there to do what we are going to do."

Plotnick says the company would need to consider the usual mix of factors when
deciding where to set up shop, including business climate, tax issues and cost
of living factors. He has already heard an earful about the benefits of Houston
as a location.

"You guys from Houston are the biggest civic boosters I've ever met," Plotnick
says. "There's not a person I've spoken to down there who hasn't started a
conversation with, `Don't you think this is a good place to bring your company?'
"

MEC is not alone in commercializing nanotechnology. Technanogy Inc. of Newport
Beach, Calif., is developing applications for rocket propulsion and alternative
energy sources, while Nanophase Technologies of Burr Ridge, Ill., is using the
technology to improve the performance of sun screen and eyeglass lenses. These
efforts are in areas relatively far afield from MEC, however.

MEC's real competition includes projects funded by Hewlett-Packard at the
University of California at Los Angeles. That team has developed a molecular
switch and a computing architecture that could be used for future nano
components. Motorola, Hitachi and IBM all have research efforts under way, but
their results have not been as widely reported as MEC's or those at UCLA.

The only other incorporated business in the field is California Molecular
Electronics Corp., a San Jose firm that offers a handful of technologies for
license, but none that appear to be directly linked to Tour's work. The company
did its own initial public offering over the Internet earlier this year.

"We're all taking slightly different approaches, but they're all roughly
parallel," Plotnick says. "But we think ours will win. We think we have most of
the best minds out there, but they have some good ones, too."

MEC stands out from the pack for several reasons.

 Tour and Reed have one of the longest track records in the field and

have some of the earliest patents for the technology. A number of their former
students are now with competing labs, another testament to their longevity.

They have also been the first to hit a number of technology milestones. They
were the first to record electrical current through a single molecule, the first
to demonstrate a molecular switch that can turn on and off, and the first to
demonstrate a molecular form of DRAM, or computer memory, that would actually
hold data for 10 minutes after the power is turned off. Silicon DRAMs hold data
for just a few milliseconds after power is shut down.

The fact that the company has been able to raise venture capital is also a
significant milestone, says Dan Hutchison, president of VLSI Research, a
microchip industry research firm.

"In the past, there's been nothing interesting going on, like someone getting
venture funding," Hutchison says. "But if a company has actually managed to get
VCs interested, that's different. They may not be entirely sure of the
technology, but they're willing to bet on the people involved."

The hiring of Plotnick to handle the corporate side of MEC is another milestone
of sorts for MEC.

Plotnick doesn't have the high-tech startup experience that one might expect of
the CEO of a company like MEC. He studied physics in college, but made his
professional mark as the owner of a publishing house. He has a passion for the
basic sciences, and even owns Albert Einstein's original manuscripts on his
theory of relativity.

"He took his favorite hobby and made it his career," Tour says.

 He helped bring in many of the venture investors and is leading talks

with a number of possible corporate partners.

Plotnick's experience as a member of the board of directors at the University of
Chicago also gives him an understanding of the culture of academics, a culture
that makes MEC a very different kind of technology startup.

"If a CEO came in and said, `I own you guys, you should hire who I tell you to,'
it just wouldn't work out," Tour says. "For scientists, there's something about
rebelling against authority that's in our culture."

Tour knew Plotnick would be a good fit when he heard about his arguments with
attorneys over which of Tour's patents should fall under the company's umbrella.
The attorneys wanted to include all of his work, while Plotnick insisted it just
be those related to molecular computing.

"When I heard how he stood behind me on that, I realized he really understood
our culture," Tour says.

The nanotechnology product most likely to be developed for the mass market first
is a DRAM, Hutchison says. There's a mass market for the devices, which are
found in every computer, and they are among the least complex to build.

"If you can pull it off and make a memory devices using nanotechnology, you
would blow away anything you could do with hard drive, CD drives or anything
else out there," Hutchison says.

The product will most likely be a combination of existing silicon technology and
molecular technology, but it will be a first step toward more complex equipment.

Smith says that nanotechnology still has a long way to go before one can expect
to walk into Radio Shack and buy a molecular memory chip, however.

"We don't know yet how we will address, much less solve, the enormous problems
of shielding these components from vibration and radiation, programming,
communication, etc.," Smith says. "Even after the first assembler is developed,
it will require years, perhaps decades, of lab testing before a commercial
product could reach the shelves."

Hutchison agrees that there is much work yet to be done. While the building
blocks of a molecular computer are quickly becoming a reality, the techniques
for connecting those components and manufacturing them will be even trickier, he
says.

"The chip industry wouldn't be anywhere if it wasn't for the planar process that
lets you put multiple pieces on a circuit board," Hutchison says. "Prior to
that, the transistor was just a good replacement for vacuum tubes."

Smith, who is paid by Fortune 500 companies to create strategic plans about
technology that look five to 50 years into the future, says he has yet to see a
nanotech company that he would invest in. But he admits he hasn't been privy to
MEC's business plan.

"I think (Tour) has got as much chance as anybody. He was one of the people who
was playing in the game in a serious way very early," Smith says. "No matter
what happens, people will say he was a pioneer. We just don't know yet if
they'll say he was an Edison."

WHAT IS NANOTECHNOLOGY? A nanometer is one billionth of a meter, or three to
four atoms wide. Scientists are learning how to connect atoms and molecules
together to create nano-scale mechanisms that create switches or transistors, or
even small machines that can perform complex tasks. The mechanisms will be
extremely small and extremely fast, yet relatively inexpensive to make because
they will be built through a chemical process called self-assembly.

SOME NANOTECHNOLOGY LINKS:

 --www.about.com/nanotechnology

A search engine that compiles various sources and articles.

 --www.jmtour.com

Rice Professor Jim Tour's research home page.

 --www-ece.rice.edu/halas

Rice Professor Naomi Halas' research home page.

 --www.nano.gov

The National Science and Technology Council's site for nanoscale technology,
including information on federal initiatives.

By Tom Fowler
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