"Superconductors Ready to Deliver the Goods"
thestreet.com
Years After the Hype,Superconductors Ready to Deliver the Goods" By James Brookes-Avey
Special to TheStreet.com
12/28/00 12:50 PM ET
Fourteen years ago, Time's cover story boldly
proclaimed superconductors -- materials which lose all
resistance to the flow of direct-current electricity and
often produce powerful magnetic fields -- were set to
change the world. Investors have been keeping a patient
vigil ever since.
Finally, it looks like their patience is going to be
rewarded. After years of struggling to tame the
technology, scientists and engineers have begun to use
superconducting materials to achieve performance
improvements in high-capacity power cables and coils
for motors and generators, and filters and amplifiers for
wireless communications base stations. Other
developments that can serve as showpiece
demonstrations of the technology, like high-speed
magnetic-levitation trains, are on the horizon.
We'll take a look at some of the opportunities
technically savvy investors are finding in the field, but
first, a brief backgrounder on superconductivity.
The Coolest Technology
Superconductivity was discovered in 1911, by Dutch
physicist Heike Kamerlingh Onnes, who used liquid
helium to cool mercury to just 4 degrees Kelvin, barely
above absolute zero (the coldest temperature possible).
At such extreme cold, the metal lost all resistance to
electricity. Later, scientists discovered superconductors
could repel magnetic fields, suspending tiny magnets
aloft by no other visible means of support.
In time, as scientists gained a fuller understanding, they
saw that superconducting materials' electrons, rather
than randomly colliding and dissipating energy away in
the form of resistive heat, behaved more like
slipstreaming race cars.
Super-efficient superconducting materials promised
billions of dollars in energy savings and new engineering
marvels like efficient high-tension power lines, fusion
reactors and electric generators and motors a fraction of
the size and cost of existing models.
But the true breakthrough came in 1986, when the
critical transition temperature barrier (the temperature
below which a material must be cryogenically cooled
before superconductivity can occur) was dramatically
raised. IBM (IBM:NYSE - news) researchers in
Switzerland created a ceramic compound of lanthanum,
barium, copper and oxygen, which superconducted at
30 degrees Kelvin. Substituting yttrium for lanthanum,
creating YBCO (short for YBa2Cu3O7-d), rocketed the
critical transition temperature up to 92 degrees Kelvin.
Although still extremely cold, such a high temperature
superconductor (HTS) was well above the threshold 77
Kelvin level of liquid nitrogen (which is much cheaper,
more plentiful and easier to use than liquid helium), thus
making widespread commercial applications of
superconductors feasible at last.
Soon afterward, thousands of superconducting metals,
alloys and compounds were discovered, although mixes
had to be made just right: YBCO with 6.4 atoms of
oxygen won't superconduct, but with 6.5 atoms, it will.
Industry took note, and a host of players sprang forth,
including Sumitomo Electric Industries, Oxford
Instruments, Denmark's Nordic Superconductor,
B.I.C.C., Southwire, Conductus (CDTS:Nasdaq -
news) and Illinois Superconductor (ISCO:OTC BB).
But then temperature thresholds stopped rising. The
brittle ceramic compounds remained stubbornly difficult
to produce in consistent quantity, machine into wires
and accept high currents over meaningful lengths of
time. Stymied, America's interest largely turned to more
promising forms of science, like the Internet and the
Human Genome Project, even as the demand for
electricity swelled by 35% between 1987 and today,
and the quality of power delivered became an important
issue.
Commercial Success: The MRI
One company not deterred, though, was
Intermagnetics General (IMG:Amex - news). In
business for 29 years, IMG makes low-temperature
superconductor (LTS) wires, electromagnets and
radio-frequency coils used mostly in hospital magnetic
resonance imaging (MRI) machines, superconductors'
first commercial success.
MRIs work by impinging hydrogen atoms in the human
body's water and fat molecules with a powerful
magnetic field, then knocking them temporarily out of
alignment with a pulse of radio waves. Radiation emitted
back by the atoms when they return to their previous
attitudes builds a detailed, noninvasive picture of the
patient's soft tissues. Intermagnetics' LTS wire can be
found inside most of the world's MRI machines.
By largely sticking to its knitting, Intermagnetics has
racked up a three-year compound annual growth rate in
earnings per share of 32% -- reasonable for a growth
stock, but virtually unheard of in this field -- and is cash
flow positive. |
