Brian Eriksen Noer reports for www.NanotechnologyInvestment.com
November 2005  

In the second of a two part report NanotechnologyInvestment.com details the current advancements in the science of Nanotechnology, and specifically as those innovations impact diverse sectors such as Renewable Energy and Homeland Defense. The emerging science is being embraced by everyone from giant corporations like Ford and Boeing, to smaller manufacturing firms like solar energy technology developer XsunX (OTCBB: XSNX). To read the full text of Part 1 of this report, please click here: http://www.investorideas.com/Companies/Nanotechnology/Articles/Driving_Force_Behind.asp  

In part 2, further sector perspectives are revealed from industry participants: John Ginder, Acting Manager of the Physical and Environmental Sciences Department with Ford Motor Company (NYSE: F); John Belk, Nanotechnologist with Boeing; Tom Djokovich, CEO of solar technology developer XsunX, Inc. (OTCBB: XSNX); and NanoDynamics Inc. CEO, Keith Blakely.  

Government and Corporate Funding

As nanotechnology redefines the landscape of many different industries, investors should be acutely aware of which companies and organizations are in receipt of government or private funding to drive their research and manufacturing activities. Corporate nanotech R&D expenditure in 2005 (exclusive of government funding) is expected to total $1.8 billion in the U.S., $1.1 billion in Japan, $296 million in Germany, and $213 million in South Korea. 

Earlier this year (January 2005) the Governor of New York, George Pataki announced that corporate commitments amounting to $2.7bn had been offered to New York State by 11 companies interested in semiconductor and nanotechnology research and development infrastructure. The companies who offered this funding included IBM, Sony, Toshiba, Samsung, (chip equipment manufacturer) ASML and a consortium of nanoelectronics equipment suppliers. 

Following Pataki’s announcement earlier in the year, in late September, IBM and Applied Materials Inc. launched their $300m partnership to develop new microchip technologies. The partnership would incorporate 80 researchers working at Albany Nanotech (a research facility affiliated with the State University of New York – funded both by the government and the private sector).  

The technologies developed by this partnership are expected to generate applications within the fields of blood testing; DNA sequencing; drug development and delivery; telecommunications; artificial intelligence software; and sensors for environmental, energy and defense applications.  

Also in late September the Canadian government announced that they would be funding $5.5m worth of research in India – an amount that will be matched by the Indian government. The project, part of Canada’s International Science and Technology Partnership Program (formed to develop research alliances and to commercialize innovative technologies with India, China, Brazil and Israel) aims to focus on the areas of biotechnology; nanotechnology; information and communication technology; sustainable energy and disaster management. 

A technology like nanotech, which is anticipated to introduce widespread changes and developments will almost certainly also cause societal changes. The National Science Foundation has granted $6.2m to Arizona State University’s Center for Nanotechnology in order to study and anticipate the societal, ethical, and unintended consequences these technological advances could have. The Center will also to study how societal demands will direct and dictate research efforts. The effects that will be studied include: privacy and security, human identity and enhancement, potential use of nanotech by terrorists, environmental and health risks, and societal and economic equity. 

Market Drivers

NanoDynamics Inc. CEO, Keith Blakely believes that the prospects for incorporating nanotechnology and nanomaterials into industrial and consumer products, along with significant use of these materials in health care (from diagnostics and imaging to antimicrobial surfaces and drug delivery) and in energy applications, are significant.  

“The continued reliance upon oil - a finite resource for energy - will drive the research and applications of nanotechnology in batteries, thermoelectrics, photovoltaics, hydrogen storage, and fuel cells.  Similarly, we believe that the need for clean water around the world will drive further investigation and utilization of nanotechnology based filtration, purification, remediation, and desalination processes and systems. And, of course, the incessant demand for improvements in personal health and well-being will provide adequate incentives to companies to develop improved materials and processes using nanotechnology for a broad range of health care applications.” 

Solar Technology Developments

Tom Djokovich, CEO of solar technology developer XsunX, Inc. (OTCBB: XSNX) agreed with Blakely that burgeoning global energy demands will help to drive nanotechnology development towards the field of renewable energy. 

“There are exciting new opportunities opening up in the solar energy markets for products that deliver performance characteristics such as increased conversion efficiencies, reduced costs per watt, flexibility of materials, light weight cell structures, the use of more readily available materials, and designs allowing the use of solar cells in common building materials to promote wide scale use of solar technologies,” said Mr. Djokovich. “By manipulating materials at the nano scale level to deliver the necessary performance requirements we are helping to move the solar energy markets towards the next generation of product applications and costs savings.” 

“The solar energy market is currently dominated by the use of crystalline wafers accounting for over 90% of the market,” Djokovich continued.  “Largely through enormous expenditures in manufacturing infrastructure of crystalline cells, costs have been reduced, but there is a shortage of available materials to fill the growth in demand and few if any further costs reducing opportunities may be available to this industry. The general market consensus is that only thin film technologies can provide the route to lower costs.”  

“At XsunX we have focused on the development of new types of thin film technologies that provide performance characteristics to address cost reduction and application opportunities,” said Mr. Djokovich. “Our Power Glass® transparent thin film cell is in development for applications in architectural glass construction, and we’re launching a new development program aimed at the development of high performance thin film cells using nano scale manufacturing methods.” 

“We are developing a new patent pending solar cell structure that sandwiches the use of two separate materials, nano-crystalline Silicon (nc-Si:H) and amorphous Silicon (a-Si:H), in a thin film structure that employs the use of 1/400th the materials used in conventional silicon wafer designs. These extremely small structures are combined to form a 4 terminal solar cell structure that holds a promising opportunity of delivering the performance characteristics of crystalline wafer cells at a fraction of the cost.”

Ford’s Nanotech Focus

In part 1 of this report John Ginder (Acting Manager of the Physical and Environmental Sciences Department with Ford Motor Company (NYSE: F)) and John Belk (Nanotechnologist with Boeing) discussed their plans to form an alliance with Northwestern University to research and develop commercial nanotechnology applications. The project will focus on clean fuel burning hybrid cars, as well as developments in specialty metals, thermal materials, coatings and sensors. 

In part 2 of this report, Ginder elaborated upon his earlier comments that in some cases new inventions will be required to enable developments in propulsion technology: hybrid vehicles; clean diesel technology; hydrogen powered vehicles; and fuel cells. Ginder is optimistic that many of those inventions will come to fruition through the areas of nanostructured materials.  

Specific innovations that are required include: battery electrodes, battery materials, fuel cell electrodes, hydrogen storage materials, filters for particulates in diesel exhausts, new catalytic materials for use in Ford’s existing products as well as future propulsion technologies. “Ford believes that the impact on our products is going to be huge,” said Ginder. “We are not quite sure where the biggest impacts are going to be just yet, but we know what the general areas are going to be.” 

Another research focus for the alliance will be in the area of biofuels. “Right now,” said Ginder, “we do not know the product’s impact.  But what we foresee is a suite of diverse technologies: it is not going to be all hybrid, all diesel, or all hydrogen, but we project that in 30 years a range of technologies will each contribute some portion of the total, resulting in the reduction of our dependence on hydrocarbon or fossil fuels.” 

“Obviously there is going to be a phasing in of these technologies, but I think the more conventional technologies will be the ones to be utilized first.” Ginder believes that the clean diesel technology is first on the horizon, “it is mandated by regulation and it is the closest to what we already know how to do. We can expect to see this technology commercially available later this decade. In parallel, we have the development of hybrid vehicles and there is opportunity there for those of us that work in research to try to improve battery performance, and that would certainly help that sector’s overall picture.”  

According to Ginder, diesels and hybrids will be commercially available in the relative near term and then farther out: hydrogen. “We have all read estimates on when fuel cells will become practical, but there are a lot of inventions required to make them viable. In fact, we are just completing our five-city, 30-car program to conduct real-world testing of fuel cell technology. The hydrogen internal combustion engine is perhaps the easiest innovation to implement, as it involves relatively conventional technologies.”

Boeing’s Hopes for Nanotechnology

In part two of this report, John Belk (Nanotechnologist with Boeing) also furthered his comments upon Ford and Boeing’s nanotechnology alliance with Northwestern University, specifically upon the reasons for the choice of Northwestern University as the scholastic partner of choice in this venture.

Northwestern University received one of the nation’s first nanotechnology centers and has been awarded hundreds of millions of dollars of nanotechnology-related funding. Ford and Boeing will be able to leverage this world-class resource through the Alliance while broadening both firms’ overall relationship with the University. “We have called this Alliance a ‘no brainer’ several times internally,” said Belk, “there is no doubt that this Alliance is beneficial for Boeing and as well as for our relationship with Ford and the students at Northwestern University.

Belk believes that the most interesting new applications in the renewable energy sector are in the area of solar cell. “Researchers have developed methods to lower costs and increase efficiency, bringing the advantages of exotic material cells closer to the price point of cells made with the more common inexpensive materials. There is a lot of forthcoming innovation within the domain of solar panels  – I don’t know when it will become commercially available, but the benefit is a much lower cost than present technologies represent. I suspect that we are going to be very pleased in the next few years with discoveries in the area of solar energy research.”

Nanotech in defense

NanoDynamics Inc. has developed and demonstrated the first truly portable solid oxide fuel cell for combat soldier use, which is capable of running on a conventional fuel, such as propane.  “The unusual performance and portability is the result of the carefully engineered integration and use of nanomaterials in the cell and reformer,” explained CEO Blakely. “Additionally, we are actively working on the application of nanomaterials in bulk thermoelectric materials, photovoltaic thin films, and thin film batteries. We are addressing the need for affordable, high quality, and precisely controlled metal, ceramic, and carbon based nanomaterials that can be supplied on a commercial scale.” 

JMAR Technologies, Inc. (JMAR) announced on October 13th that they have been awarded a Phase I SBIR (Small Business Innovative Research) grant from the U.S. Army. The grant will be utilized to support JMAR’s R&D for a compact laser system, capable of real time spectrochemical hazard analysis in the field – in layman’s terms: detecting hazardous materials from a safe, remote location. This new research will be based upon the company’s existing BriteLight dual-pulse laser technology, which is planned to be modified to provide performance, weight, and cost advantages of a field portable detection system. The BriteLight technology also features applications in nanotech scale fabrication, microscopy and soft X-ray source generation. 

Brian Noer

Brian Noer has a degree in Business and Economics from the University of Western, Ontario. His career in the financial markets spans sixteen years and several continents, including: Manager with The Bank of Montreal in Canada, Associate Analyst with the structured finance group at Moody’s Investor Services in the UK, and Editor for several financial trade magazines in the UK for both Thomson Financial Publishing and Euromoney PLC (titles include Thomson’s trade magazines “The International Securitisation Report”, and “Capital Market Strategies”, and Euromoney’s “Asset Finance International”). Brian is the Writer, Editor and Research Associate for the InvestorIdeas.com portal team.


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