By Tom Henderson
Small Times Senior Writer

June 28, 2001 — While large companies such as Motorola have benefited from Advanced Technology Program funding, about 55 percent of its awards go to small companies with fewer than 500 employees. Some small firms credit ATP awards with their success in bringing products to market.

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Ion Optics’ optical gas and chemical sensors were accelerated to market with ATP funding.

Ion Optics Inc. of Waltham, Mass., combines optical sensors with silicon chips to make gas and chemical sensors. Founded in 1994, it used a string of Small Business Innovative Research grants over the years to fund research and product development, said Brian Kinkade, vice president of marketing and sales.

In October, Ion Optics was awarded a three-year, $753,386 grant to develop low-cost, mass-market gas and chemical sensors. Existing portable technologies produced too many false positives; more accurate lab equipment was expensive and time-consuming.

In addition to providing crucial funds, the ATP award matched little Ion Optics with the Jet Propulsion Laboratory of the California Institute of Technology as a subcontractor.

“What the ATP did is take something we were paying for on a shoestring, that was moving forward at a snail’s pace, and accelerate it,” said Kinkade.

What would have been a 10-year project became a three-year project, he said. The rapid pace in turn led to Ion’s first round of venture funding, a deal it closed at the end of 2000 for $1.4 million. And that equity funding pushed Ion Optics past the R&D stage to marketing, product development and purchase commitments from original equipment manufacturers, with sales expected to begin before the end of the year, said Kinkade.

A second round of funding is targeted for late third quarter or fourth quarter. Ardesta LLC, which is the parent company of Small Times Media, was among the companies included in the first round.

“I think this is going to be one of the good, good programs ATP has been involved in,” said Carlos Grinspon, the project manager at ATP who oversees the Ion Optics grant.

SUCCESS STORY

Advanced Technology Materials Inc. of Danbury, Conn., was started in 1986 by five scientists who thought there was a market niche for a company supplying materials and equipment for chemical vapor deposition. This process is used widely in the semiconductor industry.

The founders were right — ATMI went public on the Nasdaq exchange in 1993, had $300 million in revenues in 2000 and employs 1,000 in 20 locations worldwide.

ATMI officials said the company would not have pursued this technology without the $1.7 million, three-year grant awarded by ATP in November 1999.

“We wouldn’t have been doing this research at all,” said ATMI scientist Frank DiMeo. “While the potential reward was large, the technical risk was too large for us to fund it internally. And the time to market would have been too long, as well. This would not have been created.”

“This” is a MEMS-based gas sensor to monitor gas concentrations in the chambers where silicon wafers are made. Gases etch the features into the surface of the silicon, but often gases continue to flow into the chamber after the work is finished because until now there has been no way to effectively measure the gas concentrations.

The problem is compounded by the harsh nature of the gas, which can quickly destroy any sensor installed inside.

The ATP grant partnered ATMI with the Massachusetts Institute of Technology and IntelliSense Corp. of Wilmington, Mass. The result, said DiMeo, will be a cheap sensor than can be thrown away as the gas makes it ineffective.

The grant expires in November 2002 and DiMeo said the company plans to be marketing sensors to the semiconductor industry in the first quarter of 2003.

DiMeo says that ATMI had won previous grants from the Defense Advanced Research Projects Agency and the U.S. Department of Energy, “but ATP was the most rigorous about going through our business plan, and making sure it matched the technology. They’re very methodical about their analysis.”

FACTS AND FIGURES

William Long, who owns a Maryland-based consulting firm, Business Performance Research Associates Inc, was hired by ATP to review its first nine years of operation, 1990-1998.

His 1999 report concluded:

• 39 separate peer-reviewed competitions had selected 431 multiyear research projects. They totaled $2.8 billion, of which industry committed slightly more than half and ATP the remainder.
• Counting for-profit companies and those brought in to partner with them, such as universities, nonprofit laboratories and federal laboratories, there were more than 1,000 participating organizations.
• By March of 1997, 38 projects had been successfully completed and 12 terminated for lack of progress.
• Of those 38 projects, 15 were in electronics; six in computing, information and communications; five in biotechnology; four in energy and environment; four in manufacturing; three in materials and one in chemicals and chemical engineering.
• ATP spent a total of $50 million on the 38 completed projects and 12 failed ones. One of them, called the Auto Body Consortium and studying ways to improve auto quality in the U.S., was estimated to have $3 billion in economic returns.
• 24 of the projects had resulted in new or improved commercial products.
• A wide variety of award winners had been honored by technical journals for their ATP-funded research.

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CONTACT THE AUTHOR:
Tom Henderson at [email protected] or call 734-994-1106, ext. 233.

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