Cool Chips warming up to investors for faster path to market

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Dec. 29, 2003 — Cool Chips is looking for some cold cash.

Since its founding in 1996, Gibraltar-based Cool Chips plc has been funded by parent company Borealis Exploration Ltd. But Rodney Cox, Cool Chips’ chief executive, said the company is now looking for more than $10 million to speed its product toward commercial production.

Cool Chips’ stock climbed sharply after Rolls-Royce plc announced in July that it was taking an exclusive license to use Cool Chips in its gas turbine products. The stock, which trades over the counter, rose from $5 to $20 by September before sinking back down below 10 in recent weeks.

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Cool Chips President Isaiah Cox said the company has shown effective cooling in prototypes of the wafer-like discs, which draw on the quantum tunneling of electrons across a precisely controlled 20-nanometer gap between thin films. Such a system, the company says, would be significantly simpler, smaller and cheaper than conventional compressor-based cooling systems like those found in today’s in refrigerators or air conditioners.

Efficiencies are not being measured yet, pending completion of some thin film development work, but the company projects that the top efficiency will reach 55 percent Carnot efficiency (a measurement of the effectiveness of a heat pump or cooling device), compared with the 45-50 percent efficiency of conventional coolers, or the 8 percent it says the related technology of thermoelectric devices can generate.

“If Cool Chips is able to deliver what it promises, this technology will revolutionize our electronic heat management systems — for example in our control electronics and for the power electronics which are increasingly used to distribute power around aircraft and ships,” Rolls-Royce Chief Scientist Peter Cowley said in July.

A Rolls-Royce spokesman declined to offer a progress report, but previous efforts at commercializing thermotunneling effects for cooling applications have failed. However, Cool Chips does have a substantial patent portfolio and millions of its parent company’s dollars have been invested to bring a product to market.

Cool Chips officials said that new funding would help pay for construction of a production facility in Gibraltar. A fab capable of producing a million Cool Chips a year could be built with an additional $12 million cash infusion, according to the company’s business plan (PDF, 487 KB).

Company executives say the technology could sell in aerospace and military applications. The systems that cool delicate sensors such as infrared detectors in missiles, for example, might weigh more than 40 pounds and cost hundreds of thousands of dollars. A Cool Chip that did the same job in less space could make a missile or satellite a million dollars cheaper to launch simply by being much lighter and more compact, executives say.

Such high-margin specialty applications are part of the case the company is making to managers of hedge funds, mutual funds and other institutional investors.

“If Cool Chips can really deliver 55 percent Carnot efficiency in an operational heat pump, at the size they are discussing and at an affordable price, they will have plenty of opportunities in some very large markets,” said Doug Jamison, vice president of Harris & Harris Group Inc., a small tech venture capital firm. The electronics industry, for example, is always looking for more efficient ways of keeping computer chips cool.

However, Jamison added, researchers have been discussing thermoelectric devices and other more-efficient heat pumps for decades, but none have delivered on their commercial promises.

With no public confirmation of the performance claims, Jamison suspects that “there must be at least a few technological leaps between the proposed prototypes and market-ready products.”

David Snow, an energy analyst who became so interested in the company that he made a substantial investment himself, organized Cool Chips’ road show. Snow said that he was able to satisfy himself that the company was for real after Roll-Royce told him that Cool Chips had been meeting its milestones on time and budget. “I see these applications as the second semiconductor revolution,” Snow said.


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