Nantero strikes deal with BAE Systems

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WOBURN, Mass., July 19, 2004 – Nantero Inc. stretched its nanotube empire even further last week, striking a deal with the giant BAE Systems to explore how nanotubes could improve the performance of electronics in the aerospace and defense industries.

Strategic partnerships are nothing new for the four-year-old Nantero; it already has several with memory-chip makers such as LSI Logic and ASML, to see how its nanotube technology might lead to more storage capacity in consumer electronics.

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The BAE deal, however, is a radical change in direction. Nantero wants to see how nano-electronics can endure the harsh environs of the upper atmosphere and outer space, rather than simply improve memory capacity.

“The value proposition here… is very different for these products,” said Greg Schmergel, Nantero’s chief executive officer.

Until now, Nantero has mostly promoted its technology as a way to bolster random-access memory, using vast interlocking quilts of nanotubes to serve as digital storage for computer memory. Its prototype chips are also nonvolatile, allowing “instant-on” computer systems that don’t need to boot up.

The $20 billion (sales) BAE sees a very different allure in nanotubes; because the nanotubes operate as mechanical rather than electromagnetic devices, they are largely immune to the effects of radiation.

“That gets us very excited in the short-term … we’ve been looking at this problem forever,” said Steve Danziger, a BAE senior project manager working with Nantero.

NRAM chips, as Nantero calls them, are also likely to consume less power and squeeze more memory capacity into electronics. That’s exactly what aerospace contractors crave, since their business is all about building the smallest craft possible.

The first step for the collaboration will be the incorporation of Nantero’s nanotube platform into BAE’s semiconductor fabrication plant in Manassas, Va. Danziger said some Nantero researchers have already paid visits to the site, but he could not say when the integration would likely be completed.

After that, BAE engineers will focus more closely on developing specific products.

BAE began talks with Nantero earlier this year, Danziger and Schmergel said. Nantero first crept onto radar screen of BAE through various papers its researchers had published.

Several BAE customers, mostly military research offices, then recommended that the two companies get acquainted.

“It’s been a rocket ride,” Danziger said. “We’ve been really busy working together.”

Schmergel would not say how much money, if any, Nantero would see from the partnership. But Nantero has already raised $16 million in two rounds of venture capital from some of the deepest pockets in the VC world, so revenue generated from the BAE partnership (and others) shouldn’t be much of a worry.

Schmergel did say he expects Nantero to announce more deals later this year and in 2005, both with new partners and in new industries. He also expects additional demonstration products with NRAM chips to be available by next year too.

Company file: Nantero Inc.

(last updated July 7, 2003)


Nantero Inc.


25-D Olympia Avenue

Woburn MA 01801


Founded in March 2001, Nantero’s product centers on technology developed by co-founder Thomas Rueckes at Harvard University.


Data storage



Small tech-related products and services

Nantero is working to develop NRAM (nonvolatile random access memory), a portable memory chip with low power consumption, high speed and storage density better than other memory options (such as flash memory, DRAM, SRAM, etc.). The company is researching the use of carbon nanotubes on a silicon substrate. Potential NRAM users include most electronic device manufacturers. Nantero envisions NRAM one day replacing hard disks as a key means of data storage. The company plans to license its technology to chip makers.


Greg Schmergel: co-founder and chief executive officer

Thomas Rueckes: co-founder and chief scientific officer

Brent Segal: co-founder and chief operating officer

Investment history

In August 2001 Nantero received $6 million in first-round funding from: Draper Fisher Jurvetson; Harris & Harris Group; Stata Venture Partners; Alex d’Arbeloff, MIT chairman and Teradyne founder

Barriers to market

Nantero is developing an alternate technology in a field that already offers multiple memory options. The company will need to convince potential users of the benefits of NRAM over existing methods.

Selected competitors

No other firms appear to be working with the specific technology that Nantero employs, though several are exploring alternate memory systems. These include: California Molecular Electronics Corp.; IBM; Infineon Technologies AG; and Motorola Inc.

Relevant patents

Hybrid circuit having nanotube electromechanical memory


Email: [email protected]

Research by Gretchen McNeely


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