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Sept. 24, 2002 — Even with a recently closed funding round that netted Nanochip Inc. $1.8 million and a $15 million Series C round already under way, Gordon Knight, the MEMS memory developer’s newly installed chief executive, admits he has his work cut out.
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“What do I worry about?” said Knight. “What keeps me up is execution. Today, one of the biggest things is getting the funding so you don’t run out. With this next round of funding we have to get to a customer validation point. They’ve got to get beta samples in their hands and go back to investors and say, ‘We like it, we want to buy some.'”
Combine that challenge with the recent corporate scandals that undermine even the most pious CEO’s credibility, a tight venture funding climate and fierce competition to develop the next ‘big thing’ to replace today’s memory chips and Knight, 61, will have to call upon every day of his 25 years of storage industry experience to be successful.
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“My goal is to make this a successful company and to get the product out,” Knight said. “One of things I’ve been working hard on (projecting), because of the embattled CEOs, is I’m very honest and believe in fair and honest business practices.”
This attribute will come in handy since all the company’s manufacturing will be done at MEMSTech in Singapore, where business is conducted face-to-face and personal reputation is as important as profits. This is where Knight’s more than 70 trips to Japan will come in handy. His Asian experience was an important reason behind his hiring, said Tom Rust, Nanochip’s founder and chief technology officer.
With three storage company startups behind him — Terastor, Optimem and Maxoptix — Knight was also the logical choice to guide Nanochip through initial production and into the market, Rust said.
“I immediately liked him the first time,” Rust said. “I don’t think I could have found a better person.”
This is most people’s first reaction to Knight, said Bill Dobbin, vice president of finance at what is left of Terastor after a lengthy court battle with a rival put the company out of business. Dobbin, who as a co-founder of Terastor worked closely with Knight for years, admires Knight’s ability to be both a scientist and a person others look to for leadership.
“He’s always been a two-phase thinker really,” said Dobbin. “A technologist and people person. And what that really means is he has unbelievable connections with everybody in (the data storage) business.”
This is important since the product Knight has been hired to commercialize is a silicon-based MEMS memory that, like its competitors developing molecular and nanotube-based memories, offers significant improvements over today’s memory products, particularly flash memory for portable devices.
With 32 megabyte transfer speeds it is faster than flash, nonvolatile, uses 10 times less power, is denser, cheaper — 10 cents per megabyte vs. 45 cents for flash — and, when it hits the market in mid-2004, will fit into the same pin-slots as today’s products.
“The customers we are talking to say we enable brand new types of handheld devices that flash won’t be able to do,” Knight said.
Nanochip’s memory works on the same electromechanical principals as IBM’s Millipede memory, where an actuator armed with an atomic-scale tip serves as the read/write head.
Unlike IBM, however, which uses thousands of these actuators, Nanochip’s simplified architecture works well — at least on paper — in the punishing environments of portable consumer devices. Also, it can be manufactured using abandoned CMOS fabs since the smallest feature, outside of the nanosize tips, is two microns.
Knight believes these advantages give Nanochip a significant edge over competitors. Nanochip’s chips, he said, will be cheap enough to compete and possibly unseat today’s products. And being inexpensive is the name of the game for any next-gen memory maker regardless of technology, according to Steve Cullen, director of semiconductor research at In-Stat/MDR.
“There are bunch of technical problems but if you assume that they solve the tech problems the biggest problem they are going to have is shipping it competitively,” Cullen said.
To this end, one of Knight’s initial challenges is getting things back on track. The company is about a year behind schedule because of technical challenges surrounding the reading back of data from the data storage substrates. With those issues now behind them, Nanochip has recently transferred all its development efforts to Singapore in order to prove the production viability of what has, up until today, been strictly a laboratory product.
But this is why Knight was hired, Rust said. He has a long list of industry and venture capital contacts to call for money, advice and contracts. While at Terastor, for example, he and Dobbin raised more than $100 million. And, as a graduate of both MIT and Stanford — and a veteran of Xerox PARC — he knows the best minds in the business, or, more importantly perhaps, they know him.