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Feb. 17, 2009: Scanning headlines from Japan this week: the Mirai project’s blazing SRAM simulations; Toshiba and Fujitsu’s HDD handoff, Renesas’ rebellious union; and what might be the next fullerene.

Mirai vaults SRAM sim over the “brick wall”

Japan’s Mirai project (Millennium Research for Advanced Information Technology) and software firm Jedat say they have devised a simulation tool that predicts SRAM chip operation much faster than conventional methods, without requiring prototypes and paving the way to better yields, notes the Nikkei Business Daily.

Three years ago Mirai launched a “Robust Design of Transistor” project to figure out manufacturing processes and design structures that overcome the “Red Brick Wall” of transistor variability, which increases as circuit dimensions are scaled down and is a limiting factor in system chip integration. Part of their work involved evaluating variability in such robust transistors, using a “test element group” (TEG) on a 200mm wafer with 65nm-based SRAMs; measuring characteristics of each transistor determined normal distribution of variation, which could then be plotted independently by chipmaker and manufacturing technology used.

Combining these data and the information about the actual SRAM structure, Mirai came up with a method to precisely simulate a 256kbit SRAM’s operations, predicting the chip’s behavior to the degree of the chip’s actual measurements. But the simulation was “extremely time-consuming,” the paper notes.

Enter Jedet, which says it can accelerate the process through a proprietary method called “sample screening through boundary learning,” which reduces the amount of data needing to be processed. The result is a SRAM simulation tool that generates results 600× faster than the conventional Monte Carlo method of semiconductor device simulation. For designers, this means they will be able to use the TEGs, not fabricated SRAM prototypes, to analyze transistor variability and predict SRAM operations, and correct design flaws at the process development stage, thus resulting in better yields once chips are manufactured.

Toshiba buying Fujitsu’s HDD ops

Toshiba is said to be purchasing Fujitsu’s hard-disk drive operation; neither firm indicated a monetary value for the transaction that is slated to close by the June quarter, but reports suggest a pricetag of ¥30B-¥40B (US ~$330M-$430M).

Under proposed terms, Toshiba will take a ~80% stake in the entity, which comes with production facilities in Thailand and the Philippines, and should absorb it entirely as a wholly owned unit within a year or two, notes Japan’s Nikkei daily.

For Toshiba, the move boosts its production footprint and lowers procurement costs for items such as magnetic heads and disks, the paper notes. The company also will utilize Fujitsu’s high-speed data read/write technology for its solid-state drives, an area in which it projects sales surpassing ¥100B/year by fiscal 2010. Fujitsu’s strong position in servers offers inroads here too, the paper notes. Overall, the Toshiba+Fujitsu HDD operation will command about 20% market share (they ranked 4th and 6th, respectively, according to data cited by the paper).

For Fujitsu, the deal (and a simultaneous sale of magnetic disk production to Showa Denko) spells the end of its magnetic head production and hard-drive related hardware. It will take a ¥30B writedown for the sale to Toshiba (split evenly between facilities/assets and personnel, the Japanese paper notes), pushing net losses to roughly ¥50B for the fiscal year ending in March, vs. a ¥48B profit in the previous fiscal year.

Renesas breaking union ranks?

A rebellious move from Renesas Technology’s labor union concerning springtime “shunto” pay negotiations could have reverberations across other unions and industries across Japan, according to the Nikkei daily.

Renesas workers won’t join the Electrical Electronic & Information Union’s unified demand for a >¥4500 monthly wage hike, the paper reports. The chipmaker is projected to lose about ¥200B (US ~$2.18B) in the current fiscal year.

The 8000-strong Renesas union is a core member of the influential industrial trade union umbrella group, the paper notes — thus, others including Oki Electric’s union are seen likely to follow suit.

The move is uncommon but not unprecedented, particularly in these times. Similarly, Mitsubishi Motors Corp.’s union won’t demand a payscale raise, in opposition to the Confederation of Japan Automobile Workers’ Unions stance on springtime wage negotiations.

Cheaper, flexible organic memory via inkjet

Nissan Chemical Industries and Kyushu U. have codeveloped a process to fabricate organic memory devices from inkjet printing, with application seen in smart tags, reports the Nikkei Business Daily.

The material is a polystyrene-gold dust combination of nanoparticles deposited by inkjet onto a substrate “sandwiched” between Al thin-film electrodes. Data stored as “on” and “off” states are variably set by exposing the material to different voltages; three 5V pulses sets it to a low-resistance state, while a >10V pulse sets it to a high-resistance “off” state. The gold particles make contact with the branched ends of the polystyrene resin’s molecular structure, enabling stable resistance value so the device can function as nonvolatile memory and retain data. The devices when fabricated are said to cost a tenth of that of silicon memory, the paper notes.

Only 2500b/cm2 is achievable now, but Nissan Chemical aims to improve this before market readiness, seen in fiscal 2010. The bendable devices can be printed onto films such as food wrapping, conceivably recording information to aid delivery and traceability. The company also wants to add an antenna to make a contactless smart tag akin to an RFID device that can be controlled with radio signals to read/write data from an external unit.

Nippon Mining strips FPD film biz

Seeing no demand rebound on the horizon and thus no profitability, Nippon Mining & Metals says it will exit the market for chip-on-film substrates for flat-panel televisions sometime this year, according to the Nikkei daily.

For about five years the company has produced and shipped samples of a double-layer copper foil laminate on plastic film upon which can be mounted semiconductor devices. But demand has slumped in step with sales of flat-panel TVs as well as prices for the materials.

A new carbon substance?

Reseachers at Tohoku U. say they’ve discovered via computer simulation a brand-new substance made entirely of carbon atoms, joining well-known structures like fullerenes and carbon nanotubes. Results are published in the current issue of Physical Review Letters.

The new substance, a three-dimensional structure comprised of rings of 10 carbon atoms, is similar to that of a geometrically proposed structure called a “K4” crystal; Evaluations by supercomputers using “first principles calculations” method show the structure’s metallic properties should conduct electricity. Prof. Tadafumi Adschiri et al. are currently testing synthesis of the substance; their work is sponsored by the Japan Science and Technology Agency.

The list of substances made solely of carbon is a short one: diamond, graphite, amorphous carbon, and more recently fullerenes and carbon nanotubes. The new substance has a 3D crystal structure like diamond, and is the first to also have metallic properties. A group led by Tadafumi Adschiri, a professor of chemical engineering, has begun testing synthesis of the substance. (It’s worth noting that the fullerene, too, led a hypothetical mathematical existence until it was proven to exist in nature as the C60 molecule.)

February 13, 2009: Nanosys Inc. has announced results of its initial studies using a novel silicon nanowire mucous membrane drug delivery device. These devices have a nanostructured surface that relies on adhesive properties known in physics as van der Waals forces of adhesion.

Results of initial studies published in the American Chemical Society’s Nano Letters, outline the device’s ability to significantly improve drug delivery to mucous membranes such as those in the nose, intestine, eyes, vagina and mouth.

Mucous membranes have long been a target for drug delivery due to their large surface area and rich blood supply. However, nature has designed these membranes to also be efficient barriers to foreign substance penetration, such as drugs. Mucus, which is constantly produced by these tissues, is moved across the surface by tiny beating hair-like structures called cilia

Removal of a substance floating in the mucus of the nasal cavity can be as fast as 10 minutes, for example. Previous attempts at overcoming this barrier function relied on chemical modification of the delivery vehicle to better adhere to binding elements within the mucus. Nanosys’ silicon nanowires will adhere instead to the cells underneath the mucus, the actual targets for drug delivery. This critical feature allows for a longer residence time, improved local concentrations and better absorption of target drugs by the tissues, Nanosys said in a news release.

The team, led by Hugh Daniels at Nanosys and Tejal Desai and Kayte Fischer at the University of California, San Francisco, also quantified the amount of mucosal shear force the silicon nanowire-based devices could withstand before being eliminated, and demonstrated it to be at least 100-fold better than a non-silicon nanowire device.


(Source: Nano Letters)

February 3, 2009: The shapes of some of the tiniest cellular structures are coming into sharper focus at the Howard Hughes Medical Institute’s Janelia Farm Research Campus, where scientists have developed a new imaging technology that produces the best three-dimensional resolution ever seen with an optical microscope.

With this new tool, scientists can pinpoint fluorescent labels in their images to within 10-20nm — about 10× the size of an average protein — in all three dimensions. The researchers say they now have an extremely powerful technology that will help reveal how biomolecules organize themselves into the structures and signaling complexes that drive cellular functions.

Their new method adds a third dimension to a cutting-edge form of light microscopy that scientists at Janelia Farm have used for the last two years to create two-dimensional images that pinpoint the location of fluorescently labeled proteins with extremely high resolution. To push this form of microscopy to the next level — three-dimensional imaging — the researchers borrowed a strategy widely used in industry to measure vanishingly small distances, such as the subtle variations in height on the surface of a computer chip.

Janelia Farm scientist Harald Hess and his colleagues adapted that technique, known as interferometry, to make it compatible with the fluorescent molecules often used by biologists to visualize proteins. When interferometry is combined with the super-high resolution photoactivated localization microscopy (PALM), researchers can see the three-dimensional architecture of cellular structures in extraordinary detail.

“This will be a good tool to really untangle things right down to the molecular structure level,” said Hess, who led the development of the new technology in the applied physics and instrumentation group at Janelia Farm.

Hess and collaborators at the National Institutes of Health, Florida State University, and Janelia Farm, who call their new tool interferometric photoactivated localization microscopy (iPALM), have already created detailed images of three-dimensional structures previously not resolvable with light microscopy. Their “photo gallery” includes images of the microtubules that give cells structure; the two layers of a cell’s outer membrane; and the focal adhesions that attach cells to their environment. Some of these images are included in a research article published in the February 2, 2009, issue of the Proceedings of the National Academy of Sciences describing the new technique.


The 3D distribution of membrane proteins within a cell revealed through iPALM imaging. The vertical position of fluorescently labeled VSVG proteins has been color coded, with red molecules being the deepest and purple the highest. (Image courtesy of Howard Hughes Medical Institute)

January 28, 2009: Single-atom quantum dots created by researchers at Canada’s National Institute for Nanotechnology and the University of Alberta make possible a new level of control over individual electrons, a development that suddenly brings quantum dot-based devices within reach. Composed of a single atom of silicon and measuring less than one nanometer in diameter, these are the smallest quantum dots ever created.

Quantum dots have extraordinary electronic properties, like the ability to bottle-up normally slippery and speedy electrons, that allow controlled interactions among electrons to be put to use to do computations. Until now, quantum dots have been usable only at impractically low temperatures, but the new atom-sized quantum dots perform at room temperature.

Often referred to as artificial atoms, quantum dots have previously ranged in size from 2-10nm in diameter. While typically composed of several thousand atoms, all the atoms pool their electrons to “sing with one voice,” that is, the electrons are shared and coordinated as if there is only one atomic nucleus at the center. That property enables numerous revolutionary schemes for electronic devices.

Research project leader Robert A. Wolkow described the potential impact saying, “Because they operate at room temperature and exist on the familiar silicon crystals used today’s computers, we expect these single atom quantum dots will transform theoretical plans into real devices.”

The single atom quantum dots have also demonstrated another advantage – significant control over individual electrons by using very little energy. Wolkow sees this low energy control as the key to quantum dot application in entirely new forms of silicon-based electronic devices, such as ultra low power computers. “The capacity to compose these quantum dots on silicon, the most established electronic material, and to achieve control over electron placement among dots at room temperature puts new kinds of extremely low energy computation devices within reach.”

Results of the work were posted Jan. 27 in the online edition and published in the Jan. 30 edition of Physical Review Letters.


Four atomic quantum dots are coupled to form a “cell” for containing electrons. The cell is filled with just two electrons. Control charges are placed along a diagonal to direct the two electrons to reside at just two of the four quantum dots comprising the cell. This new level of control of electrons points to new computation schemes that require extremely low power to operate. Such a device is expected to require about 1,000× less power and will be about 1,000× smaller than today’s transistors. (Credit: Robert A. Wolkow)

Jan. 27, 2009 – Qimonda’s filing for bankruptcy, while perhaps not entirely surprising, is nonetheless sending shockwaves through the industry, and it’s likely that no matter what happens, the consolidation of the DRAM industry is now underway.

Qimonda says it plans to reorganize and restructure while maintaining focus on its buried wordline technology, after a “financing package” involving Infineon, Germany’s Saxony state, and banks led by an unidentified “leading Portuguese financial institution.” Investors, predictably, were ruthless, cutting QI stock by more than half.

Rumors had been swirling for months, fueled by Micron’s takeover of Qimonda’s share in Inotera, a JV with Taiwan’s Nanya Technology. Profitability had been a problem for some time, though; Infineon spun off Qimonda in 2006 to carve out the memory operations from the rest of its semiconductor business. And while its trench technology for DRAM had reached effective end-of-life, its new buried wordline technology hadn’t gained enough traction, pushing the firm even further behind the competition, noted iSuppli analyst Nam Hyung Kim, in a statement. Moreover, Qimonda’s smaller fabs than competitors mean higher cost structures, compounding the problem of simultaneous cash burn.

Qimonda’s insolvency is already unsettling to Infineon, which still holds ~77% of Qimonda despite repeated efforts to reduce that stake, saw its stock drop in the teens following the news. Also, Taiwan’s Winbond Electronics and Inotera Memories, both of whom make DRAMs on a contract basis for Qimonda, have a combined $129M exposure to the firm, the bulk of that from Nanya and Micron, notes Reuters. Even Mosaid, a Canadian IP firm, says it will feel an impact.

And there is also a regional impact of economic and job losses — 12,200 employees worldwide, mostly in Europe; the Portugal connection comes via Qimonda being that country’s biggest exporter in 200, notes Jim Handy of Objective Analysis notes in a research report.

In the greater DRAM market, Qimonda will only mildly help oversupplies since it accounts for just 5% of total DRAM production, notes Kim. Qimonda held a 9.7% share of unit shipments in 3Q08, though, so Kim does project a slight dip in DRAM bit shipments in 2009, down to <30% from previous 35% expectations. In specific sectors, Kim sees most impact in graphics (where Qimonda accounted for 26% of 3Q08 shipments) and servers (15%-20% shipment share).

“If Qimonda exits the DRAM business, their competitors are likely to prosper while their partners will suffer. Should the company remain intact, they are still more likely to be taken over than not,” writes Handy. “In any event, we anticipate that, by the end of 2009, there will exist at least one less DRAM maker.”

by Bob Haavind, Editorial Director, Solid State Technology

The global economy will remain in the doldrums for at least a year, well into 2009 at least, analysts and economists agreed at the Industry Strategy Symposium in Half Moon Bay, CA. But views diverge on where it goes from there, ranging from a big boom starting in 2010 to a lengthy period of stagflation, with interest rates possibly hitting 16%.

The most upbeat of all was Bill McClean, president, IC Insights. “Every recession in the last 30 years has been followed by a boom in semiconductors, every time,” McClean exclaimed, showing how strong revivals for chips had followed five downturns over the past three decades.

While many speakers urged caution about the next few years because this recession involves an unprecedented breakdown in world financial markets, McClean ticked off a litany of factors suggesting a strong rebound ahead in spite of the current malaise. First, he cited the huge and growing fiscal stimulus: $850B in the US, $586B in China, $267B in the Eurozone plus $458B in the UK, $111B in Japan, and $8B in India. China is giving subsidies for people to buy cell phones and plasma TVs. “There’s even a stimulus package in Jamaica,” he added.

Aside from this, there are record low interest rates; oil prices are low; and pent-up demand is growing for automobiles and electronic products, he explained. He agreed that it is still tough to get loans, but data show that credit markets are unfreezing.

As a result, he sees at least double-digit growth for semiconductors in 2010, followed by a boom in 2011. But until then, he sees semiconductor revenues down 17% in 2009, with the second half of the year being 50% stronger than the first half, and a big fourth quarter for electronic products. Unfortunately, McClean said, while downturns tend to start in the first quarter, this one kicked in during the fourth quarter of 2008, the worst time of the year for the electronics industry.

The big issue in this downturn is pricing, not capacity, McClean said. He expects a record amount of production capacity to be taken offline this year (at least 3%), which will help raise ASPs. Capital spending will only be 15% of revenues, down some 30%, he believes, well below the trend line. The last time there was low capex in DRAM (in ’04 and ’05) it jumped 32% in the following year (2006). As a result of the underspending, McClean expects a big jump, at least a 20% increase, in capital spending by chipmakers in 2011. Foundries have been holding back spending on equipment to help boost ASPs, and as a result he expects revenue/wafer to increase after a steady decline over past quarters.


Worldwide IC wafer capacity changes (200mm equivalents)

Fixing the “broken” memory market

Several speakers, including McClean, see the memory market, which has been driving equipment sales over the past couple of years, as broken and in need of major restructuring.

“Natural selection doesn’t work in DRAMs. Hynix should be gone. ProMOS and Powerchip should be gone. Sixty cents for a 1Gb DRAM — Samsung is selling them for the cost of the crazy package!” McClean said. He noted, though, before chiding South Korea or Taiwan, that the US government is backing GM and Chrysler.

“Memory is not a business, it’s a hobby for Asian politicians,” Dan Hutcheson, CEO, VLSI Research commented. Too many producers with too much capacity, he said, is leading to “an ASP-driven sales decline and profitability collapse, with production below variable cost.”

The industry must rationalize the number of suppliers. In DRAM, the top four gained market share in 2008; in NAND flash, he said, none of the suppliers can make money. And after the top five there are none doing over $1B in business — yet it costs about $3.5B to build a memory wafer-processing plant, and it takes that much in revenues to pay off 20% a year for five years.

“Even Samsung doesn’t have a large enough market!” Hutcheson said.

Nevertheless, he cited a recent briefing given to VLSI by memory market expert Jim Handy with some hope for the future. Nine competitors had to split up a $25B market in 2008, he said, and the result will be that prices will have to rise in ’09. Capex is expected to decline sharply this year, and won’t get back to 2007 levels until 2012 or later.

Dan offered a prescription for the memory makers based on a quote from Don Valentine, a veteran venture capitalist in the industry: “Whenever you find yourself in a deep hole, quit digging.”

Randy Bane, VP/chief economist, Applied Materials, agreed that the memory sector needs restructuring. He sees cuts in 200mm capacity of 45%-50% by 2010 from 2007 levels. He believes that the whole industry needs restructuring. Semiconductor profitability erosion and capital destruction will lead to broad consolidation, he said, pointing out several joint manufacturing ventures in DRAM and flash.

“Memory makers have consolidated manufacturing at larger-scale sites,” he explained, adding that smaller sites also will have to consolidate.

Still, he did cite some hope of a revival ahead for memory makers. In DRAM, DDR3 (double-date rate) is being ramped and will far exceed DDR2 by the end of 2009, he said. DDR3 is far superior, he believes, with lower-cost, power, and voltage, and is faster as well. It will go far beyond server farms, becoming ubiquitous, and accelerating new applications.

“It will make memory profitable again,” he believes.

SanDisk sees emerging markets: SSD, slots

Sanjay Mehrotra, SanDisk president/COO, presented the view from inside the memory implosion. In 2007, he said, revenues peaked at $16B while there was $12B of capacity expansion. Capex rose from 40% to greater than 70% of revenues in 2007.

SanDisk has a 50-50 venture with Toshiba for two large 300mm fabs which are being gradually filled with production cut to 70% of capacity until 2010-2011, he explained. The focus will be on new technology and cost reduction. In 2009, there will be a 32nm production ramp, and a shift to 3 and 4 bits/cell implementation. Multi-die stacking also helps lower production costs.

Right now, he said, there are about 700M cell phones with flash slots, but this will rise to 1B by then as users increase music and video downloads.

In addition, he cited Gartner/Dataquest research indicating that by 2011, 1 in 5 computing devices will have solid-state disks (SSDs) instead of hard drives. Controller/system expertise is the key to this market, Mehrotra said, and multi-level NAND is required. There are important emerging markets in netbooks as well as notebook computers, with applications involving digital imaging. He sees a 117% CAGR over the next five years for SSDs.

SSD memory is 5× as fast as hard disk, boots twice as fast, can run applications as much as 10× faster, and is 400% more reliable, according to Mehrotra.

“Blockbuster alone moves 3 exabytes of movies annually,” he said, “and now they’re going to HD.”

Slot media will be widely available in stores like Walmart and Best Buy, and slot music cards will be capable of holding full albums of music. Slot radios with 1000 pre-loaded songs (selected by Billboard) will be available for <$100, with $40 for an extra slot that could hold another 1000 songs. This media can also be put into MP3 players, he noted.

The flash industry has been pushing ahead of Moore’s Law on circuit density, but he also cited the work on putting multiple bits per cell. SanDisk is moving from 2 bits/cell now to 3 bits/cell, and will go to 4 bits/cell in the future, providing 16-level advanced controller technology to write and manage data.

He agreed the technology is getting much tougher due to physics challenges with steadily fewer electrons per cell, and that’s why there is intensive research on phase-change nanomaterials and 3D. The ultimate 3D, he believes, will be the stackable cross-point diode array, with peripheral circuits at the bottom of the array, but this is still a few years off.

Weathering the downturn: Technology, not capacity

Bob Johnson, research VP, Gartner, laid out the conditions for financial viability for the semiconductor industry:

– Profitability,
– Sufficient cash generation to fund needed investments,
– Funds to support R&D to stay competitive,
– Ability to weather major industry cycles, and
– Access to needed capital.

As for weathering the current downturn, Johnson feels the fabless companies, foundries, and Intel are in good shape — but all the rest are in trouble.

He tempered this by pointing out that although profits are tenuous for 2009, there will be high cash flow due to depreciation on tools bought in 2005-2007. He also expects a big jump in capex in 2010 and 2011 due to underspending the next couple of years. In recent times, Johnson pointed out, memory makers have provided 40%-60% of total capex, but it has been undisciplined investment. Memory has always gone through boom-bust cycles, but he sees it as different this time. Memory makers are now a group of stand-alone companies with revenue growth anemic at best, going into a recession in a condition of weakness. In the past, parent companies could prop them up, but now they have been spun off. With NAND weak and DRAM flatlining, Johnson sees the potential for running out of cash. He predicted that after a $150M infusion from Saxony, Qimonda had at most two more months to go without help from Infineon. (Only a week after ISS, Qimonda filed for bankruptcy to enable it to restructure.)

Although there may be some consolidation, Johnson believes there may be more cooperation rather than outright M&A activity.

A slow turnaround for the semiconductor industry may begin in 3Q09, suggested Klaus Rinnen, managing VP, Gartner, but he doesn’t see a sustainable recovery until 3Q and 4Q in 2010.

“There are no good signs for 2009 in any end-market sector,” Rinnen said, including data processing, communications (both wired and wireless), consumer electronics, and automotive. He expects all to hit bottoms in 3Q and 4Q of this year. The US led the decline, and he believes the US must lead the recovery.

Equipment makers will see some early turnaround in 4Q09, Rinnen believes — but again, he says, a sustainable recovery won’t begin until 3Q and 4Q of 2010. By then a new cycle of memory investment should start and foundry capacity utilization will rise again, triggering equipment buys. By 2011, he expects all sectors to be up again.

Rinnen showed a chart mapping the decline of revenue/sq. in. of silicon, peaking at $42 in 1995 and sliding down to $26 by 2012, about equal to 1986. He suggested that chipmakers may choose to limit supply to force up ASPs again, and he expects less buying of equipment for leading-edge chips.


Revenue per in2 of silicon — pressure on margin impacts below line costs.

The target markets have slowed from 17% growth in the ’90s to perhaps 8% now, Rinnen believes.

“How much capital intensity do we need?” Rinnen asked. With 17% growth, chipmakers were spending $0.22-$0.24 for every $1, so now at the 8% rate there has been overspending, he said. Memory spending of $0.45/$1 is unsustainable, he commented, and he pegged logic at about $0.17/$1 and foundry at $0.18/$1. He expects this capital intensity to decline going forward. As a result, R&D spending by equipment makers will drop $8B-$12B over the next four years — just when more R&D will be needed.

Rinnen had advice for both chipmakers and tool vendors. He believes chipmakers should focus on technology rather than just capacity. They must evaluate if Moore’s Law still makes sense, but he pointed out that technology leaders are also profit leaders. The industry must increase the rate of consolidation, he said, and it must seek radical improvement in manufacturing efficiency.

Capital equipment suppliers must prepare for survival in a slower-growth era, in which they will have fewer customers but with deeper pockets. Vendors should diversify into allied markets, and maximize R&D efficiency through alliances and collaboration. He suggested they consider licensing technology in some cases rather than creating it.

Madoff vs. Bernanke?

The most downbeat outlook of ISS ’09 was presented by David Townes, managing director/cofounder of Needham & Co. He emphasized that the views were his own and not of the company. Everyone knew bad news was coming when Townes opened with a WC Fields quote: “Start each day with a smile, and get it over with.”

Today’s stimulus will be tomorrow’s problem, he believes, as the government struggles to cushion a depression (he purposefully did not call this a “recession”). He believes in the next few years we will see hyperinflation in the US >10% annually and maybe reaching 16%; and he believes the US dollar may decline precipitously, and may be replaced as the global standard by a basket of alternative currencies.

Invoking Thomas Jefferson, Townes said that banking institutions are more dangerous to our well-being than standing armies. Since 1972, when the US closed the gold window, Townes believes the dollar has lost 98% of its value. “Even T-bills are highly speculative,” he suggested, and he believes that equities need to decline another 50%. He called the fiscal and monetary “debauchery” as bad as anything in the 1930s. Furthermore, US deficits of some 14% of GDP are now being echoed globally.

He suggested that while Madoff lost $50B, Bernanke may lose $10T!

The Dow Jones should bottom out about 4000, Townes suggested.

Is there any hope? In spite of the torrent of bad economic news, Townes said that just prior to ISS ’09, 325 companies had shown up at the Needham Growth Conference. It’s hard to keep a good industry down. — B.H.

by Paula Mints, Navigant Consulting

The gloom in the current global economy needs no rehashing (though, I will belabor a few points), and it’s clear that the downturn will have an affect on the market for solar electric systems. Unfortunately, the global economic downturn is not the only situation currently affecting demand. When Spain added a 500MWp cap to its extremely popular feed in tariff program, it essentially cut ~1GW from the market for solar. Germany, which recently changed its program significantly by adding triggers as a control mechanism, stranded an additional ~1MWp. Both countries are trying to control domestic markets that had exploded, becoming out-of-control and very expensive. Feed-in tariff programs, proven to be the most successful market stimulation tool, are also extremely expensive for the countries that must support them. Elected governments tend to take this seriously, particularly when programs balloon out of control and module/system prices go up instead of down.

With overall market shrinkage a fact, the PV industry has a problem separate from the global recession. Where do you put 1-2GW of product now?

The PV industry has come to rely on Europe to consume >75% of its products — again, primarily into Spain and Germany. Unfortunately, as with any industry, a reliance on one market or customer for a majority of sales leads to an unbalanced and unhealthy market situation. Figures 1-2 provide a picture of the solar market from a demand and supply perspective for 2007 and 2008. Regarding supply for both years, manufacturing typically follows the market and low-cost areas of manufacturing, and has migrated to Europe (market) and Asia (low-cost manufacturing).


Figure 1. 2007 regional supply and demand: 3073MWp.


Figure 2. 2008 regional supply and demand (estimated): ~5000MWp.

We’re all in this together

Currently there is inventory being held by manufacturers and PV-selling channel participants (selling channel inventory is primarily in Europe), with the beginnings of cancelled orders, layoffs, smaller markets along with tighter credit, and slowing economies (globally) — a slowdown in demand, and therefore sales, is inevitable given the macro and microeconomic realities. The good news is that solar has been through tough times before (most of its history has been one long tough time), and can return to its roots and make it through these current tough times. PV manufacturers uniformly lost money until 2004, and this is not necessarily the situation (even in a downturn) that they are returning to now.

The bad news is that many of the new entrants missed the 30-year climb to profitability and are not prepared for what is to come — that is, lower selling prices and lower margins, held inventory, cancelled orders, and expensive overcapacity. Many new entrants expected unlimited demand; since they were able to sell capacity before it was commercially viable, these participants are in for a shock, or at least an unpleasant surprise.

Demand in 2009, and perhaps longer, is expected to slow significantly. Despite this, demand of 14%-20% is forecast — and this is reasonable even considering all the varied and unpleasant circumstances. First, demand for off grid systems continues, and the off-grid market is already cost-effective without subsidies. Second, growth in Germany, though constrained, continues, along with growth in other European countries. Finally, the US, despite its economic woes, shows promise in the utility application with states such as Florida making solid commitments.

In most industries, growth of 14%-20% would cause rejoicing. In the photovoltaic industry, which grew >50% in 2007 and ~60% in 2008, it will likely be a letdown. The table below provides a conservative and accelerated forecast for PV industry growth through 2012.


PV industry forecast 2007-2012 (MWp). Columns and rows may not add due to rounding.

Economic downturns, though painful, can (and often do) lead to business and technology innovation. This in no way refers to the extraordinary pain felt by those suffering on an individual basis from foreclosures, job losses, rapid deterioration of retirement savings, and the difficult economic choices that come about in recessionary times. For the PV industry, the silicon shortage led to easing of the risk profile that had constrained thin-film growth, allowing for new entrants and a maturing of current thin-film technologies. The silicon shortage also encouraged crystalline manufacturers to accelerate manufacturing techniques for better use of silicon.

The current slowing in demand will lead to necessary price decreases (system and module), thus forcing lower manufacturing costs and the maturing of new business models. An accelerated downturn will lead to industry consolidation and tough decisions about technology investments. However, despite everything, the PV industry has achieved a degree of market momentum — and this momentum is unlikely to dissipate, subject to constraints though it may be.

Paula Mints is principal analyst, PV Services Program, and associate director of the energy practice at Navigant Consulting. E-mail: [email protected].

January 23, 2009: Researchers at Battelle have come up with a nanotech-based smart coating that can reveal where corrosion is forming on metal even though one can’t see the degradation with the naked eye.

Ramanathan Lalgudi, a principal research scientist, and Barry McGraw, a program manager, both of whom work in Battelle’s Advanced Materials Applications Department, were working on a nanomaterial project when a new application for their work jumped out at them.

They were attaching groups of chemicals on the surface of nanomaterials and studying their effectiveness towards the environment. That led them to the idea of using the same technical approach to detect corrosion. What if the corrosion product on a material could react with the functional nanomaterials?

The end result: A true early corrosion detection method. They created a smart coating derived from the functional nanomaterial that could be applied between a primer and topcoat and fluoresces once a corrosion product is generated from the metal. In this case, the metal is aluminum, but the chemistry can be tweaked for other metals.


Battelle’s Smart Coating would make it possible to detect corrosion before it can do damage. (Photo: Business Wire)

Any metal object begins to falter as it corrodes. The Department of Defense estimates that corrosion of its equipment costs $10 to $20 billion per year. If one can repair metal before it is demonstrably compromised, the savings could be astronomical in terms of time, energy, material and money.

Lalgudi said the smart coating could even be married to a primer or integrated with the scanning device. Battelle has a provisional patent for the intellectual property and though the material is two to three years away from commercialization, Lalgudi and McGraw and their business line colleagues are seeking partners to help take it to market.

January 21, 2009: A range of complex surgical operations necessary to treat stroke victims, confront hardened arteries or address blockages in the bloodstream are about to be made safer as researchers from the Micro/Nanophysics Research Laboratory at Australia’s Monash University put the final touches to the design of micro-motors small enough to be injected into the human bloodstream.

A research paper, published January 20 in IOP Publishing’s Journal of Micromechanics and Microengineering details how researchers are harnessing piezoelectricity, the energy force most commonly used to trigger-start a gas stove, to produce microbot motors just 250μm wide.

Methods of minimally invasive surgery, such as keyhole surgery and a range of operations that utilize catheters, tubes inserted into body cavities to allow surgical maneuverability, are preferred by surgeons and patients because of the damage avoided when contrasted against cut and sew operations. Serious damage during minimally invasive surgery is however not always avoidable and surgeons are often limited by, for example, the width of a catheter tube which, in serious cases, can fatally puncture narrow arteries.

Remote controlled miniature robots small enough to swim up arteries could save lives by reaching parts of the body, like a stroke-damaged cranial artery, that catheters have previously been unable to reach because of the labyrinthine structure of the brain and catheters’ lack of mobility. With the right sensor equipment attached to the microbot motor, the surgeon’s view of, for example, a patient’s troubled artery can be enhanced and the ability to work remotely also increases the surgeon’s dexterity.


Photo of the micro-motor prototype showing the Φ241 μm helically cut stator, 1mm stainless-steel ball as a rotor and the PZT element. (b) Magnets were used to increase the friction coupling preload. (Source: Journal of Micromechanics and Microengineering)

As Professor James Friend, leader of the research team at Monash University, explained, motors have lagged behind in the age of technological miniaturization and provide the key to making robots small enough for injection into the bloodstream. “If you pick up an electronics catalog, you’ll find all sorts of sensors, LEDs, memory chips, etc that represent the latest in technology and miniaturization. Take a look however at the motors and there are few changes from the motors available in the 1950s.”

Friend and his team began their research over two years ago in the belief that piezoelectricity was the most suitable energy force for micro-motors because the engines can be scaled down while remaining forceful enough, even at the sizes necessary to enter the bloodstream, for motors to swim against the blood’s current and reach spots difficult to operate upon.

Piezoelectricity is most commonly found in quartz watches and gas stoves. It is based on the ability of some materials to generate electric potential in response to mechanical stress. In the case of a gas stove, the ignition switch on a stove triggers a spring to release a ball that smashes against a piece of piezoelectric material, often kinds of crystal, which translates the force of the ball into more than 10,000 volts of electricity which then travels down wires, reaches the gas, and starts the stove fire.

As Professor Friend explains, “Opportunities for micro-motors abound in fields as diverse as biomedicine, electronics, aeronautics and the automotive industry. Responses to this need have been just as diverse, with designs developed using electromagnetic, electrostatic, thermal and osmotic driving forces. Piezoelectric designs however have favorable scaling characteristics and, in general, are simple designs, which have provided an excellent platform for the development of micro-motors.”

The team has produced prototypes of the motors and is now working on ways to improve the assembly method and the mechanical device which moves and controls the micro-motors.

The method, which involves treating carbon nanotubes with fluorine-based molecules, is reported in the Jan. 9 issue of the journal Science. The research was jointly led by Graciela B. Blanchet, a research fellow at DuPont, and George Malliaras, Cornell associate professor of materials science and engineering and the Lester B. Knight Director of the Cornell NanoScale Science and Technology Facility. Helen Lu, a research chemist at Dupont, and Mandakini Kanungo, a former Cornell postdoctoral fellow now at Xerox, also worked on the project.

January 12, 2009: Illumina Inc. and Oxford Nanopore Technologies Ltd. have formed a profit-sharing alliance under which Illumina will exclusively market, sell, distribute, and service BASE Technology products developed by Oxford for DNA sequencing, the companies announced in a news release.