New nano rules may leave Canada out in the cold

If you ask Canadian entrepreneur Neil Gordon about new rules coming next month requiring companies to detail their use of engineered nanomaterials, he'll tell you it's just another example of his government placing artificial constraints on nanotech commercialization.

That's why Gordon is now the ex-president of the now-defunct Canadian NanoBusiness Alliance.

"If Canada is becoming the first government in the world to require companies to provide information about their use of 'potentially' harmful nanomaterials in products, then there is another reason for entrepreneurs to avoid commercializing nanotechnology products in Canada," said Gordon, who is now president and CEO of Early Warning Inc., which is commercializing a nanotech-based biosensor.

But ask science adviser Andrew Maynard about Canada's first-in-the-world nanotech regulations, and he'll tell you how they are exactly what is needed now -- before too many companies use nanotechnology in their products. Maynard advises the Project on Emerging Nanotechnologies (PEN) in Washington, which focuses on the environmental, health and ethical implications of nanotechnology.

The rules are needed, he said, even though available toxicity information on some engineered nanomaterials is "patchy."

"But even patchy information is going to be more helpful to developing informed future regulations, than no information," Maynard said.

The rules, instituted by Environment Canada, are expected to come out in February, according to a news release issued by PEN earlier this week.

Canadian companies that manufactured or imported 1 kg or more of engineered nanoparticles in 2008 will be required to provide information about how the substance is used or managed and any existing data on their physical or chemical properties. It is a one-time requirement. The Canadian government will then use the information to evaluate possible risks to the public and the environment.

The regulations would be in line with a proposed regulatory framework released by Environment Canada and Health Canada in September 2007.

One problem with the rule, Gordon said, is that there are not too many Canadian nanotech companies around to regulate. And these rules could be the nail in the coffin.

"I have observed first-hand how the Canadian government had ignored the massive economic development opportunity from nanotechnology," he said.

"The Canadian government’s informal nanotechnology policy of allocating its limited nanotechnology funding almost exclusivity to government labs and government-owned universities has created a void of Canadian nanotechnology companies which for the most part are struggling to survive or have left Canada."

It is important to remember, too, Gordon said, that the question is not simply which substances are toxic, but also whether they are toxic in the small amounts used inside nanotech products.

Many of the current research on nanoparticle toxicity expose test animals to artificially high amounts of nanomaterials.

"A fish can die from eating too much fish food," Gordon said. "If the amount of nanoparticles in a product are at some miniscule level, as is typical for nano products, then the risk must account for what is really being used -- not some artificially high amount."

But it is just this shortage of information on nanoparticles that makes these rules needed, Maynard indicated.

"This decision by Canada -- to establish the world's first national mandatory nanoscale materials reporting program for companies -- is an important step toward ensuring that nanotechnology regulation is driven by accurate information and high-quality science," he said in a news release.

U.S., at last, begins assault on batteries

If you could just tune your ears above the recent clatter and racket that passed for debate over a bridge loan for the Big Three, you might have been able to just make out the tiny baby cries of a newborn U.S. auto industry.

I live in Detroit, so I heard the slap on that baby's ass, followed by the opening shrieks of a brat already born into a disadvantaged, dysfunctional family.

You see, in the literal power struggle over the next age of the automotive industry -- the electric age -- the U.S. battery industry is arriving late.

It's not that innovation is lacking. Some of the leading research into nanotech-enabled lithium-ion batteries is being done right in my hometown. But only now has it dawned on the federal and state governments to push that innovation forward through financial aid and tax breaks. And only now have U.S. battery companies realized that they can combine some of their efforts to bring those innovations from the lab to the marketplace.

Late and late.

But hopefully not too late.

Two years and an economic lifetime ago, I covered the Detroit auto show when a proud Bob Lutz unveiled the Chevrolet Volt (PDF 219k) hybrid electric concept vehicle to a great many ooohs and aahhhs even from the jaded press.

But a few months later, at the Society of Automotive Engineers' 2007 World Congress, I peaked under the hood of all that shiny new plastic and found disparate and desparate U.S. and European engineers sweating it out for what they assumed would be second place in the race to create safe, long-lasting batteries for vehicles like the Volt.

Today, the race is still for second place, behind Asia. And, as I covered the North American International Auto Show again this year, it looks like nanotechnology has come in second, too. GM chose Compact Power, a subsidiary of the Asian LG Chem, to provide the lithium-ion batteries for the Volt. A close second was A123 Systems, whose nanophosphate formula is an important ingredient in its li-ion batteries. The reason, according to GM, was the the formula seemed too experimental, the company too inexperienced and, most importantly, the battery manufacturing infrastructure just does not yet exist in the United States.

To its credit, GM is working on building its own battery infrastructure from the ground up. Another lesson learned from Toyota. So, there is still hope for nano-enhanced li-ion batteries, as there will be room for many players, eventually.

It's about time.

Of course, not in time to save my Motown hometown from further pain. But perhaps enough to implant an embryo that will, in time, give birth to a brand spanking new auto industry.

Now Is The Time to Invest Says Penn

A press release popped into my e-mail this morning from Malcolm Penn of Future Horizons. Here's what he's saying: "Amidst all the doom and gloom, now is the time to make investments and come out of the recession strong," Penn said. By investing now companies can secure their long-term future and come out of the recession in a great position. "R&D is always one of the first things to get cut in times of economic crisis," says Penn. "But by doing this companies are harming their long term future. If they don’t continue to look forward now, they will be behind the competition in 12 months time – and find themselves in even greater trouble. While the short term gains of cost cutting are obvious, in the long run it will come back to bite. By taking the lead now companies can seize the initiative, and come out of these difficult times in a strong position." Penn was speaking ahead of the 2009 Forecast Seminar that is taking place in London.

Boy does the economy stink!

The extent of the financial crisis is still unknown, of course, and most agree that it will get worse before it gets better, but at Small Times and Solid State Technology magazine we have been gathering reports from leading market forecasters and analysts and can share what they’re telling us. I think MEMS and nanotech will weather the storm well, but it looks like some rough sailing ahead for my semiconductor friends. The good news is that market fundamentals are quite different than they were in 2001. “Staring a global economic recession in the face, will 2009 be a re-run of 2001? We think no,” said Malcolm Penn, CEO of Future Horizons, Kent UK. Penn said that downturns in the semiconductor industry over the last 60 years were always caused by excess capacity, triggered either by demand or supply side issues e.g., by over investment (making capacity overshoot demand) or a demand slowdown (whether through an inventory burn or recession) making short-term capacity exceed near-term demand. “The 2001 slowdown was unique in that it was triggered by both demand and supply-side issues, namely; the collapse of dot-com inflated demand euphoria, a 9-11 driven economic slowdown, a resultant massive inventory burn, just as a huge amount of excess capacity was coming on stream,” Penn said. “Entering 2009, we have no serious overcapacity in place (pre-slowdown utilization rates were in the 90% region), a cap ex cut back that started 12-18 months before the slowdown hit, and IC ASPs in the middle of a cyclical upward trend. In addition, IC units had been running at or below the 10%/yr long-term trend line, with no serious excess inventory in the supply chain. For once, the industry is in structurally good shape to enter a recession. This will make the 2009 downturn statistically shorter than it would otherwise have been,” Penn added. Bill McClean, President of IC Insights, Scottsdale, Arizona, believes the effect of a global recession on the worldwide semiconductor market in 2009 depends greatly on the magnitude and duration of the recession. “A severe U.S. recession and steep global recession (i.e., worldwide GDP growth of <2.0%) would probably cause the worldwide semiconductor market to show a 10% decline,” McClean said. He further states that worldwide semiconductor industry capital spending is forecast to decline 15% in 2009 after falling 24% in 2008. “Even with these cutbacks in spending, IC ASPs are expected to fall another 6% in 2009, the same as the decline forecast for 2008. However, as a direct result of these steep capital spending declines, and a capital spending as a percent of sales ratio that is likely to reach an all-time low (15%) in 2009, IC ASPs are forecast to rebound (very strongly for DRAM and NAND flash memory) and spur double-digit semiconductor industry market growth in 2010, 2011, and 2012.” Aida Jebens, Sr. Economist, VLSI Research, Santa Clara, California, said that despite all the negative sentiments about the economy, she does not believe electronics sales will be in negative territory next year for several reasons: “With the exception of 2000-2001, there has never been a case in history when an economic slowdown or recession resulted in a drop in electronics sales. The 2000-2001 period is different because it was driven by the Y2K tech boom and was made worse by the terrorist attacks. We do not have the same situation today. We simply have a very nervous sentiment because of the economy. Electronics tend to do well in a slow economy. At the consumer level, people tend to cocoon in their homes when times are tough. Instead of going away on vacation, or going out for entertainment, they tend to buy electronics. At the business level, sure there will be a pullback in spending on high-end servers, but even in recessions, businesses tend to buy computers and peripherals, and networking hardware to improve efficiency and boost productivity,” Jebens said. VLSI expects both consumer and business spending to stagnate in 2009, resulting in a very slight 3.5% growth in electronics. At this rate, worldwide electronics shipments should amount to $1.7B. Klaus Rinnen, Managing VP, Gartner, Washougal, Washington, said that Gartner now expects 2008 semiconductor growth to be ~2%, and predicts that, in 2009, the market will experience anything between a decline of 2% and growth of 1%. “In addition, we currently expect a capital spending decline of ~17% in 2009, and capital equipment to drop roughly 18%. In excess condition for all of 2008, we believe inventories will rise in 4Q, overshadowing demand and reducing production needs for 1H 2009. This will lead to a reduction in factory utilization,” Rinnen said. “Continued weakness in memory sectors combined with reduced production due to increased inventory levels are causing many manufacturers to drop spending projections. Memory financials continue to worsen, causing suppliers with cash flow problems to delay or eliminate capacity expansions. Some vendors are even postponing investments for needed technology improvements because of profitability problems.”Next week will, of course, will provide us all with an interesting barometer in the form of consumer spending in the U.S. on the day after Thanksgiving, the so-called “Black Friday.” Traditionally, it is one of the busiest shopping days of the year, putting merchants into the “black.” I'm hoping everyone is out buying the latest electronic gizmos!

Welcome to Small Tech Talk

Welcome to my Small Times blog. Since this is the first of what will hopefully be many posts, I’d like to briefly share my personal perspective on micro- and nanotechnology and my plans for Small Times as the new Editor-in-Chief. First and foremost, let me assure you that I clearly see the difference between working at very small dimensions and nanotechnology. During my 26+ years working as a technology editor, I have mostly focused on the semiconductor manufacturing industry. To give credit where credit is due, there can be no question that the true pioneers of nanotechnology are semiconductor guys. They have been working at nano dimensions for years -- the thickness of a gate dielectric on advanced integrated circuits in manufacturing today is less than 10 atoms thick, for example – and much of what we know about how electrons and ions and atoms behave at the nanoscale has come from semiconductor research work. Innovations such as the atomic force microscope and the advancements made in carbon nanotube research largely stem for such work as well. There’s a big difference though, between relentless scaling of dimensions as has been the course of the semiconductor industry (at least to date) versus what most consider the real potential of nanotechnology: changing and controlling the very essence of matter itself, often in strange new ways. Richard Feynman described this well in his now famous talk in 1959: “There's Plenty of Room at the Bottom: An Invitation to Enter a New Field of Physics.” http://www.zyvex.com/nanotech/feynman.html What’s happened over the last decade, of course, is that basic semiconductor device research and straightforward materials science has been recast as “nanotechnology” research. In some ways, I think this has been driven by an understandable desire to get on the nanotech bandwagon in order to not miss out on billions of dollars in government and VC funding. But it’s also because the semiconductor industry’s scaling has reached some fundamental limits. A new “switch” needs to be found, and nanotech offers up a tantalizing array of possibilities. A good overview of this can be found on the Intel website: http://download.intel.com/technology/silicon/nano-open-house-george-bourianoff.pdf I’ll be talking/blogging about all these kind of things, as well as some of the nonsense related to the perceived threat to public health safety posed by nano. I’ll also be zeroing in on some the dynamic work now underway at the university level. The focus of Small Times magazine, however, will be less on gee-whiz nanotech and more on practical applications and the manufacturing know-how that's used to produce devices for those applications. Progress in Microelectromechanical systems (MEMS) in particular will be highlighted. Everyone seems to define MEMS a little differently, but to me it’s an amalgamate of many diverse functions, from accelerometers to microfluidics, from energy harvesting piezoelectric devices to fuel cells, from RFMEMS to wireless sensors. As always, let me know what you think. You can reach me by phone at 603-891-9217 or e-mail at psinger@pennwell.com.