Nano Tech Talk with Dr. Michael T. Gamble
August 11, 2003

Ketaki Sood, Larta's Research Economist, interviews Dr. Michael T. Gamble, Director of Scientific Programs at Fidelys, Larta's investment banking and corporate advisory services partner.

What are the challenges for the nanotechnology industry today?

Michael Gamble: Speaking as a former materials researcher and nanotechnology executive, I have identified three tough, but surmountable, challenges that face most emerging technologies and nanotech for certain: financing, driving markets, and adoption rate. In these times of scarce risk capital, only the most sound business plans are financed. Many decent business opportunities supported by rigorous-looking plans and high-profile management teams can't attract risk capital. This scarcity of money to support innovation and bring technologies to market is one of the most serious hindrances facing nanotechnology's maturity. Technology needs to be superior and/or cheaper. If it's not cheaper, because everyone is thinking about price structures and the likelihood of a near-term return on investment, it has to be truly disruptive with stellar performance.

Regarding markets, identifying a large one into which a developer and manufacturer plan to sell new products is also key to bringing new technology forward. A good example is the PC market. Electronic ICs as well as LCD and TFT displays owe much of their rapid success, developmental and financial, to the existence of this huge market.

The third member of the challenge triad is the adoption of the new technology. Anytime entrenched industries exist, even if a new technology is clearly superior and potentially disruptive, the financiers and developers of the new technology must address how much pressure the incumbent industries can bring to bear. Price pressure, by lowering existing margins, and customer manipulation are just the tip of the iceberg. The Harvard Business Review last November published an excellent article wherein they examined Intel's strategy for averting disruption. It was both interesting and scary.

How successful has the commercialization of nanotechnology been?

Michael Gamble: I don't think widespread commercialization has been realized yet. Here my perspective comes from the semiconductor industry where the products are ubiquitous. MEMS, microelectro-mechanical systems, have had more success in the commercial markets than many other exotic nanotech applications. MEMS used for switching applications in photonic communications networks have a hold now. Forward-looking killer technologies like MEMS-based very low power, re-writable, ultrahigh density storage, 200 gigabits per square inch, and nanophotonic ICs, where quanta of light race around in silicon or indium-phosphide trenches at speeds 1000 times faster than electrons in conventional ICs, are disruptive technologies that do not exist in the marketplace. But their day is soon approaching.

I'm certainly influenced by my personal experience as an executive and venture investor. Truthfully, these avant-garde technologies that I have mentioned have not done well with development or commercialization. That is not to say that the management teams have not been excellent or that the business plans have been flawed. Nanotechnology poses scientific challenges that may lead to a longer incubation period and commercialization process than what most people, like me, anticipate or desire.

Why is the mass production of nanomaterials a challenge and how can it be overcome?

Michael Gamble: Many nanomaterials can be fabricated using state of the art semiconductor processes. The equipment and manufacturing expertise certainly exist, but the manufacturing processes prove to be very expensive. When you begin to consider mass-producing something new, that requires extrapolation of state of the art methods and machinery, and you find more challenge in the uncharted terrain than you ever imagined. Mass production of certain nanomaterials may require newer and cleverer ways to manipulate uncooperative base materials and to overcome high production costs.

What in your opinion are some of the most promising applications of nanotechnology?

Michael Gamble: I'm certainly going to laugh and cry when a working, highly integrated, photonic chip becomes widely available. It is sort of a Grail application that I follow. I believe MEMS are going to continue to soar, not only for telecom applications, but also for plenty of others, storage being one I mentioned earlier. Not to be left behind are industries augmenting computing and handheld hardware. The thin film industry for displays is in its infancy. They are lighter, faster, and getting cheaper than LCD technology, yet organic light-emitting diodes (OLEDs) are poised to challenge them already. I really like the outlook for thin film technology, in general, though. Talk about a fat marketplace to sell into. These are the areas that I track and from which I look forward to great things.

Is nanotechnology the next dot com?

Michael Gamble: I hear certain potentates claim that nanotechnology is the next bubble, but I don't see that. What I see is that investors in this area need to have a great deal of optimism tempered with a fair amount of skepticism. I believe this is the mindset of the typical high-tech investor nowadays. Personally, my recent experiences have increased my level of skepticism, but hope springs eternal. There are going to be huge winners because of the disruptive potential of nanotechnology. But similar to the dot com era, there are going to be many falling by the wayside along the way.

Dr. Gamble can be reached at 505 920-4141 or mgamble@fidelys.net. An entrepreneurial technologist, Dr. Gamble's twenty-year contributions as founder, financier, director, and executive for technology enterprises earned his induction into the International Who's Who of Professional Management in 2002. He has contributed to the founding, initial capitalization, and management of several technology companies and is a Managing Member of the venture fund MC2 Enterprises, LLC. Dr. Gamble has acted as the principal research and development engineer for the Laser Interferometer Gravitational Wave Observatory, the deputy chief engineer for the gammas, electrons, and muons detector of the Superconducting Super Collider, and principal investigator for an electronics packaging thermomechanical fatigue and fracture research protocol, administered by MIT's Electronics Packaging Program.

Larta's Nano Republic Conference was held July 10, 2003 in Pasadena, California.

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