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THREE MILITARY OFFICERS WERE CONVERSING QUIETLY IN AN ELEVATOR just outside a secure area of the pentagon. Enter a man in a black suit and sunglasses, carrying a black bag. He says to one of the officers, "If you had a chance to integrate alien technology into your weapon systems, would you?"
"Oh, yeah," replies one officer. "It's got to be better than what we have."
More than a year later, Jeffrey Jacobsen, the man in the black suit, still loves telling that story. He even renamed his company Alien Technology in 1998 because several focus groups swore they had heard the name before and equated it with superior technology.
They were wrong about the first point and may be right about the second. Alien, based in Morgan Hill, Calif., has developed a remarkably innovative process for embedding chunks of preprocessed chips into sheets of flexible plastic. Forget about clunky circuit boards covered with solder. This may be the 21st-century way of weaving chips into just about anything. Early applications range from flat-panel displays, smart "tags" for monitoring inventories, and even wearable electronics.
Jacobsen, a 23-year veteran of the display business, is staking Alien's future on a pragmatic business insight. He has watched many companies fail in the attempt to make very large flat-panel displays. Instead, he plans to begin at the bottom, building tiny displays for smart cards, and work up.
"I think this is the most credible path to penny-a-chip technology, and we'll do even better than that over time," says Arno Penzias, an Alien investor and board member who won a Nobel prize for the detection of cosmic background radiation. Chips may be cheap but by the time they are connected to a system, it could cost as much as $1 to add a chip to some devices. "With this, we'll change the way we look at electronics and what you build smarts into," Penzias says.
Most laptop computer screens use a thin film of integrated circuits deposited on glass to control the light-emitting elements. But glass is fragile, making large displays excruciatingly difficult and expensive to build. Alternatively, trying to put transistors directly on plastic requires such high heat that the plastic typically melts.
Alien's process skirts those issues entirely by decoupling into two relatively easy steps the nightmarish manufacturing task of putting integrated circuits on a thin, flexible backing. Six years ago J. Stephen Smith, a professor at University of California, Berkeley, and a graduate student began exploring how to mix different semiconductors. Along the way, they came up with an idea they called NanoBlocks. Rather than processing all materials together, they used standard semiconductor techniques to chop up a semiconductor wafer already patterned with circuits into tiny chunks measuring between 10 and several hundred microns across. (A human hair measures about 100 microns wide.) Working in those dimensions is a snap for current lithographic tools, which routinely etch silicon with features that measure a few tenths of a micron. Even better: They could test that all the circuits worked before slicing up the silicon wafer.
Every silicon NanoBlock looks like a pyramid with its tip chopped off, a shape caused by the crystalline structure of silicon. Smith and his student stamped inverted versions of that shape onto a plastic sheet. Then they sprinkled the NanoBlocks into a solution--think of those snow-globe paperweights--and bathed the plastic sheet in the mixture. Gravity pulls the NanoBlocks neatly into the indents. Once all the holes are filled, the plastic sheet rolls on, giving any NanoBlocks still floating in the solution another chance to find a hole.
The company that Smith started in order to commercialize the idea, Beckmen Display, spent two years on the technology and efforts to build flat-panel displays. But the manufacturing skills Smith needed proved daunting. When Jacobsen joined the company in September 1998, he jettisoned the large display effort. "I looked for the highest volume, simplest thing we could build," he says. The answer: smart cards.
Later this year, Alien plans to begin rolling out its first prototype sheets of chip-studded plastic for use in displays measuring three-quarters of an inch on the diagonal. Gemplus of France will insert these displays in its smart cards to remind the owner of how much value is left on the card.
Some analysts have marveled that Gemplus, which makes 2 million cards per day, or 40% of the world's total, was willing to trust an unproven supplier like Alien. Jean-Pierre Gloton, a cofounder of Gemplus, says that there are few other choices. "We required displays that are very, very flexible and low cost," he says. He hopes that between 5% and 10% of Gemplus' smart cards will have Alien screens by 2002.
Jacobsen hopes that Alien will be profitable by then and ready to make displays for pagers and cell phones. By 2005, Jacobsen daydreams out loud, Alien will be ready to try displays for high-definition television screens. In the meantime he will rely on $80 million in capital from a venture group led by New Enterprise Associates.
In addition to making plastic sheets with chips for other companies, Alien will license its manufacturing techniques. Jacobsen has struck partnership deals with a half-dozen display and specialty chipmakers, including Philips and DuPont. Alien's process attracts them because it does away with costly batch-production of screens in favor of producing continuous rolls of chip-laden plastic sheets. It costs $600 million to get a new flat-panel display plant up and running. Alien estimates a comparable factory using its technology will cost a tenth of that.
Penzias, who headed Bell Laboratories before becoming a partner at New Enterprise Associates, points out that Alien's technology is ultimately a low-cost way to embed electronics in just about anything. "Imagine putting a tiny electronic tag on your glasses," Penzias says. If you forgot where you put them, your personal computer could page your glasses and find them. In a few years' time, your computer could probably direct a robotic dog to go and fetch them.
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