current flash alternatives.
Not only do Nanochips hold a lot of information,
they're cheaper to make than flash components, mainly
because they can be manufactured in other wise outdated
facilities. Today's semiconductor devices are produced
with circuitr y smaller than 0.25 microns but Nanochip is
working with a previously outdated 2-micron fab in an
undisclosed Silicon Valley location.
Nanochip faces competition from IBM, which has
been developing a similar product under the code name
Project Millipede. Knight says there are some architec-
tural dif ferences between the Nanochip and IBM's
product but that both use a similar fundamental concept.
The rivalr y with Big Blue has lent Nanochip credibility,
Knight says, because it validates the MEMS-memor y con-
cept. If the idea takes of f, he thinks there's plenty of
room for both companies in the flash-memor y replace-
ment market.
The idea behind the Nanochip design dates to the early
1990s, when founder and CTO Tom Rust, a high-tech
veteran who founded several graphics-chip companies,
star ted studying storage applications for atomic probes.
He founded Nanochip in 1996 but it remained a one-man
shop until 1999, when Rust began seeking more funding
and additional staf f. He raised $1.6 million in several
installments by the fall of 2002 from a variety of investors,
including Jerr y Fiddler, the founder of embedded-soft-
ware developer Wind River. Nanochip received another
$1.8 million in October 2002 from AKN Technology, a
Malaysian producer of MEMS-based sensors.
In March, Nanochip closed a $20 million B round,
with investors including JK&B Capital, New Enterprise
Assoc., Microsoft and AKN Technology. Much of that
funding will go toward expanding Nanochip's produc-
tion capabilities, Knight says, as Nanochip plans to go
into pilot production next year.
Nanochip does not yet have customers. It has manu-
facturing par tnerships with AKN and with its unnamed
Silicon Valley manufacturing partner.
Some industr y obser vers believe that Nanochip's tech-
nology has real potential, especially because it does not
require the expensive materials required for flash
memor y. Still, they note that it will be a steep uphill
battle for an unknown star tup to take on industr y stal-
warts like Intel, Toshiba and AMD in the highly compet-
itive memor y arena. This has not deterred some venture
capitalists. "We look for embr yonic companies that we
believe have the potential to become serious industr y
players," said Forest Baskett, a venture par tner at NEA.
He thinks Nanochip has a "ver y exciting future."
NTAG
Person-to-Person Communications
New York, New York
www.ntag.com
P
eople often wander conferences and meet other atten-
dees. But less often do they meet someone with sim-
ilar interests. To bring together people who have things
in common, Rick Borovoy founded NTag.
Borovoy spent his master's and Ph.D. at MIT pon-
dering how to use technology to transform communica-
tions. Instead of connecting people in dif ferent places,
he was interested in how to better connect people in the
same room.
Working at the MIT MediaLab, he came up with
"active badge" technology, which enables people at con-
ferences to discover other people with similar interests.
"If you can inser t the right information when people
meet you can completely transform the conversation,"
reasons Borovoy.
Each NTag LCD badge is about the size of a business
card. It includes an RFID communications port that con-
nects to a central ser ver, a microprocessor, a proprietar y
operating system and an infrared port that communicates
with other badges.
Each badge costs about $50 to manufacture. NTag
rents them for $40 to $100 per conference, depending
on the configuration. At sign-in, conference attendees
are given an NTag to program with information who
they want to meet and what they want to get done at the
conference. An engineer might program her badge to
indicate that she's looking for software engineers with
expertise in C++ and a Ph.D. in computer science.
The badges can also store conference agendas, locations
of sessions and speaker bios. They can automatically track
attendance at sessions and provide feedback to conference
organizers. Instead of asking for a business card, an NTag
wearer can simply push a button to store another person's
business information, as well as conference materials,
brochures even PowerPoint presentations. All the informa-
tion can be accessed from a personalized web page and
stored on an attendee's local hard drive.
At a recent conference in Los Vegas, NTag pro-
grammed its badges to enter attendees in a competition,
with cash prizes for the attendees who went to the most
sessions and did the most networking.
NTag has provided badges to conferences for compa-
nies including IBM, Cisco, Genentech, MasterCard,
WellPoint and General Electric. The annual conference
market is wor th $150 billion worldwide, according to
George Eberstadt, CEO of NTag.
VOL. 2, NO. 4, 5
APRIL, MAY 2004
Copyright © 2004 Red Herring, Inc. / IC Report. All rights reserved.
7
Nanochip faces serious competition
from IBM, which has been developing
a MEMS memory product under the
code name Project Millipede.
IC RATING (scale 110)
INNOVATION
4
CAPITALIZATION
3
MARKET OPPTY
3
