Nanomanufacturing Product Strategy

George Thompson

The use of nanotechnology in microelectronics is starting to take hold in the microelectronics industry, and this chapter discusses some of the strategic reasoning for incorporating nanotechnology into products that will be manufactured in high volume. This discussion begins with a review of the reasons any new technology should be incorporated into a new product and then discusses the specific case of nanotechnology.

A strategy for inserting a new technology into a product requires a clear understanding of both the existing product and the new technology if the manufacturer is to avoid the common case of a successful new technology becoming a commercial product failure. A clear understanding of the reasons for a product's success in the marketplace is critical before major changes are made in the product's base technology.

When an organization is evaluating innovations from nanotechnology and their success in the marketplace, there are a few points to consider. A key point is that most customers want to buy a superior product, and the technology embedded in that product is of secondary concern. Technology by itself is of little value to the customer unless it is incorporated into a product that people will buy.

A key to developing a coherent technology strategy for a new product is to consider whether the new technology creates a simple, one-time improvement opportunity or whether a rapidly evolving dynamic technology, such as nanotechnology, is involved. It is critical to understand the difference in the opportunities and the challenges. The incorporation of a static technology will be expected to provide a one-time change in the product, whereas the incorporation of a dynamic technology will create the possibility of improving the product in the near future as the base technology evolves.

Nanotechnology is a rapidly evolving technology. Predicting trends is difficult, and sudden major discontinuities in the technology are expected. This greatly complicates the business strategy for integrating nanotechnology into new products. It is helpful to consider a few simple but important points about the introduction of a static new technology into a product, without the added complications that exist in the case of a dynamic technology such as nanotechnology. A new technology can be embedded at several different stages in a product's life cycle, ranging from assumptions made in the early R&D stages up to the time when end users decide whether or not to buy the final product. Usually a series of highly objective processes is at work, although the role of irrational processes, such as fads, should not be ignored.

Consider the case of introducing a new technology, such as a new material, into an existing product. This new product will have to compete with the other products that serve the same or a similar function in the marketplace. The two most obvious factors to consider are performance and cost. Usually the customer base will quickly notice an improvement in price or performance and will transition to the new product if the improvement does not involve major design changes or integration investments. A product with superior performance, at the same cost, will have a very good chance of gaining market share over time, and in some cases will drive an increase in the total available market.

The case of a product being characterized by only price and performance is far too simple for practical use, although most products can be described by a reasonably small set of product characteristicsfor example, function, features, performance, cost, reliability, delivery schedule, form factor (size), quantity (needed to succeed in the market), and input requirements (electricity, cooling, and so on). Other considerations include disposal costs and potential legal or ethical issues arising from any health or safety considerations related to the use of the product.

Before planning a significant change in a technology road map, the strategist who is planning to incorporate nanotechnology into a product line should begin by understanding the product's characteristics. The utility of a well-defined list of product characteristics is that it provides clear design guidance to the development team. In many cases the product characteristics are only vaguely defined, at the level of, "Is this supposed to be a sports car or a truck?" At times, a product is not defined even at this level, and the design team's primary goal becomes simply how to find an application for a new technology. Without a clear definition and without mapping customer requirements to the product's characteristics, the chance of an economically successful product launch decrease dramatically.

A review of the product's characteristics and of customer requirementsfor example, the characteristics and customer requirements for a sports car versus those for a truckmakes for a useful exercise in clarifying ideas that are both simple and well known but often overlooked by designers when they incorporate new technologies. It is critical to focus on a product as a collection of product characteristics; a successful product is a specific collection of product characteristics that customers value enough to buy at a price that provides the manufacturer with a reasonable return on investment.

Considering Future Impacts

These comments on product characteristics serve to illustrate a few key ideas involved in launching a product based on nanotechnology. It's important to note that nanotechnology is dynamic and has an uncertain future. A critical long-term strategic concern is how nanotechnology will continue to evolve in the future and its overall impact on the microelectronics industry. In addition, planners must comprehend the future impacts on their products as nanotechnology continues to evolve.

A reasonable prediction of this process requires an understanding of how the specific nanotechnology affects the final product. It is also necessary to determine in some detail which product parameters will benefit, and which may be degraded, from the application of nanotechnology. Of course, this must be considered in enough detail to explain the impact of nanotechnology on competitors' products as well.

Ideally, the future evolution of nanotechnology should lead to a continuous improvement in the final product, an improvement that the customer will value. The best example of this type of long-term improvement is in the semiconductor industry, which has achieved unprecedented growth by providing its customers with products that are "faster-better-cheaper." This industry mantra is the key to creating new markets for its products and to making existing customers happy to replace old computers with newer ones as a result of a dramatic increase in performance.

The semiconductor industry has been able to maintain this scaling of better performance and better cost for a simple reason: Smaller transistors are both faster and cheaper. There is a natural synergy between these two key product parameters that is sufficiently strong to drive sales and increase the revenues needed to support additional investments in the technology R&D and infrastructure. This model permits the continuing investments needed to develop new and superior products. As mentioned earlier, this cycle, which results in the number of transistors doubling on a typical chip approximately every two years, is called Moore's Law. Its origin lies in the natural synergy that exists for semiconductor products between cost and performance as the size of the transistors is reduced, driving both the technology and the economics forward.

Identifying Potential Synergies

For the technologist who is considering the strategic impact of nanotechnology on a product, the first step may be to determine the potential synergies that exist between product parameters as a result of the introduction of nanotechnology. Which product parameters may be degraded by nanotechnology must also be understood. In addition to creating new applications and markets, the key is to identify potential synergies that will drive product improvement so rapidly that existing customers will want to upgrade to the newer technology.

One must always consider the risk that product acceptance may be driven by highly subjective factors. In the longer term, sustained market growth is more likely for products that successfully compete in the market-place based on an unambiguously objective product superiority. The product should maintain compatibility with existing architectures, infrastructure, and product applications so that customers can easily incorporate the new products into their existing applications, in addition to possibly creating new applications.

Implicit in the definition of product characteristics is the ability to manufacture the new products in sufficient quantity on a schedule that meets the needs of customers, rather than the needs of a material or technology supplier. The manufacturing issues surrounding products that incorporate nanotechnology are complex because of the novelty of the technology. It is critical to ensure that a stable supply line to the customer is established, because a rational customer will frequently choose a reliable product that just meets the technology, cost, and schedule requirements over a potentially superior product that is not certain to be delivered on time.

Nanotechnology today presents a number of somewhat intimidating challenges to any technologist considering its use in a product. Given that nanotechnology is in its infancy, one must also consider that after nanotechnology is initially incorporated, the product may soon become obsolete as nanotechnology improves. This presents an opportunity to continuously improve the product in lockstep with the advances in nanotechnology, which in turn creates options for new markets. It also presents opportunities for competitors to leapfrog ahead of your product.

A clear understanding of the impact of nanotechnology on the final product characteristics, an awareness of the rapidly evolving nature of nanotechnology, and consistency with existing architectures, infrastructure, and metrics are all prerequisites for the successful formulation of a nanotechnology manufacturing strategy.