01/18/2007 | Shooter

Speaking plastic microchip may be the last word in technology
By Peter Marsh Published: January 3 2007 02:00

A British company will today announce that it has secured $100m (£50.6m) to build the world's first plant for making semiconductors out of plastic rather than silicon. The technology could cut the price for electronic circuitry by up to 90 per cent and hasten the
day when cans of baked beans and items of clothing contain an "intelligent" set of spoken commands, which could replace labels. Plastic Logic, based in Cambridge, is to build the factory by the end of next year in Dresden, Germany, backed by funds from Oak Investment Partners and Tudor Investment Corporation, the US venture capital groups.

The plastic semiconductors are made using a process similar to ink-jet printing, which is
widespread in the packaging industry for producing labels. The process is much simpler and
cheaper than for silicon chips.
Plastic Logic, which was formed in 2000 and employs 90 people, has received $50m in
previous investment rounds. Its shareholders include Intel, the world's biggest microchip
company, and BASF, the world's biggest chemicals group.
Hermann Hauser, a Cambridge entrepreneur and financier who is a director of Plastic Logic,
said the semiconductors could bring about huge changes in the global electronics industry.
"It could lead to an era of truly cheap electronics in which intelligent circuitry was sewn in to
your clothing, for instance, to give you a set of instructions when you put the clothes on to tell
you what you are supposed to be doing during the day," he said.
Mr Hauser said Plastic Logic had a two-year lead on rivals. Franco-US group Alcatel-Lucent,
Philips of the Netherlands, Japan's Hitachi, Samsung of South Korea and AU Optronics of
Taiwan are working on plastic semiconductors or monitoring their development.
Tim Bajarin, principal analyst at Creative Strategies, a California-based technology
consultancy, said building the plant would be "good news" for the entire semiconductor
industry by signalling the viability of plastic microchips and providing a "new option" for the
way the industry develops in the next 30 years.
Jim Tully, head of semiconductors at Gartner, US market research group, said the possibility
that a plastic form of semiconductor could leave the laboratory for the factory floor was "very
attractive".
While silicon chips - sales of which came to about $250bn in 2006 - were unlikely to be
superseded, plastic chips could emerge as an important sector, he said.
Mr Hauser said he believed Plastic Logic could achieve $1bn in annual sales within 5-10
years. Its first products are to be a series of light, tough and flexible display screens the
thickness of a credit card.

University centre paved way for plastic microchip

The list of achievements of Cambridge University's Cavendish Laboratory - one of the
world's most prestigious centres for physics research - is about to get a little longer.
Responsible over the past 136 years for a stunning series of discoveries, from elemental
particles such as the electron to the threads of genetic material known as DNA, the laboratory
can count among its more recent breakthroughs a form of circuitry that could change radically
the world's electronics industry.
In 2000 Plastic Logic, a Cambridge-based start-up company, announced it was attempting to
commercialise a form of plastic electronics that had developed from research at the
laboratory.
By using a cheap and simple set of processing operations to build up layers of circuitry on
plastic "substrates" - the material on which circuits are formed - rather than silicon wafers
used in conventional microchips, the developments promised to slash the cost of making
semiconductors.
That was potentially a step forward of enormous significance: over the past 50 years
semiconductors have grown into a huge industry fundamental to just about every form of
economic activity.
But while Plastic Logic continued to develop further the technology behind plastic circuits
without going so far as to put its new devices into production, the ideas behind its creation
could easily be dismissed as little more than an academic curiosity.
What has given the science behind the company more substance is today's announcement that
Plastic Logic has attracted $100m (£50.6m) of investment that will fund a plant to make
plastic semiconductors - the first of its kind in the world. The factory should be in operation
in Dresden, Germany, by the end of 2008 and employ 140 people.
This will create a swell of pride among the two Cavendish professors who are closely
associated with Plastic Logic: Henning Sirringhaus, a solid-state specialist who is chief
scientist at the company and a non-executive director; and Sir Richard Friend, head of the
laboratory and one of the founders of Plastic Logic.
The Cambridge connection is reinforced by two other non-executives who have strong
Cambridge ties. They are Lord Alec Broers, a former semiconductor expert and the
immediate past vice-chancellor of Cambridge University, and Hermann Hauser, an alumnus
of the Cavendish laboratory who is one of the UK's most noted technology entrepreneurs.
Mr Hauser - who in 1978 co-founded Acorn, one of the world's first home computer
companies - is a director of the Amadeus venture capital group that was an early investor in
Plastic Logic.
However, news that a plant is to be built will create a stir far beyond Cambridge. Morry
Marshall, vice-president for strategic technologies at Semico, a Phoenix-based semiconductor
research group, says plastic semiconductors have "tremendous potential" and add up to a
"breakthrough that is waiting to happen".

The initial products from the factory will be pieces of plastic about A4 size. The basic plastic
substrate will be polyethylene terephthalate, a form of plastic used to make drinks bottles.
"I would not be surprised if Prof Sirringhaus gets a Nobel prize for his achievements in this
technology," says Mr Hauser.
By 2009 the Dresden plant should be producing 2.2m units of A4-size semiconductor sheets a
year. They will initially be used as flexible "control circuitry" for large displays the size of a
piece of paper that can hold large amounts of information - equivalent to thousands of books.
The displays will most likely be made by other electronics companies, with Plastic Logic
providing the crucial control circuitry and possibly licensing its designs.
Mr Hauser adds: "We hope to make it as easy to carry around large amounts of written
information using devices based on our technology as it is now to have easy access to large
amounts of music using an iPod or MP3 player."
The distances between adjacent circuitry lines in the plastic semiconductors due to be made in
Dresden will be 5-10 micrometres (5-10 millionths of a metre) which is a lot higher than the
nanometre (billionths of a metre) dimensions of the latest silicon semiconductors.
But under development in Plastic Logic's research operations are plastic circuits that are just
60 nanometres in dimension, says John Mills, chief executive officer, holding out the
possibility that before long the electronic characteristics of the company's plastic devices
might not be too different from those of conventional silicon chips.
At that point, says Mr Hauser, the world may be ready to embrace a new form of microchip -
based on the A4 sheets due to emerge from the Dresden plant but a lot smaller - that could be
cheap enough to do jobs for which current silicon devices are too expensive.
For instance, the chips could form part of cheap toys that tell children how they are to be used
or, depending on how they are programmed, remind them to do their homework. "Plastic
electronics could lead to a fundamental revolution in the way the electronics industry
evolves," says Mr Hauser.

Hunt for ideal site leads from Cambridge to Dresden

When Plastic Logic went hunting for the perfect location for a factory to make a potentially
revolutionary form of plastic semiconductor devices, the Cambridge-based enterprise adopted
the rigorous approach of the scientist.
It commissioned KPMG, the consultancy, to consider more than 200 potential locations
around the world.
To those who have become used to seeing much of the world's manufacturing industry
migrate to extremely low-cost regions such as eastern Europe or China, the three places that
comprised the short list may not raise quite as many eyebrows as the technology itself. But
they will prove surprising nevertheless.
In KPMG's estimation, the most favourable locations for a plant of this type were Dresden in
eastern Germany, Singapore and the state of New York. What gave those places the edge?
The reasons may intrigue other companies contemplating setting up a manufacturing base
overseas.
Dresden gained its place on the list due partly to relatively low labour costs compared with much of western Europe.
Another factor was the city's strong traditions - dating to a time before the Berlin wall fell, when itwas a leading centre in micro-electronics research for the whole of the Soviet empire.
That status has led to a series of western electronics companies setting up plants in or around Dresden, notably AMD, the Californian microprocessor company. Singapore earned its place on the list because the island state already has a strong corps of
high-technology companies - many of them with good connections to the electronics and chemicals industry. New York state has a similarly strong pedigree as a home for hightechnology
enterprises: among them IBM, General Electric and Corning, three leading US technology companies.
On offer from all three locations were lucrative government grants to defray building and equipment costs. Each hoped the handouts would smooth Plastic Logic's path to their region. But what
ultimately pushed the Cambridge company in the direction of the German city was the insistence by the federal state of Saxony - where Dresden is located - that it has sufficient expertise to prepare a high-tech building suitable for Plastic Logic's production operations in a relatively short time.
A high level of grants made available by the German government to attract new companies to
a region with high unemployment - a legacy of the communist era - also played a part. The
funding means that of the $100m that the new plant will cost to build, roughly a third will
come from German and European Union grants.