CCM SECTOROPTICS
WITH MICHAEL SONI

Good Things Come in Small Packages - Nanotechnology    

Monday, September 12, 2005 

“Imagine the possibilities - materials ten times the strength of steel, shrinking all of the information housed at the Library of Congress into the size of a sugar cube – detecting cancerous tumors when they are only a few cells in size.”  In January 2000, then President Bill Clinton offered that glimpse into the sector’s potential in a speech introducing the National Nanotechnology Initiative (NNI). Of the sectors actively researched by CCM, the field of nanotechnology represents one of the most diverse and compelling fields in terms of its potential to revolutionize they way in which atoms and molecules are understood and used as the fundamental building blocks of matter.

Research and development opportunities are quite literally unlimited in terms of the number of potential scientific applications that can employ nanotechnology. For instance, the fields of biotechnology, chemistry, physics, information technology, engineering, and manufacturing are all actively studying nanotechnology. Nanotechnology is also expected to lead to a wave of profound innovation in industries such as energy, aerospace, healthcare, agriculture, just to name a few.

Nanotechnology research and development is receiving significant funding from the federal government (estimated funding stood at $0.98 billion for fiscal year 2004 – nearly 2x the amount of funding committed to researching and mapping the human genome). Projected funding for fiscal year 2005 stands at approximately $1.08 billion (source: National Science Foundation). It also estimates that $4 billion in taxpayer funds have been committed to the sector.

Foreign governments have also announced major commitments to the technology: the EU is estimated to be just behind the U.S. in terms of funding ($0.95 billion) followed by Japan ($0.90 billion) and the rest of the world combined ($0.90 billion). In aggregate, fiscal year 2004 global government R&D was estimated at just under $4 billion.

There are currently a number of pure play, publicly traded nanotechnology companies. These include: Nanophase Technologies (NANX – NASDAQ), Nanometrics (NANO– NASDAQ), Altair Nanotechnologies (ALTI– NASDAQ), and Isonics Corp. (ISON – NASDAQ).  Firms with significant nanotechnology business unit initiatives include heavyweights such as Intel (INTC- NASDAQ), Hewlett-Packard (HPQ – NYSE), Agilent (A- NYSE), and Applied Materials (AMAT – NASDAQ).

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Disclaimer

Michael Soni, is President & CEO of Cronus Capital Markets- a firm specializing in sector research, intelligence, and media. At the time of publication, he had no positions in any of the securities mentioned in this column, but holdings can change at any time. CCM transforms “Top-Down” research into intelligence by identifying sectors within the capital markets that, in addition to their inherent strengths, will benefit from participation in larger trends and cycles.

CCM enhances SectorOptics, by deconstructing and filtering the capital markets, in order to identify sectors experiencing a higher frequency of opportunities. By enhancing SectorOptics, CCM focuses the lens with which capital market sectors are viewed, resulting in greater clarity.

Under no circumstances does the information in this commentary represent a recommendation to buy or sell stocks. While he cannot provide investment advice or recommendations, he invites you to send your feedback – click here to send him an email.


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