Before you call your broker with the Nanosys news, take a look at this. It's an excerpt from Nanosys' SEC registration statement, and should be required reading for anybody who is contemplating an investment in a public nanotechnology company. And, remember, Nanosys is considered one of the most-promising of all the little nano firms. When you get to the bottom, take a look at some "good news bad news." (I added the company links below, for those who want more background).
- manufacturers of substrates for time of flight mass spectrometry equipment, such as Waters Corporation;
- manufacturers of solar cells, such as Sharp Electronics Corporation and BP plc;
- manufacturers of thin film electronics, such as Samsung Electronics Co., Ltd., NEC Corporation and Koninklijke Philips Electronics (NYSE: PHG, News, Web); and
- manufacturers of memory products, such as Advanced Micro
Inc. and Samsung.
In addition, we may also face competition from focused nanotechnology companies, such as Evident Technologies, Inc., Konarka Technologies (Profile, News, Web), Nantero, Inc., NanoHorizons, Inc., Nanosolar, Inc., Quantum Dot Corporation (News, Profile, Web), UltraDots, Inc. and ZettaCore Inc. (News, Web) and other newly created nanotechnology companies.
We face competition from companies in multiple industries, as well as from the internal efforts of our current and potential partners and, if we fail to compete effectively, our business could suffer.
We compete in intensely competitive markets for end user products. The nanotechnology-enabled products we are currently developing will compete directly with products incorporating conventional materials and technologies, including traditional semiconductors manufactured on the nanoscale. We believe our potential products will face significant competition from existing manufacturers in our current target markets including:
Non-Volatile Memory. We are developing nanostructures for
non-volatile memory products for anticipated use in applications such
as digital cameras, MP3 players and mobile phones. To develop
non-volatile memory products, we are collaborating with Intel. We
anticipate that we would manufacture the products resulting from these
development efforts and would sell them to our collaborators or other
customers for integration into a non-volatile memory device.
Intel. Cool. Not a bad little company to collaborate with. But, then, here's the potential bad news.
We may also face significant competition from our current and future partners, such as E.I. DuPont de Nemours and Company, or DuPont, Intel and Matsushita Electric Works, which are assessing the feasibility of expanding their development and manufacturing capabilities and portfolio of intellectual property to incorporate nanotechnology-enabled components into their end user products. If our current and future partners expand their product offerings to compete directly with our nanotechnology-enabled products or actively seek to participate as vendors in the nanotechnology-enabled product market, our revenue and operating results could be negatively affected.
After July 2004, Intel could decide that it really doesn't need Nanosys Inside and just do it all in-house. When the big guys decide to do all the nano work themselves, that doesn't leave the little guys with much except an asterisk in business history books.