2. OVERVIEW OF ACTIVITIES:Silex is a materials technology...

2. OVERVIEW OF ACTIVITIES:
Silex is a materials technology company developing the following two materials sets:
• Isotopically Engineered Materials
(The SILEX Technology – uranium, silicon, oxygen, carbon)
• Band-Gap Engineered Materials
(The Translucent Technology – solar, photonics, semiconductors,
thermoelectrics).
These materials are being developed for application to two industry sectors:
⇒ The Alternative Energy Sector
(Uranium Enrichment, Solar Energy, Thermoelectric Energy)
⇒ The Semiconductor & Photonics Sector
(Silicon Photonics / Laser, Advanced Semiconductor Materials).
Advanced materials are proving to be of pivotal importance in both the Alternative
Energy and Semiconductor/Photonics markets. Future progress in these industries is
fundamentally dependent on materials innovation. We believe the initiatives currently
underway at Silex and Translucent have the potential to satisfy several key
requirements of such materials.
3. ALTERNATIVE ENERGY PROJECTS
3.1 The Uranium Enrichment Project
(i) Market Perspectives & Demand for Carbon-free Energy
With the need to reduce fossil fuel consumption becoming more urgent in the face of
global climate change, the tide has turned in favour of increasing utilization of nuclear
power worldwide, as evidenced by several recent international studies[1]. This in turn
will give rise to increasing demand for nuclear fuel services, including uranium
enrichment. World Nuclear Association data[2] indicates steadily increasing demand
for enriched uranium in the short term and accelerating demand in the medium to long
term. Additionally, a unique situation exists in the enrichment industry on the supply
side, whereby up to 40% of the current supply base[3] may not be available beyond
2013. Even with the construction of planned new centrifuge capacity, there could be a
significant enrichment supply deficit in the 2015 time-frame and beyond. This
represents a potential window of opportunity for the timely deployment of SILEX
Technology. In light of this opportunity, GE should remain highly motivated to
commercialise the SILEX Technology as early as possible.
(ii) The Silex – General Electric Agreement Closing
The Silex-GE Agreement signed in May 2006 was subject to US Government approval
which was received on 4 October 2006. This approval was necessary to ensure the
appropriate safeguards and security measures are in place to transfer the technology
to the US and to undertake its deployment in the US. After receipt of the approval, GE
and Silex conducted a closing in accordance with the agreement, through which Silex
received a further US$15 million in addition to the US$5M payment received in June.
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(iii) The Test Loop Program – Wilmington, North Carolina
Since the receipt of US Government approval in October 2006, there has been a rapid
acceleration of Silex activities to support the Test Loop Program. The major
accomplishments to date include the following:
• The SILEX uranium enrichment test facilities at Lucas Heights have been
decommissioned.
• Equipment to be re-deployed in the Test Loop Program is in the process of being
shipped to GE’s existing nuclear facilities in Wilmington, North Carolina.
• A team of 12 key Silex staff, including scientists and engineers, are in the process
of re-locating to Wilmington to participate in the Test Loop Program.
• A major contract to develop Test Loop laser equipment was recently awarded to a
large US defense contractor.
3.2 Ultra-High Efficiency Solar Energy Cells
(i) Overview
During the previous reporting period, Palo Alto based subsidiary Translucent Inc
announced a breakthrough with the potential application of variants of its unique
patented photonics and semiconductor materials to Solar Energy conversion (refer
ASX release 6 June 2006). With ever-increasing interest in Solar Energy world-wide,
this is an important development with considerable commercial potential. However,
whilst the Solar Energy industry undergoes unprecedented expansion, widespread
utilization of Solar Energy technology has been hampered by inherently low
efficiencies and high costs relative to conventional energy sources. Translucent’s
solar energy materials have the potential to significantly improve efficiency and drive
costs lower.
Over the past three decades, the solar industry has been based almost entirely on
crystalline silicon wafer ‘single-junction’ technology, with conversion efficiency in
commercial modules inherently limited to approximately 20%. Over recent years there
has been a move towards lower production costs via alternative ‘thin film’ solar
technologies, however silicon based solar still accounts for around 93% of today’s
market[4]. Although thin film technologies offer lower production costs, their singlejunction
conversion efficiencies are generally lower (in the order of 10~15%), and their
large scale deployment is still limited by uncertainties such as long term degradation
and availability of materials (Indium and Tellurium), resulting in limited up-take of these
technologies to date.
By contrast, Translucent’s approach to solar is to bring new ‘multiple-junction’ thin film
materials to the industry which have the potential to significantly increase conversion
efficiency (perhaps by a factor of 2 or more) without increasing production costs
(possibly with a reduction in costs). Translucent’s new solar materials, which were
spawned out of its photonics materials project, have not previously been considered
for application to solar energy conversion. If successfully deployed, these materials
could represent a revolution, rather than an evolution, in solar technology. With these
factors in mind, Translucent has elevated its solar project to highest priority with a view
to achieving industry validation of solar cell prototypes in the next 6~9 months.
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(ii) Solar Cell Project Status and Plans
Proof-of-concept for Translucent’s solar energy conversion material has already been
demonstrated with narrowband photo-electric conversion. Current activities in the
solar project are continuing to focus on producing sets of prototype cells for third party
testing and industry validation. In order to facilitate this work efficiently, an industrycompatible
standard process module has been constructed at the Company’s Palo
Alto laboratory, and will soon be commissioned. Broad-spectrum solar cell prototypes
will then be produced and optimised in the mid year timeframe, with the aim of having
cell performance tested and validated by third parties most likely in the third quarter of
2007.
Depending on the outcome of the validation process, a pilot program for a solar cell
production line is planned for commencement in the second half of 2007, with initial
production from the pilot line expected to commence sometime in 2008. Ideally, this
might involve collaboration with an existing commercial solar manufacturer to reduce
time to market. The objective of the pilot production program will be to demonstrate the
scalability of the manufacturing process and confirm the economics of the technology.
4. PHOTONICS AND ADVANCED SEMICONDUCTOR MATERIALS
4.1 Silicon Photonics, Silicon Laser and Optical Interconnects
Translucent’s ‘optical silicon’ invention is the original materials development project
upon which the company was founded in 2001. The development of optically active
silicon which is fully compatible with today’s silicon chip fabrication techniques has
been a long held objective of the semiconductor industry, and is becoming ever more
critical to the continued progress of the silicon chip industry according to Moore’s Law.
In particular, the development of a silicon laser and optical amplifier (both requiring
optical gain) and silicon optical interconnects scaleable to current and future nanotechnology
nodes is of fundamental importance to such progress. We believe
Translucent’s optical silicon project is at the forefront of this field, and is moving
steadily towards achieving a complete materials solution for full opto-electronic
integration in the silicon CMOS industry.
The Translucent silicon project is part of the Electronics and Photonics Integrated
Circuits (EPIC) Program funded by the US Defense Advanced Research Project
Agency (DARPA). Under the DARPA Contract which commenced in January 2005,
Translucent is funded to develop proprietary silicon-based optical gain materials and
devices as part of the broader EPIC Program, details of which can be found at:
www.darpa.mil/mto/epic/.
Translucent is currently proceeding with Phase II milestones in this project, which will
result in the demonstration of an electrically driven Silicon Optical Amplifier (SOA)
prototype. The SOA device will potentially be used in CMOS compatible silicon-based
optical interconnects and gain elements for planar lightwave circuits. As part of the
DARPA EPIC program, Translucent is also collaborating with the Micro and Nano-
Photonics Research Group (Painter Lab) at the California Institute of Technology
(Caltech). The Caltech Painter Lab (refer to link: http://copilot.caltech.edu) is
integrating Translucent’s optically active materials into their state-of-the-art optical
microdisc resonators. This effort will potentially result in accelerated demonstration of
optical amplifier and laser devices suitable for optical signal processing in late 2007.
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4.2 Advanced Electronic Materials – High-k and SOI
Translucent’s silicon-based Advanced Electronic Materials (AEM’s) are being
developed to address key issues that have been identified by the International
Technology Roadmap for Semiconductors (ITRS) and International Sematech (the
world’s leading semiconductor industry organisations) as future technology roadblocks
to achieving roadmap targets (essentially the continuation of Moore’s Law). In
particular, the Company is targeting applications requiring Silicon-on-Insulator (SOI)
substrates and ‘high-k’ dielectric materials.
The semiconductor industry is seeking a suitable ‘high-k’ material to address the well
known issue of ‘transistor gate leakage’, a major source of excessive power
consumption in silicon chips, at the 45nm semiconductor technology node and beyond.
Recently there have been disclosures by both Intel and IBM[5] of high-k solutions for
the 45nm node. However it is not clear whether these solutions will be applicable to
nodes beyond 45nm. In any case, Translucent will continue the development of its
novel high-k material, for upcoming technology nodes. Similarly, an ultra-thin SOI
material which is scalable beyond the 45nm node is required to address ‘body leakage’
in silicon chips, that is, electrical current leakage from the device layer to the wafer
substrate which also causes excessive power consumption and heat build-up.
Although material solutions may be available for the 45nm node, we believe
Translucent’s SOI and High-k materials will prove successful in addressing these
issues beyond the 45nm node.
In addition to high-k and SOI applications, Translucent’s Advanced Electronic
Materials have been the subject of negotiations concerning a third potential
semiconductor application in recent months. This application was brought to our
attention through the enquiries of a major chip manufacturer, however the negotiations
have not been successful in reaching agreement on commercial terms. Regardless of
this, these discussions confirm our view that Translucent’s innovative materials have
the potential to solve several key issues confronting the semiconductor industry today.
Whilst the Translucent team will focus primarily on the solar project in the near term,
efforts in the SOI/high-k materials project will continue in conjunction with the Saraswat
Group in the Integrated Circuits Laboratory at Stanford University. The timeline for this
project will be reviewed after an assessment of the recent industry developments
noted above.
5. FIBERBYTE
Fiberbyte is an Adelaide-based subsidiary (90% owned by Silex) developing novel
electronics equipment for the Data Acquisition (DAQ) and Electronics Instrumentation
industries, incorporating its proprietary USB-inSync™ technology. In essence,
Fiberbyte’s USB-inSync™ technology transforms the ubiquitous USB connection bus
from a ‘dumb’ connection to a ‘smart’, more powerful and synchronous bus with greatly
improved capabilities and many more potential applications. The initial target market
for this technology is the PC/laptop-based DAQ industry, estimated to be worth in
excess of US$100M p.a. and growing. Additional larger markets have been targeted
for application of USB-inSync™ technology, in particular, the Test and Measurement
(T&M) instrumentation market.
Fiberbyte recently released its second commercial product range, and the third is soon
to be released (refer Fiberbyte website: www.fiberbyte.com), after which Fiberbyte will
resume marketing activities. Meanwhile, discussions with several major commercial
entities in the T&M and DAQ markets are evolving, with the aim of forming strategic
partnerships to accelerate adoption of USB-inSync™ technology in key target markets.
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Further information on the Company’s activities can be found on the Silex website:
www.silex.com.au or by contacting the persons listed below.
Contacts:
Dr Michael Goldsworthy (02) 9532 1331
Mr Chris Wilks (02) 9855 5404