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2 Materials Development and Commercialization Process AETHOUGH THE IMPORTANCE OF MATERIAES to the national economy and the profits of individual companies is clear, the timelines and processes by which materials are developed and introduced are harder to characterize. Our poor understanding of these processes is not from lack of study, however. Numerous attempts have been made to define the materials development and commercialization processes (e.g., NRC 1989, 1993, 1997~. The problem is that the process rarely follows a linear progression through time from basic research to final implementation. Rather, as the vignettes of this chapter and Chapter 3 show, the development of each and every material can seem to be a singular and unique sequence of activities. The first step in analyzing the linkages among the MS&E and end-user communities and identifying potential methods for strengthening these linkages to accelerate the implementation of laboratory discoveries is establishing a baseline definition of the materials development and commercialization pro- cesses. This chapter presents an overview of (1) the time and drivers for success- ful transition, (2) a conceptual schema of the transitions from research concept to product integration, and (3) a description of the characteristics of each phase in the conceptual schema. The committee used the simplest and broadest possible view of materials development and commercialization processes for the analysis of linkages, even though it is not applicable to any specific development. Also, because the development of new commercial materials and processes are in most cases inextricably entwined, material/process will be referred to as a joint inno- vation in the remainder of this report. 12

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MATERIALS DEVELOPMENT AND COMMERCIALIZATION PROCESS DURATION AND DRIVERS OF MATERIALS TRANSITIONS 13 One premise of this study is that materials innovations have traditionally taken a relatively long time to transpire. This premise is based on retrospective substitution analyses for the adoption of some materials. For example, according to a formalized method for tracking these transformations developed by Fisher and Pry (1971), a complete material/process substitution requires at least a de- cade and, more typically, as much as 25 years (Table 2-1~. The cases reviewed during the three workshops organized by the committee supported this conclu- sion. The following reasons were most often cited for delays in the implementa- tion of new materials/processes: . . industrial culture, including aversion to risk, with asymmetrical conse- quences (e.g., enormous penalties for failure, lesser rewards for success); tradition (e.g., reluctance to change established paradigms); and perceived adequacy of existing technologies industrial infrastructure, including capital investment in the current tech- nology; narrow, periodic windows of opportunity that can be easily missed by purveyors of new technologies; fragmented structure of industry, which TABLE 2-1 Examples of Takeover Times and Substitution Midpoints Takeover Timea Substitution Substitution (years) Midpointb (year) Rubber: natural to synthetic 59 1956 Fibers: natural to synthetic 58 1969 Leather: natural to plastic 57 1957 Butter: natural to margarine 56 1957 Specialty steels: open-hearth to electric-arc 47 1947 House paint: oil-based to water-based 43 1967 Steel: Bessemer to open-hearth 42 1907 Turpentine: tree-tapped to sulfate 42 1959 Paint pigment: PbO-ZnO to TiO2 26 1949 Residence floors: hardwood to plastic 25 1966 Pleasure boat hulls: other to plastic 20 1966 Insecticides: inorganic to organic 19 1966 Tire fibers: natural to synthetic 17.5 1948 Cars: metal to plastics 16 1982 Steels: open-hearth to basic oxygen furnace 10.5 1960 Soap (U. S.): natural to detergent 8.75 1951 Soap (Japan): natural to detergent 8.25 1962 Source: Fisher and Pry, 1971. a time required to progress from 10-percent substitution to 90-percent substitution b when substitution is 50-percent complete

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14 100 80 cry 70 60 50 40 30 10 MATERIALS SCIENCE AND ENGINEERING 20 _ '1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 o 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 FIGURE 2-l Timeline for the adoption of single-crystal, first-stage, high-pressure turbine blades for jet engines. Source: Howmet International, Inc. . . prevents new technologies from moving up the value chain; incompatibil- ity of new technology with existing system constraints; and ability to im- prove existing technologies economic issues, including unreliability of supply (e.g., insufficient avail- ability of materials or insufficient supplier capabilities) and economies of scale (i.e., insufficient volume to justify adoption of a new technology, even if reliable processes and suppliers exist) inadequate support or incomplete knowledge base, including discontinu- ity of the development cycle (e.g., termination or suspension of funding); lack of a champion in industry; limited potential of the new technology to meet all user requirements; lack of an information or knowledge base for the new technology; and uncertainty of cost modeling (i.e., potential discrepancies between actual cost and theoretical cost determined by modeling) Successful materials substitutions tend to follow a classic "S"-shaped curve. Figure 2-1, for example, shows the process for the adoption of single-crystal, first-stage turbine blades for jet engines, which enabled engines to operate at higher temperatures and thus more efficiently (Box 2-1~. The motivation for changing from the incumbent material-based system to a new system varies for different applications, however. For intake manifolds, for example, plastic ver- sions were less expensive than the previous die-cast aluminum forms. For com- puter chips, copper interconnects allowed faster processing capabilities (Box 2- 2~. Based on the numerous examples of successful and unsuccessful material innovations described by the industrial representatives at the workshops, the

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MATERIALS DEVELOPMENT AND COMMERCIALIZATION PROCESS 15 committee was able to identify four general driving forces that are common to successful implementations. Finding 2-1. Successful materials developments and transitions will generally be driven by one of four end-user forces: (1) cost reduction (e.g., polymeric trim and intake manifolds in automobiles); (2) improvement in quality or performance or the customers' perceptions of quality or performance (e.g., advanced micro- processors, titanium golf clubs, aluminum wheels in automobiles); (3) societal concerns, manifested either through government regulation or actions to avoid government regulation (e.g., introduction of high-strength steels to reduce auto- mobile weight and thus help meet fuel economy regulations; replacement of chlorofluorocarbons); or (4) crises (e.g., adoption of thermal barrier coatings by South African Airways and synthetic rubber during World War II). Finding 2-2. Anecdotal evidence at the workshops also revealed significant dif- ferences between the forces that drive end-user communities and those that drive academic MS&E R&D communities. Based on comments by academic represen- tatives at the workshops, the committee was able to identify five driving forces that underlie the development of a successful academic R&D program: (1) avail- ability of funding; (2) expansion of the basic knowledge base; (3) fulfillment of an educational mission; (4) desire for professional recognition; and (5) availabil- ity of equipment. In general, the MS&E academic community has been unable or unwilling to conduct an R&D program unless at least one of these driving forces is present. Finding 2-3. The differences between the forces driving the end-users and those driving the MS&E community will determine the eventual success or failure of a materials innovation (Box 2-3~. A new material/process is not likely to be re- searched by the academic MS&E R&D community or adopted by industry unless it satisfies at least one of the perceived needs of both communities. CONCEPTUAL SCHEMA Materials development and commercialization processes are extraordinarily complex. Most case studies of materials commercialization are retrospective, starting with successful innovations and tracing their history back to their origins. This hindsight view makes the progressions appear more logical and coherent than they actually are (Horton et al., 1996) and ignores the lengthy process of incremental improvement that continues long after a material/process is initially adopted. In reality, material/process innovation is less a linear progression from basic research to final implementation than a mixture of activities, some of which may be either conducted concurrently or bypassed entirely. For example, Box 2-4 describes the development of tungsten filaments for light bulbs. In this

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16 MATERIALS SCIENCE AND ENGINEERING BOX 2-1 Single-Crystal Turbine Blades The efficiency of turbine engines, like the ones that propel jet aircraft or gener- ate electrical power, increases about 1 percent for every increment of 1 2°F in the fuel inlet temperature. This relationship has driven innovations in engine materials that can be used safely at ever-higher temperatures. The development of turbine blades and vanes made of superalloys that retain their strength even when heated to 90 percent of their melting temperature unlike conventional metals that weaken at cooler temperatures has been one the most important factors in keeping engine inlet temperatures hot. But even superalloys have weaknesses. At high temperatures, they become susceptible to grain bound- ary creep, which makes metal components vulnerable to the massive centrifugal forces generated as the parts whirl around at 25,000 rotations per minute inside the engine. Engine temperatures must be kept low enough so that the blades do not creep toward the engine casing, a scenario that could end in engine damage at least, and a catastrophic accident at worst. The addition of elements like carbon, boron, and zirconium to the superalloy composition strengthens the grain bound- aries, but also lowers the alloy's melting temperature, which limits the safe operat- ing temperature. In the early 1 960s, researchers at Pratt and Whitney decided to pursue another approach. Instead of trying to strengthen problematic grain boundaries, they thought it would be even better to eliminate the grain boundaries altogether. The inspiration came, in part, from the burgeoning silicon crystal industry, which was churning out salami-sized single crystals for the nascent microelectronics industry. Their first goal was to eliminate the grains most susceptible to grain boundary creep under the stress conditions caused by the centrifugal forces in operating engines. By the mid-1 960s, they had achieved their goal through processing inno- vations. One key was keeping the bottom of the ceramic mold much cooler than the top and letting the zone of cooling and solidification rise through the molten metal very slowly over the course of hours. The result was blades with columnar grains instead of grains with boundaries in all directions (equiaxed). This process, which became known as directional solidification, increased high-temperature strength by several hundred percent. This success suggested that performance could be improved further by elimi- nating the remaining grain boundaries. The technical key to creating a single- crystal turbine blade was to develop a "crystal selector" that would allow a single grain to grow into the bottom of the ceramic mold and then grow outward and upward to fill the mold as a single crystal. The first single-crystal turbine blades were in hand by the end of the 1960s. Yet single-crystal turbine blades did not appear on the commercial market until 1982. Part of the delay was due to the failure of some early directionally-solidified blades in a military test, which eroded confidence in the new technology. This failure led to an intense, five-year research effort by Pratt and Whitney to address the remaining metallurgical problems. Even so, directionally solidified and single-crystal blades cost more to produce than the easier-to-make equiaxed blades because the production process has a substantially lower yield of usable material. The production process involves not

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MATERIALS DEVELOPMENT AND COMMERCIALIZATION PROCESS 17 Turbine engine components. Photo provided by Howmet International, Inc. Only complicated metallurgy, but also sophisticated ceramic technology and poly- mer know-how for making the molds, which work by the age-old lost wax method. Bringing down prices of the new blades enough for widespread use required, among other things, the development of precise process controls, improved alloys, solidification models, and sophisticated furnaces. Since 1982, single-crystal turbine blades have become standard equipment in the hot parts of engines (photo). Pratt and Whitney, PCC Airfoils, Howmet, and others have now made millions of single-crystal blades and vanes. Virtually every late-model military and civilian aircraft has them. The need for innovation continues, however. In the quest for ever-higher en- gine operating temperatures, airfoil engineers are working on new blade designs and vane shapes and new internal geometries that will enhance cooling rates. Ceramic-based thermal barrier coatings to push engine temperatures higher are becoming more common. Thermal barrier coatings add the challenge of under- standing and controlling interfaces between the superalloy blade and the ceramic overcoat. Single-crystal technology is also being used by the power industry, which has been developing large, stationary turbine engines for generating electrical power. In just the last few years, the efficiency of these giant engines has nearly doubled, to about 60 percent. Part of that dramatic jump came from single-crystal turbine blade technology, which is likely to increase the demand for even better, larger, and more capable turbine parts. Source: Giamei, 1998; Maurer, 1998; NRC, 1996.

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18 MATERIALS SCIENCE AND ENGINEERING BOX 2-2 Copper Interconnects for Semiconductor Chips For more than 30 years, electronics engineers knew they could design faster, more capable microcircuitry if they could interconnect the ever increasing numbers of transistors on chips with copper microwiring. As it turned out, aluminum proved to be easier to integrate into the chip-making process and chip operation, so alumi- num, not copper, became the standard interconnect metal of the microelectronics revolution. The allure of copper remained intact. For one thing, copper conducts electricity with about 40 percent less resistance than aluminum. In chips, that would translate into higher switching speeds, which is the key to computing power and high perfor- mance communications circuitry. Tiny copper interconnects would also be able to withstand higher current densities so that transistors could be packed closer to- gether, another favorite way of boosting chip performance. Despite its potential, however, copper had a killer flaw. To chips, copper be- haved like a virus because it readily diffuses into silicon and prevents transistors from functioning. Even if that were not the show-stopper for copper, there was no easy way of depositing and patterning minuscule copper wires with the uniformity to ensure high chip yields and long-term chip reliability. So for 30 years aluminum had no real competition for interconnects. The idea of copper interconnects might never have resurfaced had chipmakers not been so successful in designing and fabricating ever more powerful chips. The relentless course of miniaturization behind this success was bound to come up against aluminum's limitations in terms of resistivity and current density. Because of the need to implement improved interconnect technology, copper interconnects were included in the industry road maps in the mid-1990s and the semiconductor industry consortium, SEMITECH, conducted research to try to scale-up the tech- nology. And in late 1997, first IBM, and then other big league players in the semi- conductor industry, revealed that more than a decade of research had finally opened the way to copper interconnects. The following year, several companies retooled their fabrication lines and actually began shifting from aluminum to copper interconnects in their high-performance chips (see photo). Copper interconnect technology came together first at IBM for several reasons. Since the 1960s, the company had been developing expertise in electroplating high-quality thin films of copper. IBM started plating copper/permalloy thin film heads for magnetic data-storage systems in 1979. Researchers developed addi- tional expertise in handling copper from the manufacture of printed wiring boards and high-performance chip packaging. In 1986, in a major breakthrough, research- ers identified a reliable barrier to prevent copper from diffusing into the nearby silicon. With good ways of patterning copper and preventing it from poisoning the chips, the prospects for copper interconnects soared. In 1989, IBM even demon- strated the use of copper interconnects, along with a new polymer-based insulator (low dielectric constant material) on a manufacturing line. Just as the engineering momentum for copper interconnects was accelerating toward wholesale integration into the chip fabrication process, a fundamental change in course in the history of chip technology slowed things down. In the early 1990s, the semiconductor industry shifted from using so-called bipolar transistors to CMOS (complementary metal oxide on silicon) technology. CMOS had slower

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MATERIALS DEVELOPMENT AND COMMERCIALIZATION PROCESS 19 Scanning electron micrograph of a device with IBM's first-to-market six-level cop- per interconnect technology. Source: Courtesy of International Business Machines Corporation. Unauthorized use not permitted. clock speeds but drew less power, which was becoming crucial, particularly for lap- top computers whose utility and marketability depended on how long they could work without having to recharge their batteries. At IBM, the shift to CMOS technol- ogy temporarily took precedence over the R&D on copper interconnects. The program did not disappear, however. Bipolar transistors were still the main- stays of high-performance servers including those that would link into the Internet. And as the density of CMOS increased, copper inevitably became more attractive there as well. As the pace of research at IBM picked up dramatically, a multi- disciplinary group rapidly worked out research, development, and manufacturing details that led to the company's 1997 announcement of next-generation semi- conductor chips with copper interconnects. All the signs of an industry-wide conversion are showing themselves. Most major semiconductor companies have announced their own goals and milestones for implementing copper interconnect technology. Universities are offering short courses and seminars in copper interconnect technology. Technical conferences are including symposia on the topic. The biggest hurdle for semiconductor makers will be investing millions of dollars for new capital equipment specially designed for getting the best out of copper while keeping its well-known tendency to poison electronic devices under control.

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20 MATERIALS SCIENCE AND ENGINEERING BOX 2-3 Titanium Aluminides: Unrequited R&D Titanium aluminide alloys have been on the minds of turbine engine designers for more than 40 years. These alloys are about half the weight of nickel-based superalloys, yet can function at temperatures nearly as high. An engine made with titanium aluminide alloys could be dramatically lighter, which would make planes powered by these engines more capable. The quest to develop titanium aluminide alloys (TiAI or Ti3AI) began in 1956 when General Electric (GE), a maker of turbine engines, began funding studies at the Armour Research Foundation. Despite some promising results, funding cut- backs by GE forced the work to stop. Several other research groups picked up the baton in the 1960s, but when a group at Battelle tried forging these alloys with standard hammer forge equipment, the alloys shattered into bits. Word got around, and since then engine designers have associated titanium aluminides with hope- less brittleness. A small core of researchers continued doing fundamental studies on the mate- rials, but work toward more practical ends was not resumed until 1972, partly by accident. Harry Lipsitt and colleagues at the Air Force Materials Laboratory had been looking for materials that could meld metallic and ceramic features. and inter- metallic titanium aluminizes, which shatter like ceramic when struck, seemed like a good posibility. At first, the Air Force interests were scientific, but they soon be- came technological as well. Within two years, Air Force researchers had devel- oped a far more ductile, workable titanium aluminide alloy. Their success shook free some funding, which was awarded to several engine makers, including GE and Pratt and Whitney. Development of titanium aluminide had still not progressed substantially, however, partly because the work was applicable to defense sys- tems, resulting in findings and data that included proprietary information whose circulation was extremely limited. Most research was aimed toward a dead end in terms of scaling up the technol- ogy. Then, at a technical conference in 1975, the Air Force researchers received an unsolicited tip by a vice president of Timat, a titanium metal firm. At the time, the researchers had been pursuing a powder-metallurgy approach in which titanium aluminide parts would be made from powdered starting materials shaped and baked into final shapes much as ceramic items are. But at the conference, the group learned that the titanium industry was not geared for powder metallurgy approaches, and that casting using molds and molten alloy was the way to go. Based on this painful bit of industrial intelligence, the Air Force group shifted toward casting methods, which, although averting a dead end, set the develop- ment clock back considerably. It took another decade until the late 1 980s be- fore researchers had developed alloys they could work into various engine parts. During all this time, the reputation of titanium aluminides as a brittle material persisted. Lipsitt recalls carrying lots of intricately shaped titanium aluminide parts in his briefcase to prove to people that these alloys indeed could be formed into usable components. Today more than 40 years after research began titanium aluminide alloys are technology-ready. Several years ago, GE ran titanium aluminide engine parts through 1,500 cycles (heat, run, cool, repeat) with no problems. Nevertheless,

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MATERIALS DEVELOPMENT AND COMMERCIALIZATION PROCESS 2 Cast titanium aluminide vane for a turbine engine. Photo provided by Dr. Harry Lipsitt. engine designers have not yet embraced titanium aluminize. For one thing, they have a powerful incentive to not use new materials. Because the engines they build may someday carry 300 passengers at 30,000 feet, they are more comfort- able working with familiar materials with long track records than with new materials that have no service track record. Ironically, the automotive industry may be the first to adopt titanium aluminide into actual service. If fuel efficiency standards go up as they almost certainly will car makers will have to build smaller engines that can operate at higher RPMs. Maintaining these engine speeds will be easier with lighter weight valves that have lower inertia, which will enable them to open and close faster. Major car companies have already tested valves made of titanium aluminides for this pur- pose, but the alloy's cost remains a barrier. The stroke of a legislative pen calling for more efficient cars could ultimately convert more than 40 years of research on titanium aluminides into moving metal. Sources: Personal communications between 1. Amato with Harry Lipsitt, Wright State University, 1998; Allison, 1998.

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22 MATERIALS SCIENCE AND ENGINEERING BOX- 2-4 Capitalizing on Luck The Development of Tungsten Filament Wire The first generation of incandescent lamps a century ago had carbon filaments that were fragile, brittle, and short lived. And even while they were shining, flaws dimmed the light. Hot carbon from the filament often reacted with residual gas molecules inside the bulbs leading to black deposits on the glass jackets. What's more, watt for watt, carbon emitted fewer lumens than many other materials when electrified to incandescence. Among the early competitors of carbon at the turn of the century, tungsten was the most promising for filaments. For one thing, its light output was three times that of carbon. Tungsten's extremely high melting temperature and the tendency of its atoms to stay put even when hot also seemed promising for building better, longer- lasting bulbs. The trouble was, no one had ever produced tungsten metal that was ductile enough to pull into a fine filament that would last, let alone a fine coil (to increase its light-emitting surface area within the bulb). Not until 1909, that is, when the tenacity, and luck, of William Coolidge of the General Electric company combined to usher tungsten in as a critical material for one the most important technologies of the modern era incandescent lighting. Coolidge had been working on the tungsten filament problem for three years when he finally succeeded in making short lengths of thin tungsten wire by heating square ingots of the metal and pulling them through a succession of ever-smaller wire-drawing dies, all while keeping the metal hot. During these experiments, he discovered that the very process of deforming the ingot into thin wire had some- how made the tungsten ductile. He could bend the wire cold and it wouldn't break. Coolidge didn't understand what had happened to tungsten's hidden anatomy to make this possible, but it was a pivotal advance in the history of lighting. The following year he wrote in his laboratory notebook that he was reeling long lengths of tungsten wire onto spools. The new ductile tungsten wire rapidly became the stuff of countless incandescent lamp filaments, where it is still used today. Yet all of Coolidge's tenacity may not have paid off (at least not so soon) had he not happened to use so-called "Battersea-type" clay crucibles in the process of reducing tungsten oxide to tungsten metal powder. He had noticed that tung- sten filament made from metal produced with these crucibles lasted longer than filaments made with metal prepared otherwise. Unseen and unknown to Coolidge, potassium from the clay crucibles had leached into the powder during the reduction process and caused the structural changes that led to the fila- ment's ductility. Under a microscope, researchers could see one important change. In materi- al produced without the Battersea-type crucible, the grains of the tungsten fila- ment aligned along the axis of the filament creating a bamboo-like structure. At high temperature, the boundaries between the "bamboo" segments would weak- en, the filaments would break, and the light would go dark. With the Battersea- type crucible, however, the grains elongated and interlocked into a much stron- ger, longer lasting, ductile architecture. Coolidge's invention of ductile tungsten gave General Electric a dominant position in the incandescent lamp filament business for many years.

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MATERIALS DEVELOPMENT AND COMMERCIALIZATION PROCESS 33 Finding 2-6. The importance of Phase 2 R&D and the substantial differences between Phase 2 and the traditional Phases 0 and 1 research are gaining recogni- tion with funding agencies, universities, government laboratories, and industry. Overcoming the barriers to Phase 2 R&D is the most promising way to shorten the time to market of laboratory innovations. Based on the information provided at the workshops, the committee identified six principal barriers to the performance of Phase 2 R&D: variability and instability in funding; the high costs and long time frames associated with certification of materials/process technologies; the difficulty of accurately modeling implementa- tion costs and demands for materials; the multidisciplinary nature of the R&D; the difficulty of mobilizing academic research; and the differences in end-user and research cycle times. These barriers are discussed in the following sections. Funding Gap The first barrier to Phase 2 R&D is the perception that funding is variable and unstable. The funding bases for Phases 0, 1, 3, and 4 are relatively stable and efficient. Phases 0 and 1, which are nationally and internationally motivated by the desire to improve industry, society, and the human condition (see Chapter 1), are supported by federal and state government programs and encouraged at uni- versities and government laboratories in a variety of ways (e.g., tenure, peer- reviewed publication, and research awards). Phases 3 and 4 are a natural part of doing business and are motivated by industry's desire to remain competitive. For most (if not all) industries, survival depends on how well a company interprets market forces and implements new technologies in response. Phase 2 R&D, however, requires taking tremendous risks and can be the most expensive research phase, especially if the construction of a pilot plant is involved. Phase 2 R&D can also have the highest payoff, however. Industry generally prefers that many different Phase 2 programs be under way at any given time to increase the chances of finding new and potentially profitable technolo- gies and to increase its options for meeting new economic or environmental requirements. Responsibility for the funding of Phase 2 R&D is a matter of debate, however. Many in industry believe that funding for Phase 2 R&D should be the responsibility of the federal government because it enhances national economic competitiveness. Many federal policy makers believe that industries should be responsible for funding their own Phase 2 R&D because it is in their competitive interest to do so. Because of the lack of secure funding for Phase 2 R&D, universities rarely have either the wherewithal or access to state-of-the-art industrial equipment to participate. In many cases, the MS&E R&D community attempts to attach Phase 2 R&D to Phase 1 research programs and adapt existing equipment as best they can.

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34 MATERIALS SCIENCE AND ENGINEERING BOX 2-6 Accelerated Innovation in the Semiconductor Industry New, more capable materials are the flesh and bones of new, more capable products. For some industries, including the semiconductor industry, a promising new material or process can be used in products in a matter of months. In more conservative industries, the integration of a new material can take decades. Titani- um aluminides lighter weight, higher temperature alloys for turbine engines- have been in development since the mid-1970s and are still not the stuff of air- planes. The vast differences in the rates of integration of new materials into products by different industries reflect a complex web of factors, including techni- cal details of the technologies themselves, the cultures and histories of the indus- tries, and even macroeconomic factors like the cost of commodities. The semiconductor industry has become famous for the fast pace of its mate- rials development and commercialization cycles. In the early 1970s, Intel co- founder Gordon Moore argued that microchips would double in computational pow- er and halve in price every 18 months. This became known as "Moore's Law," and living up to it has been both a cause and an effect of the insatiable demand for cheaper, more powerful computing power. Moore's Law also created a competitive context in which companies must be able to make rapid incremental improvements to integrated circuits and other computer components. To do this, the industry as a whole has had to compress what this report has identified as Phase 2 and Phase 3 of the materials development and commercialization cycle, the R&D phases that bring a material with proven laboratory promise for some technological purpose through the expensive and risky work of proving its worth for integration into products. In the semiconductor industry, many factors have come together to speed up the materials development and commercialization cycle. For one thing, its prod- ucts, including personal computers, are modular, so material or process innova- tions can be easily implemented in different components of the final products. The limited liability of flawed technology compared to the liabilities in the automotive and aerospace industries has also accelerated R&D in the semiconductor indus- try. Although computer crashes are costly and troublesome, they are never by Finding 2-7. Linkages among the academic MS&E R&D community, industry, federal and state funding agencies, and entrepreneurs are generally weak, and there is no consensus as to who should be responsible for the identification and funding of Phase 2 R&D programs. Materials/Process Certification The high costs and long time frames associated with certifying a material/ process innovation are a second barrier to Phase 2 R&D. The time from innova

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MATERIALS DEVELOPMENT AND COMMERCIALIZATION PROCESS 35 themselves fatal. Materials and processes for semiconductors have been studied extensively, so the seed corn of innovation the knowledge base is present in abundance. There also are a handful of sociological and economic factors that enable the semiconductor industry to compress Phases 2 and 3 of the materials development and commercialization cycle: It's a relatively young industry, on the early part of the "S"-shaped curve that depicts the development cycle of many industries, when rapid development is most likely. 2. Society's wholesale adoption of semiconductor technology has enabled the industry to build and upgrade its physical and talent infrastructure rapidly. 3. To meet demand at the rate suggested by Moore's Law, separate companies have had to overcome the go-it-alone mentality of previous technological eras. For example, many semiconductor companies have pooled their resources into meta-organizations (such as SEMI/SEMATECH and NEMI) to push through the expensive, high-risk Phase 2 of the R&D cycle. 4. These companies, along with academic and government organizations, have also formulated technology road maps charting out long-term strategic goals for the industry and identifying the most-likely-to-succeed tactics for meeting those goals. The road maps have helped companies steer finite funds and resources in the directions most likely to pay off. 5. The intimate connection between basic science and technology in the semi- conductor industry has attracted the attention and talent of universities. Some academic institutions have even set up centers dedicated to research that feeds into both Phase 2 R&D and adds to the fundamental knowledge base. The situation may change in the early decades of the next century when micro- electronics components will be so small that quantum effects will overtake classi- cal electronic behavior. At that point, the hard-won knowledge base of classical electronics and conventional lithographic-based chip-making will no longer feed smoothly into Phase 2 and 3 R&D. But, there may be a consolation for the post- Moore's Law electronics industry. The first personal quantum computer might take a lot longer to become obsolete than any 20th century PC. lion to implementation depends on the application and generally increases with the complexity and potential liability of the application (e.g., from sporting goods to electronics to automobiles to aerospace systems). From the perspec- tive of individual companies, the barrier to supporting Phase 2 research is most difficult to overcome for technologically mature or high-liability industries because the introduction of new materials/processes requires extensive and expensive product recertification. The time required to certify a new material/ process often approaches the limits of the patent-protection period; thus a com- pany may not have time to recoup its R&D investment before its competitors can legally use the technology. Thus, the high costs and long times associated

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36 MATERIALS SCIENCE AND ENGINEERING Industry------------- Industry 1 2 by ~,,0~, / Multidisciplinary ' research Academia . ~-~$ ~ Governs ,L Laboratories Government Intent Initial scale-up from laboratory-scale process to prototype produc tion Starting point Materials/processing prototype; laboratory-scale processing Result Prototype production (integration proof or pilot plant, depending on industry); quantification of business risk Output Internal industry reports; consortium sharing of database informa tion Principals Industrial R&D laboratories; industrial consortia; universities as subcontractors Funders Predominantly federal/state government; in-kind and small amount of financial support by industry, usually via consortia; entrepre neurs Gatekeepers Federal/state government; private industry via consortia Time period O to more than 20 years FIGURE 2-6 Characteristics of material process development (Phase 2~. The thickness of the line indicates the importance of the linkage. with recertification tend to bias industry toward incremental improvements in developed technologies that can be implemented quickly and that allow them more time during the patent-protection period to accrue profits and recoup R&D investments. Finding 2-8. The extended period of time and significant investment required to certify new materials/processes in technologically mature or high-liability indus- tries are impediments to material/process innovations, especially when the time to certification and first application can exceed the patent-protection period and limit the company's ability to recover R&D investments. Linkages between

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MATERIALS DEVELOPMENT AND COMMERCIALIZATION PROCESS 37 industry and government regulators are important for determining whether investing the time and financial resources required to certify a new material is worthwhile in a given situation. Modeling of Implementation Costs and Materials Demand The third barrier to the success of Phase 2 R&D is the difficulty of accurately estimating the costs, trade-offs, and eventual demand for a materials insertion at this early stage in the implementation process. Nevertheless, because business risks must be quantified during Phase 2, better methods for modeling costs and trade-offs could demonstrate the true potential of new materials/processes. Finding 2-9. The risks associated with a materials insertion cannot be quantified accurately with current methods of estimating costs and eventual demand and for making trade-offs. Modeling methods must be improved to assess the true poten- tial of new materials/processes. Multidisciplinary Nature of Phase 2 R&D The fourth barrier to Phase 2 R&D is the wide spectrum of expertise required to complete the development of materials/processes. The required expertise is generally beyond the ability of any one individual and could require the forma- tion of multidisciplinary teams. Linkages among universities, government re- search laboratories, and industry are thus important for amassing the required expertise. Some potential methods for promoting multidisciplinary research projects within and among universities, government laboratories, and industry and for promoting interaction are (1) permitting Ph.D. and masters students to conduct research in industry; (2) promoting short-term exchanges (e.g., one-day consultancies to one-month visiting positions), as well as long-term sabbaticals among universities, government laboratories, and industry; and (3) encouraging industry researchers to seek adjunct positions at local universities and govern- ment laboratories. Researchers will require management and interpersonal skills to function well in multidisciplinary teams. Finding 2-10. Phase 2 R&D is becoming increasingly multidisciplinary and dependent on (1) the promotion of multidisciplinary research projects within and among universities, government laboratories, and industry and (2) the availability of people trained to work on multidisciplinary teams. Mobilizing Academic Research Another barrier to Phase 2 R&D is the difficulty of mobilizing academic researchers to perform Phase 2 research. The driving forces for academic and

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38 MATERIALS SCIENCE AND ENGINEERING end-user communities differ, and an academic R&D program must not only have funding and equipment but must also fit into the academic culture and educational mission of the university. For example, one problem commonly encountered by universities is difficulty evaluating junior faculty members engaged in Phase 2 R&D. Tenure appointments are generally based on the publications record of the candidate and assessments by recognized faculty members at other institutions. Limiting the opportunities for junior faculty members to publish the results of their research in the open literature or limiting their ability to collaborate with other faculty members places them at a disadvantage when being considered for tenure. Finding 2-11. Phase 2 R&D, which involves interacting with industry and other nonacademic organizations, is often hindered at universities because the tradi- tional methods of evaluating research faculty for tenure do not value participation in Phase 2 research projects as highly as Phases 0 and 1 projects. Product Cycle Times Differences between academic and industrial product cycle times can also cause problems. All student research must have major teaching and educational components that must be conducted and published within designated time peri- ods (i.e., B.A./B.S. degrees in four years; M.A. degrees in one or two years; Ph.D. degrees in five or more years). Industry has very different funding and planning cycles, however, and can rarely plan or fund more than a year in advance. As a result, much of the industrial research conducted by academic institutions is short term (i.e., one year or less). Finding 2-12. Industry's funding and planning cycles tend to be incompatible with the time frames and commitments required for educating graduate-level students. PHASE 3: TRANSITION TO PRODUCTION Phase 3 is the best defined of the R&D and commercialization phases but varies the most from company to company and from industry to industry. Phase 3 begins when a company becomes convinced of the cost/benefit advantages of a new material/process and schedules it for integration into a final product. The objective of Phase 3 R&D is to make the transition to reliable, full-scale produc- tion without compromising the advantages of the materials/process innovation. In addition to business and marketing issues, six major technical issues must be considered: · Can the materials/processes be optimized during scale-up? · Are reliable sources for the materials/processes available?

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MATERIALS DEVELOPMENT AND COMMERCIALIZATION PROCESS 39 · Can existing equipment be adapted to produce parts to specification using the new materials/process, or is a new infrastructure required? · Can quality be adequately controlled for the materials/process innovation and resulting products? · Are techniques available for integrating the parts produced with the materials/process innovation? Is extensive training required to implement the new methods/technologies? . Traditionally, Phase 3 R&D has been proprietary and was conducted pre- dominantly by industry generally by the original equipment manufacturer (OEM) and one or more suppliers. Thus, the critical linkages are usually either between the industrial R&D and manufacturing branches of a single company or between members of the supply chain of an industry. Occasionally, universities or government laboratories are contracted, and sometimes companies attempt to develop a material/process jointly. There are several routes by which a "technology pull" may be established and a technology in Phase 2 (or even at the end of Phase 1 for exceptional breakthroughs) acquired by a company for Phase 3 scale-up. Regardless of the route to Phase 3, an industry champion who can persuade decision makers that the technical and business risks of introducing the new technology are justified may be critical. Development engineers might read about a new laboratory material/process in a technical journal and decide that it holds sufficient promise for investment. The company might then contact the original researchers and offer to work with them on a proprietary basis. The company might also try to glean whatever information it can from published results and discussions with the researchers and then initiate its own program. Searches of the open literature are especially effective if a major new driver (e.g., a new federal regulation) is introduced and an industry must respond quickly to remain competitive. Linkages between the end-user community and university or government research laboratories must be strong for a new technology to make the transition in this way. An innovation may also come to the attention of a company via a supplier or competitor that has focused on a new material/process. This often happens in the United States and might be the dominant driver for entering Phase 3. In many industries, notably the automotive sector, competitors' products are routinely disassembled and examined for new engineering approaches, manufacturing tech- niques, and materials (see Box 2-7~. A related mechanism is for an innovation developed for one application, often through government-sponsored programs, to be adapted for application in another industry. This allows manufacturers to take advantage of work performed by others to improve products and provides the materials supplier an opportunity to recoup a portion of the development costs. An example of this mechanism is the use of advanced structural materials in consumer sporting equipment (e.g., carbon composite rackets and golf club shafts

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40 MATERIALS SCIENCE AND ENGINEERING BOX 2-7 Tailor-Welded Blanks Recognizing good ideas first developed by others is a great way of shortening the materials R&D process. The development of so-called tailor-welded blanks in the U.S. automobile industry is a case in point. Traditionally, structural auto body parts have been made by cutting steel sheets (with a specific thickness, coating, and set of metallurgical properties chosen for the application) into specific starting shapes called blanks. The blanks are then stamped into the three dimensional forms of finished parts. Many assemblies including body side panels, wheel housings, and fenders require that some areas be reinforced with heavier steel for safety or to withstand stresses. For decades, carmakers have made these heterogeneous assemblies by first making individual parts individually designed and formed to have the needed properties and then welding these parts together into finished assemblies. In 1990, when U.S. engineers disassembled and examined the new models of the Lexus LS400 automobile, they were hoping to find an innovation that would simplify carmaking. Underneath the LS400's sleek exterior, the engineers found a variety of applications of what later became known in the industry as tailor-welded blanks (TWBs). The key innovation of these blanks is the incorporation of the heterogeneous material properties needed for car components into a single blank that can be formed into the finished component with a single set of dies. The blanks are tailor-made by laser-welding together flat steel sheets with different strengths, thicknesses, and coatings. European and Japanese carmakers were the first to use TWBs during the 1 980s. Their use in the 1990 Lexus LS400 was an effective wake-up call to the U.S. car industry. Within only three years, an entire industry to supply TWBs to manufacturers had taken root and begun to grow. Picking up on someone else's good idea shaved at least a decade off the normal time for a new material or materials process to wend its way into service from the time of the original innovation. One reason for the rapid development of a TWB supply line in the United States was that the technology was related to al- ready mature laser-based welding processes (photo). Much of the development work was done by agile start-up companies with laser welding expertise, such as LaserFlex and Utilase. Another key to the rapid development of TWBs was the creation in 1992 of the TWB Company a joint venture between Worthington Steel, a major intermediate steel processor based in Columbus, Ohio, and German- based Thyssen Krupp-Stahl AG, which had pioneered TWB-technology in the ear- ly 1980s. In 1997, several major steel companies joined the company as limited partners, accelerating further diffusion of the technology through the entire manu- facturing chain. The use of TWBs by U.S. carmakers has been growing steadily (photo). Ac- cording to a report by the American Iron and Steel Institute on efforts to develop ultralight steel auto bodies, TWBs are central to the steel industry's bid to remain a mainstay of the automobile industry (even though TWB technology could also be used for aluminum). Pursuing business as usual would be risky for the steel indus- try in the face of growing competition from nontraditional materials, including alu- minum and composites. TWB technology is an important factor in this competition because it can not only simplify and improve the manufacturing process, it can

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MATERIALS DEVELOPMENT AND COMMERCIALIZATION PROCESS 4 Laser-welded door inner panel. Source: TWB Company. Automated welding system for the production of door inner blanks. Source: TWB Company. also save money by reducing the amount of steel needed to make vehicles as well as reducing scrap volumes. Just how far TWBs infiltrate the U.S. auto industry will depend on the suppliers' cost effectiveness and willingness to innovate, as well as on how far carmakers are willing to move away from conventional manufacturing practices. The progress so far is testimony to what can happen when the "not invented here" syndrome does not obscure the technological potential of someone else's good idea. Source: McCracken, 1998.

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42 MATERIALS SCIENCE AND ENGINEERING and titanium golf club heads). Thus, linkages between industries even if they are not official, established collaborations are important for the creation of "technology pull." In recent years, consortia of universities, government laboratories, and in- dustries have focused on Phase 2 R&D and attempted to demonstrate feasibility through precompetitive programs. Participation in these consortia allows compa- nies to observe and evaluate Phase 2 R&D. If a company is persuaded that a technology has cost/benefit advantages, it could decide to proceed with in-house development on a proprietary basis. Consortia are typically funded by the federal or state governments for the university/government component and by industry for the industrial component (the objectives and mechanics of consortia are dis- cussed in greater depth in Chapter 3~. Phase 3 development is very efficient and is driven by the natural selection process of the marketplace. The process is also highly developed and almost inscrutably complex to those outside a company because decisions are based on a broad range of factors. For example, the implementation factors for the turbine- engine industry include market competition; customer needs; partnerships and licensing requirements; technology cost; technology maturity (e.g., manufactur- ability); risk (e.g., liabilities); resource allocation (e.g., capital outlay); enhancing versus enabling capabilities (i.e., technical merit); supplier base readiness and feasibility; and dual-use versus strategic-fit (Roberge 1998~. A summary of Phase 3 development is presented in Figure 2-7. PHASE 4: PRODUCT INTEGRATION If the prerequisite knowledge and supplier bases for full-scale production can be successfully produced within the time limits demanded by the product development cycle for an industry, the material/innovation will enter Phase 4 development and be integrated into the final product. Because product develop- ment cycle times are currently being decreased, actual R&D cannot be conducted TABLE 2-2 Characteristics of Product Development Phase (Phase 4) Intent Product concept to product design to production Starting point Product concept End point Product production Output Full scale-up (only troubleshooting R&D is performed because cycle time is short); internal configuration-management documentation Principals Industry; federal end users; customers Gatekeepers Industry management Time period 2 to 5 years

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MATERIALS DEVELOPMENT AND COMMERCIALIZATION PROCESS Industry Industry 1 ~ 2 / ~ Internal development, Ago / . ~\ of, ~ Supply chain development, Of ~| \ opt Reverseengineerina ,,' _ 03 .0 eo eo 0, ~ ~/' \ \ \ / I Gove nment I / / / / / / / / / / / \ Government , Laboratories Intent Component design and testing; materials process design and scale-up Starting point Prototype production End point Incorporation into product concept Output Internal company data and know-how to begin production Principals Predominantly industry with some researchers (university/govern ment laboratory/industry) Funders Predominantly industry via internal funding; federal end-users (e.g., DOD, NASA); venture capitalists Gatekeepers Industry management; federal end-users Time period 2 to 5 years FIGURE 2-7 Characteristics of transition to production (Phase 3~. The thickness of the line indicates the importance of the linkage. during Phase 4. The MS&E R&D community still plays an important role in the successful launch of a new material/process, however, but it is usually an advi- sory role. The R&D community must be available in a consulting capacity to monitor field failures and advise the manufacturer on how to resolve problems. Phase 4 also provides important feedback for the R&D community on manufac- turing problems or limitations that may suggest areas for further research to improve manufacturing processes. Because of the urgency and proprietary nature of Phase 4 scale-up, the in-house industrial research community is most often involved during this phase, although academic researchers are also regularly brought in on short-term, proprietary consulting contracts. A summary of Phase 4 development is presented in Table 2-2.