Global Economics

New Applications for Microchips


Semiconductor makers such as STMicroelectronics are finding medical uses for the tiny chips they develop—from cancer and flu detection to insulin delivery

When researchers at Europe's largest chipmaker, Geneva-based STMicroelectronics (STM), developed a chip to help nuclear physicists probe atomic structures, they never dreamed that the same technology might be used for early detection of skin cancer. But it turns out that the chip's ability to spot a miniscule particle of light also enables it to distinguish between healthy and cancerous skin cells.

To just about everyone's surprise, there are dozens of potential medical applications for the silicon technology originally developed to work in video game consoles, mobile phones, and even ink-jet printers. Indeed, the emergence of innovative, nano-scale medical devices is rapidly pushing the semiconductor industry into the health-care business.

The examples hold out hope for remarkable breakthroughs. The IBM (IBM) microprocessor used in the Sony (SNE) PlayStation 3, for instance, is proving useful for medical imaging applications such as detecting breast cancer because it can render 3D images 50 times faster than traditional chips can. A chip developed by STMicroelectronics for tiny mobile-phone cameras also could help treat sick babies by powering tiny disposable endoscopes—the lighted probes used by doctors to see inside organs. STMicro's new-generation memory chips could even prolong the life of implanted medical devices, such as defibrillators, helping avoid surgical procedures to replace spent batteries.

Lack of Focus?

Semiconductors have been used in medical equipment for four decades, but until now their impact on the medical industry has been slight. According to Databeans, a Reno (Nev.) research firm that tracks the global semiconductor market, the entire market for chips used in medical applications will amount to only $2.6 billion this year, just 1% of the $266 billion semiconductor industry. But the medical chip segment is growing 12% a year, Databeans says, making it one of the fastest-growing markets for semiconductors. It's no wonder, then, STMicroelectronics Chief Executive Carlo Bozotti identifies nano-medicine as a "booming" part of his business.

STMicro had 2006 sales of $9.85 billion and is one of the top 10 chip manufacturers in the world. It has long been a big player in chips for mobile phones, smart cards, and digital cameras, as well as a wide range of industrial and automotive applications. The company's breadth of products and technologies has at times provoked concerns over a lack of focus. But Bozotti, who took over the top job in March, 2005, from legendary predecessor Pasquale Pistorio, argues that STMicro's broad portfolio is proving to be strong today because the technologies of the future are cross-disciplinary, marrying fields such as biology and information technology

Multiple Medical Applications

Take ink-jet printer technology, which STMicro originally developed for clients such as Hewlett-Packard (HPQ). STMicro now has applied the same principles used in ink-jets to devise a swift, low-cost test for avian flu that could help cut the risk of a deadly pandemic. The "lab-on-chip" flu test, developed in partnership with Veredus Laboratories in Singapore, aims to identify the most lethal variety of avian flu, H5N1, plus more than 20 other common influenza strains, in under an hour. At less than $10,000, the test costs about a 10th of a comparable laboratory setup.

STMicro also used ink-jet technology to help its medical research partner DeBiotech bring to market a tiny disposable insulin pump that could be worn under a diabetic patient's clothing to deliver precise, continuous doses of insulin. The pump is mounted on a disposable and nearly invisible skin patch, making it about one-quarter the size of existing alternatives. It could be on the market by the end of 2008.

The skin cancer detection technology came from an entirely different part of STMicro. A group there was working on chips for nuclear imaging that could detect the presence of a single photon of light. But in discussions with university researchers, they discovered that when light is shined on the skin, there is a miniscule difference between the amount reflected by normal cells and embryonic skin cancer cells. By measuring these differences, doctors may able to detect the presence of cancer long before the human eye or any other instrument yet developed could.

Bringing the Technologies to Market

STMicro concedes that it's not sure yet whether the cancer detection technology can be commercialized. The same goes for infant endoscopes, which would allow doctors to peer into the bodies of sick children. As a chip company, STMicro says it can develop the silicon and optical technology but needs to find medical device partners to bring them to market.

It's also hard to gauge how big a business medical technology will be for STMicro. The company "is involved in the creation of new markets, which makes revenue growth very difficult to predict," says Peter Gebler, an independent technology consultant working for STMicro. But Gebler says he and the company are convinced many of the areas they are pursuing "will be big markets—and STMicroelectronics intends to be a major player."

Jennifer L. Schenker is a BusinessWeek correspondent in Paris. She has been covering the technology sector in Europe since 1985. At The Wall Street Journal Europe, she covered breaking technology news and worked as the assistant managing editor of Convergence, the Journal's quarterly technology magazine. In 1999, she took the job of senior writer/technology for Time magazine in Europe and was editor of Time Digital Europe, a quarterly technology report. She is also a former technology writer for the International Herald Tribune, and from October, 2004, to April, 2007, was the international editor of Red Herring magazine.

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