A small scientific firm in Georgia wants to lithograph content onto thin films and create optical discs that may challenge the market for polycarbonate CDs, CD-ROMs and digital versatile discs.
Two large German firms, media player Bertelsmann AG and equipment maker Leybold Systems GmbH, have bought into the discovery.
The process technology ``is as far advanced over conventional compact disc manufacturing technology as compact disc is over reel-to-reel tape,'' Jamie Edelkind, president of Sage Technology Inc., said at a recent news conference. ``It's bigger than DVD.''
Now, processors replicate polycarbonate CDs in injection molding machines.
Soon, audio, video or software data will be lithographed on a thin film — supplied on a roll similar to paper — on a printing press. The flexible, metalized film is laminated to a thick biaxially oriented polystyrene optical substrate, and the round CDs are cut out in the last production step.
Initial licensee Bertelsmann is enthused.
``The process promises replication speeds up to 500 times as fast as current equipment, and potential [cost] economics of 20 percent or higher, depending on the licensing fees,'' said Uwe Swientek, chief executive officer of the firm's BMG Entertainment Storage Media unit.
``A lot of companies tried to do something similar'' without success, said Karl Kitze, director of capacity and production planning in Weaverville, N.C., for BMG's Sonopress division. Sonopress makes more than 500 million CDs and DVDs annually at nine plants around the world.
Kitze has watched the development for almost two years, since shortly after Sage scientists ``developed the process by accident [while trying] to develop something else.''
Kitze has tested NeuRom CDs, ``and they work,'' he said in a recent telephone interview. Sage formed a subsidiary, NeuRom Technology Inc., to focus on the optical-disc market. Sage will reserve rights to the technology on other products.
``What they need to prove is that they can make a replication line,'' Kitze said.
The NeuRom subsidiary arranged financing with Leybold for conversion ``when we get onto market,'' possibly in mid-1998, Edelkind said. NeuRom and Leybold, based in Hanau, Germany, will develop the precision systems. BMG, based in Gutersloh, Germany, will purchase the systems and then produce NeuRom discs.
NeuRom granted exclusive rights to Leybold to make and distribute NeuRom systems and sell licenses as NeuRom's agent. Leybold is a member of the Balzers and Leybold group.
NeuRom, Sonopress and Leybold announced June 24 that they had formed a consortium.
By mid-August, Edelkind expects Sage to identify a converter to make biaxially oriented sheets from Huntsman Corp.'s PS using equipment that a Japan Steel Works Ltd. unit will manufacture. Sage is talking with four converters, including China Zahongqing Industry Group's AKD unit in Ningbo, China, which Edelkind said is the largest converter of PS in east Asia.
In addition, Sage is in early discussions with possible vendors for the actual coating of the media layer.
Since early 1997, a Huntsman unit has worked with Sage to identify appropriate material for the pilot-scale development, according to Philip Jacobs, director of research and development in Chesapeake, Va., for the resin supplier's polymers division.
``We have to make sure we had a PS grade that met the physical and optical qualities,'' he said.
Huntsman makes the ultraclean PS on a finely tuned line in Belpre, Ohio.
``The molecular weight is as high as we can get commercially,'' Jacobs said.
The technology is best suited for long production runs, Jacobs said, ``but shorter runs of small specialty volumes are almost sure to stay in PC'' for the next two to three years.
NeuRom disc processing is ``radically different'' from traditional manufacturing methods with significantly lower costs for waste abatement and personnel, according to Vincent Reynolds, president of Reynoldstech Inc. in East Syracuse, N.Y.
Reynoldstech assisted Sage in developing wet chemistry processes, he said. A big plus for the concept: ``Encoding and reading stays the same to be backward-compatible'' with existing players.
Reynoldstech specializes in resist-approval and metal-etch technologies for semiconductor and optical media applications.
A side issue has distracted Sage in its effort to commercialize the technology.
In a February 1996 civil suit, the Securities and Exchange Commission said Sage, Edelkind and Chief Financial Officer William R. Thiele violated SEC rules in a $2 million debt offering.
A fraudulent filing contained gross errors, according to the SEC, which ultimately assessed a $23,000 penalty that it said was to cover costs of the probe.
Edelkind blamed former employees for the incident.
``No investor complained,'' Edelkind said. ``I have not admitted wrongdoing, and I cannot deny wrongdoing.''
Thiele left the company, and the matter was wrapped up by mid-1996.
Edelkind founded the firm in August 1994, and the lab ``accident'' occurred in August 1995. Edelkind sees no limits.
``NeuRom's technology is not an extension of an existing technology,'' and the process ``can be extended to make many possible new generations of optical memory,'' he said.
The business has occupied two sites: 3,500 square feet in Smyrna, Ga., and since a February relocation, 12,000 square feet in Marietta, Ga. Another move is imminent. Sage seeks to relocate by mid-October to a 120,000-square-foot building so the company will have prototype facilities, Edelkind said. Two nearby sites are competing.
Sage and its subsidiary employ 26 with Edelkind projecting ``100 within a year.'' The firm exists on research revenue and Bertelsmann license fees, but is ``contemplating large-scale capitalization,'' undefined for now.