Arrowhead Subsidiary, Aonex Technologies, Inc., Demonstrates GaN Growth on Proprietary Substrates That Nearly Eliminate Thermal-Induced Bowing.

Announces Low Cost Replacement for Bulk GaN Substrates for Use in the Projected $10 Billion GaN Device Market

PASADENA, Calif. -- Arrowhead Research Corporation (NASDAQ:ARWR) announced today that its majority-owned subsidiary, Aonex Technologies, and partner, Sandia National Laboratories, have demonstrated the growth of gallium nitride structures on proprietary A-Sapph[TM] substrates. Gallium nitride and its alloys (III-nitride materials) are the building blocks of devices such as light emitting diodes (LEDs) and high frequency power amplifiers (PAs). According to Strategies Unlimited, the market for III-nitride-based LEDs will surpass $4B in 2006 and expected to grow to $10B in five years. Aonex's substrate product line, which includes A-Sapph[TM], provides a pathway to dramatically reducing the manufacturing cost of III-nitride LEDs by enabling production on larger diameter substrates, simplifying fabrication of more efficient vertical LEDs, and increasing process uniformity and yield.

A-Sapph[TM] substrates are comprised of a thin layer of single crystal sapphire (< 500 nm) that is bonded to a polycrystalline aluminum nitride support substrate. The resulting substrate has a coefficient of thermal expansion (CTE) that is nearly identical to GaN yet offers an industry standard sapphire growth surface (available in both c- and r-plane sapphire orientations) suitable for MOCVD and HVPE growth environments. Unlike conventional sapphire substrates, the close CTE-match between the A-Sapph(TM) and GaN reduces substrate bowing following growth of III-nitride devices. This reduction in wafer bow could result in higher yield post-growth device processing, especially for HEMT or other device structures where submicron features are desired. In addition to reduced substrate bow, A-Sapph[TM] substrates also offer substantially higher thermal conductivity than bulk sapphire, which may significantly improve growth uniformity through improved substrate temperature uniformity. Taken together, these improved thermal characteristics could enable the scaling of GaN production to larger wafer diameters and corresponding lower device fabrication costs. Aonex has also designed A-Sapph[TM] substrates to enable vertical LED fabrication without laser lift-off.

In the collaboration, Sandia National Laboratories grew GaN on A-Sapph(TM) and sapphire reference substrates using MOCVD. Sandia researchers then characterized the GaN using an x-ray diffraction (XRD) defect estimation technique developed at Sandia. The XRD analysis indicates GaN grown on A-Sapph(TM) has a defect density within 60% of that on the bulk reference. Ongoing efforts at Aonex to optimize the growth surface of the A-Sapph(TM) substrate are focused on achieving GaN quality that meets or exceeds GaN grown on conventional sapphire substrates. XRD also showed that the GaN grown on A-Sapph(TM) substrates had reduced residual strain relative to GaN grown on conventional sapphire substrates. This reduced residual strain is a result of growing on a substrate that is CTE-matched to GaN, thus verifying that A-Sapph(TM) substrates have the potential to address the processing challenges currently encountered with GaN growth on conventional sapphire substrates. Sandia also grew 430 nm InGaN multi-quantum well (MQW) structures on the substrates. The InGaN MQWs grown on A-Sapph(TM) and the bulk sapphire reference exhibited comparable photoluminescence intensity indicating that III-nitride materials grown on A-Sapph(TM) substrates have sufficient optoelectronic performance to fabricate LED devices. Efforts are currently underway to fabricate functional LEDs on A-Sapph(TM) substrates for additional characterization.

In addition to A-Sapph[TM], Aonex also offers A-GaN[TM] substrates which are comprised of thin layers of single-crystal GaN that are bonded to a polycrystalline aluminum nitride support wafer. A-GaN[TM] substrates offer a lower cost alternative to bulk GaN wafers for devices such as laser diodes (LDs) and LEDs.

Aonex is currently sampling its substrates to select device and wafer manufacturers.

About Arrowhead Research Corporation

Arrowhead Research Corporation (www.arrowheadresearch.com) (NASDAQ:ARWR) is a publicly-traded nanotechnology company commercializing new technologies in the areas of life sciences, electronics, and energy. Arrowhead is building value for shareholders through the progress of majority owned subsidiaries founded on nanotechnologies originally developed at universities. The company works closely with universities to source early stage deals and to generate rights to intellectual property covering promising new nanotechnologies. Currently, Arrowhead has four subsidiaries commercializing nanotech products and applications, including anti-cancer drugs, RNAi therapeutics, carbon-based electronics and compound semiconductor materials.

About Aonex Technologies

Aonex Technologies, Inc. is a developer of proprietary substrates that reduce the production cost of devices such as blue LEDs and high-efficiency solar cells. The Company is based in Pasadena, California.

About Sandia National Laboratories

Sandia is a multi program laboratory operated by Sandia Corporation, a Lockheed Martin Company for the United States Department of Energy's National Nuclear Security Administration under contract DE-AC04-94AL85000.

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