Superconductor companies form alliance on manufacturing technology; $5.6 million ARPA funding to support development effort.

SANTA BARBARA, Calif.--(BUSINESS WIRE)--Aug. 16, 1995-- Superconductor Technologies Inc. (NASDAQ:SCON) and Conductus Inc. (NASDAQ:CDTS) -- the two leading companies in high-temperature superconductor (HTS) electronics -- Wednesday announced that they have formed the HTS Thin-film Manufacturing Alliance (HTMA), a consortium effort to further the development of cost-effective manufacturing technology for the production of superconducting thin-film components.

Joining the two superconductor manufacturers will be a variety of university and industrial participants who will add expertise in several key technology areas.

On July 5, 1995, HTMA entered into an agreement with the Advanced Research Projects Agency (ARPA) of the Department of Defense under which it will receive three years of funding, subject to annual renewal, totaling $5.6 million. The participating organizations will contribute a like amount over the life of the project, resulting in a $11.2 million overall effort.

The superconductor companies have identified major near-term markets for HTS technology in wireless communications, radar, electronic defense systems and magnetic resonance instrumentation. Specific products under development at one or both of the companies include filters for cellular base stations, adaptive switched filters for fighter aircraft radar systems and probes for NMR spectrometers.

Superconductor Technologies and Conductus have formed this strategic alliance for the purposes of developing cost-effective manufacturing technologies for HTS thin films; establishing industry standards for substrates, films and testing; and providing second-sourcing and technology transfer between the companies.

HTMA was formed by the two superconductor companies to ensure that sufficient technical resources are concentrated on HTS thin-film materials development to enable both current and future device applications. Electronic components made using HTS technology include the world's most sensitive magnetic detectors, the quietest magnetic resonance receivers and extremely efficient communications filters.

HTS-based devices have also enabled novel military radar systems that are capable of conducting simultaneous offensive and defensive operations while remaining compact enough for insertion into both tactical and strategic platforms.

However, despite the intrinsic performance advantages, HTS technology must be competitive on a cost basis to successfully penetrate high-volume markets. This will require continuing yield and throughput improvements that both Conductus and Superconductor Technologies believe can be most efficiently achieved through this joint program.

William Barker, the program manager for ARPA's Vapor Phase Manufacturing Program, stated: "HTMA has assembled an outstanding consortium team that will apply intelligent processing methods to develop computational modeling, on-line sensing and multivariable control technologies that will lead to cost-effective, flexible manufacturing of superconducting thin-film products for defense and commercial applications."

According to Daniel Hu, president and CEO of Superconductor Technologies, "The HTS electronics community has made great strides in the advancement of wafer fabrication, and with the immediate HTS applications for such booming markets as wireless communications, we expect the HTMA consortium to augment the achievements of the past and increase our ability to produce with even greater quality and at higher volumes in the future.

"We are looking to begin high-volume production of our filter technology for our commercial wireless products in the near future. We anticipate the information exchange facilitated by HTMA to align with our continued growth and help expedite our own ramp-up, as well as the growth of the industry as a whole."

Charles Shalvoy, president and CEO of Conductus, commented: "We are excited to be involved in creating a new electronics industry based on high-temperature superconductor technology. At Conductus we plan to begin commercial shipments to the magnetic resonance instrumentation and the wireless communications markets during the next six to 18 months.

"In order to support these large, fast-growing markets, we need to increase our wafer fab capacity for HTS components. We look at the HTMA consortium as an important step toward developing high-volume, low-cost wafer fabrication technologies for our industry."

Each member of the alliance will retain ownership of intellectual property it develops under the alliance agreement. The non-owner members will receive a license to use intellectual property developed under the alliance agreement in their products. Apart from Superconductor Technologies and Conductus, other participants in HTMA include Stanford University and Georgia Tech University.

New Focus/Focused Research and BDM Federal will provide expertise in thin-film deposition sensor techniques, MSCI will work on process control modeling, and IBIS and Associates will work on cost modeling for the thin-film deposition techniques under development in the program. Scientists at the Naval Research Laboratory and at Sandia (Livermore) National Laboratories will also work on projects that will contribute to the activities of HTMA.

Conductus develops, manufactures and markets electronic components and systems based on superconductors for applications in magnetic sensing, magnetic resonance instruments and wireless communications. Conductus, with headquarters in Sunnyvale, Calif., was founded in 1987 following the discovery of high-temperature superconducting technology.

Superconductor Technologies is a leader in the development of commercial applications for high-temperature superconductor (HTS) and cryoelectronic products for the commercial wireless communications, defense electronics and high-speed computing markets. With headquarters in Santa Barbara, Superconductor Technologies (STI) designs and manufactures subsystems for high-performance applications.

CONTACT: Superconductor Technologies Inc., Santa Barbara

Jim Evans, 805/683-7646

or

Conductus Inc., Sunnyvale

Randy Simon, 408/523-9950