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Can `New Frontier' Optoelectronics Bridge Gap of Expectations, Hype?

MICROSOFT Corporation is trying to set a new standard for encyclopedias by putting sound and video on its multimedia compact disc encyclopedia. But the company has to be selective, because only so much sound and video can fit on one CD.

The Redmond, Wash., software giant is not the only one facing this storage challenge. United States Census Bureau data on Washington State can fit on one disc; California's data requires several CDs, for example.

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As the information age moves forward, technology is making it easier to zap ideas around, but progress in some areas does not match expectations and hype. The goal of Microsoft founder Bill Gates - ``information at your fingertips'' - remains elusive.

A field of research known as optoelectronics promises to help bridge the gap. The technology taps capabilities of light and electronics. It could capture global markets with $230 billion in annual sales in the next decade, an industry group says. ``[Optoelectronics] is ... perhaps the most significant set of new technologies since semiconductors,'' says David Cheney, executive director, Optoelectronics Industry Development Association. Four key markets are data storage (such as CDs, which use laser light to read information), flat-panel displays (used in portable computers), fiber-optic communications, and hard copy (such as laser printers, copiers, and scanners).

Industry group members say they hope that in the next cycle of product development they will not be left behind by overseas competitors. That is what happened with flat-panel-display technology, developed a few decades ago in America but now manufactured almost wholly by Japanese firms. They started producing pocket calculators and digital watches and now make virtually all portable computer screens. In such an industry, with high start-up costs, the presence of high-volume producers such as Hitachi, Toshiba, and Sharp can make potential competitors think twice.

To help nudge American companies to take a second look, the Clinton administration recently announced a $580 million program to foster a domestic display industry. The industry association applauds the move, arguing that some cooperation among companies, universities, and government is needed in all four main areas of optoelectronics.

While the Pentagon's Advanced Research Projects Agency views domestic production in several areas as crucial to national security, critics are skeptical of government getting too involved in developing commercial products. The debate is familiar with other government-industry partnerships, such as the Sematech computer-chip consortium.

In a November poll by H&M Consulting of Sunnyvale, Calif., almost all company executives who buy flat-panel displays said they want America to be a key display-industry player. But only 22 percent of nondefense executives wanted government investment.

Yet others say a huge market could be lost: Worldwide sales of equipment using flat-panel displays total $54 billion and are forecast at $150 billion by 2003.

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New federal research money will go to companies manufacturing products, perhaps those targeted at new technologies that could leapfrog current methods. One recipient may be Motif Inc. of Wilsonville, Ore. The company, which built a display plant, says its systems are easier to make and may be cheaper than technology used by Japanese firms.

In hardcopy, the optoelectronics industry group seeks a minor government role: setting a technical standard for printing color images.

In communications equipment, US firms are ``reasonably competitive,'' Mr. Cheney says. Since most long-distance telecommunications are done by fiber-optic cable, the key growth area is in short-distance connections. Here, cooperative research could help lower the cost of components, while government efforts to speed development of the ``national information infrastructure'' would spur demand.

In data storage, Japanese firms are key players in audio and computer CD players. But technology is changing in an effort to boost disc capacity and make cheaper ``rewriteable'' discs, allowing consumers to create and modify text, audio, or video information.

The industry association says an expected shift to green- or blue-laser technology presents ``a significant opportunity for the US industry to reenter the business.'' It calls for government-industry research leading to low-cost manufacturing. The association also predicts a gradual shift from CDs to rewriteable magneto-optic technology, now offered by Sony in its audio MiniDiscs. Down the road, three-dimensional holographic data storage is possible.

The $9 billion global market for optical storage devices is forecast to grow to $31 billion by 2003, not including the value of intellectual property such as musical recordings on discs.


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