Dec 25, 2018,10:26am EST

Smart Sensors The Size Of Dust

Particles Are Blowing In

Jon MarkmanNewsletter
Investing
Analyzing tech stocks through the prism of cultural change.

Computers as small and light as particles of dust are moving out of the
realm of science fiction, according to a recent Wall Street Journal story.

It changes what is possible in computing. It opens up new investment

opportunities.
Employees work in the clean room at Infineon Technologies AG
semiconductor manufacturing facility in... [+]

It is already possible, although not entirely practical, to make computers

the size of a grain of rice. That’s small. However, building wireless devices
the size of dust particles that are fully capable of sensing their
surroundings, computation, communication and self-power would be a
monumental leap.

In August, Gartner Inc., a leading information technology research

firm, added smart dust back to its Hype Cycle for emerging technologies.

Much of the recent push is about timing. Developers are excited about
advancements in sensors, the Internet of Things, fifth-generation wireless
networks and edge computing. Connections are getting so fast and
networks are so powerful, building nanoscale computers finally makes
sense.

The possible applications are mind-blowing …

 • Factory floors will brim with machines smart enough to understand
when maintenance is required.
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• Tiny sensors will monitor farms, giving early warning of crop

damage.

• And cities will be able to keep track of vehicle traffic and people flows.

Computing devices no larger than a speck of dust will connect to powerful

networks and bring new advances in business, medicine and surveillance.

Given the possibilities, is it not a huge surprise that military interests were
at the forefront of early smart dust development …

The Rand Corporation and the Defense Advanced Research Project Agency
began working on microelectromechanical systems way back in 1992. Five
years later, DARPA funded the research of Kris Pister, a professor of
electrical engineering at UC Berkeley.

At the time, Pister imagined a world in which ubiquitous sensors could

measure everything that could be measured. Immediately, he thought
about environmental applications.
Pinpointing weather patterns would be a killer application. His military
benefactors were thinking about tracking people.

Ironically, a decade later, people would begin voluntarily carrying devices

— coupled with private-sector software — that would accomplish the same
thing.

However, smart dust does not require a privacy policy.

In 2016, UC Berkeley researchers published a paper that pushed

microelectromechanical systems (MEMS) far beyond the capabilities of
smartphones, wearables, Facebook and Google.

Neural dust, according to an article in Forbes, will eventually place tiny

sensors inside the human skull to track brain activity.

As far-fetched as it seems, researchers believe they see a path over most of

the stumbling blocks. They have a roadmap to developing devices on a
nanoscale level. They also believe they can overcome the communication
and computing challenges.

Right now, the issue is power. Getting all those sensors juiced up — and
staying connected to the network — seems to defy the laws of physics.

The Journal points out that a smattering of startups is working on silicon

that consumes minuscule amounts of energy. One company, PsiKick, is
building batteryless industrial internet of things

systems using its custom low-power microchips.

Other firms have tried to harness energy from vibration, light, magnetism,
temperature and chemical reactions. Their success has varied. RFID tags,
for example, get their energy from a base station. As the reader accesses the
tag, it comes alive with bags of useful information.
Passive Wi-Fi uses backscatter communication to transmit power to
existing Wi-Fi chipsets. University of Washington engineers were able to
shoot power through walls to off-the-shelf smartphones from 30 feet away.

One of the best ways for investors to play the ultra-low-power trend
is Analog Devices.

In the nearer term, its SmartMesh IP is building a standards-based

ecosystem around energy-efficient wireless networks. It is 8x more energy-
efficient than other standards; networks are scalable, sustainable and self-
healing.

SmartMesh networks make good economic sense for companies that push
computing to the edge of their networks.

Over the longer term, Analog continues to work toward smart dust. Dust
Networks, the company founded by Kris Pister, was acquired by Linear
Technology in 2011. Today, the IP lives on as DustCloud, an Analog Devices
subsidiary.

Analog Devices had $5.1 billion in sales during 2017, an increase of 49%
over 2016. Despite this, like other semiconductor stocks, it has been mired
in a global-trade-induced funk. Trade groups and investors fear the worst is
yet to come as the trade war escalates.

Analog trades at only 13x forward earnings. The market capitalization is has
fallen to $30 billion. Given the outlook for innovative products, like smart
dust, this valuation seems low.

Investors can buy the stock into further weakness over the next few
months.