1. UNIVERSITY OF CATANIA SCHOOL OF ECONOMICS AND BUSINESS Nanotech Business Models: A multiple case study approach Flavia Li Calzi 28 November 2012

2. Research Structure
What are nanotech business models and how do they work?
Chapter 1:
To give a basic understanding of Nanotechnology, by describing its main features and implications
Chapter 2:
To provide a framework to study the business models
by detecting the concept via a thorough literature review
1. What is nanotechnology?
2. What is a business model?
Chapter 3:
To explain the methodology adopted to study the nanotech business models
3. What is the methodology adopted and the data collection process?
Chapter 5:
To study the nanotech business models from an empirical viewpoint by analysing seven
in-depth case studies
Chapter 4:
To study the nanotech business models from a
theoretical perspective
by providing a taxonomy
5. What kind(s) of nanotech business models do we know
and which ones have recently emerged?
4. What is a nanotech business model?

3. 1. What is nanotechnology?
The understanding and control of matter at dimensions
of roughly 1 to 100 nanometers
A nanometer (nm) is one billionth, or 10−9, of a meter
An emerging technology:
from 1980’s
The key technology
of the 21st century
Different from Microtechnology
From early 2000s nanotech commercial applications
A vaste range of
nanotech applications
In 2008, over 800 nanotech products are publicly available
Positive and negative implications

4. 2. What is a business model?
A statement (Stewart and Zhao, 2000);
A description (Applegate, 2000; Weil and Vitale, 2001);
A representation (Morris, Schindehutte and Allen, 2005; Shafer, Smith and Linder, 2005);
An architecture (Dubosson-Torbay, Osterwarder and Pigneur, 2002; Timmers, 1998);
A conceptual tool or model (Osterwarder, 2004; Osterwarder, Pigneur and Tucci 2005; Teece, 2010);
A structural template (Amit and Zott, 2001);
A method (Afuah and Tucci, 2001);
A framework (Afuah, 2004);
A pattern (Brousseau & Penard, 2006);
A set (Seelos & Mair, 2007).

5. Source: Osterwalder (2004)
Business Model Layer
“A business model describes the rationale of how an organization creates, delivers and captures value”, Osterwalder (2010)
Source: Osterwalder (2004)

6. Source: Osterwalder (2005)
The relationship between Business Model, Business Strategy, Business Organization and ICT
Source: Osterwalder (2005)

7. Source: Osterwalder (2010)
Business Model Canvas
Source: Osterwalder (2010)

8. The nine building blocks aggregated in four pillars
Source: Author’s elaboration from Osterwalder (2010)

11. Vantaggi del Business Model di Groupon:
Un esempio …
Sconti massicci, in un determinato giorno, in una determinata città, sbloccati al raggiungimento di un numero minimo di utenti coinvolti
Vantaggi del Business Model di Groupon:
1. alle aziende viene garantito un numero minimo di nuovi clienti e una buona dose di pubblicità, senza aprire il portafogli;
2. agli utenti vengono proposte incredibili offerte (fino all'80-90 %), senza spostarsi dalle proprie città;
3. a Groupon spetta il 50% di servizio/prodotto in offerta acquistato dagli utenti.

13. 3. What is the methodology adopted…?
The Multiple Case Method Approach
Source: Author’s own work adapted from Pauwels and Matthyssens (2004)

14. …and the data collection process?
February - March 2011
Secondary source: literature review, web browsing, library research, corporate materials, analyst reports, business journals;
April 2011
“Winter School on Emerging Nanotechnologies”, from 28th March to 1s April 2011 organized by the Grenoble Ecole de Management (GEM) in Pinsot (France).
Research period at Grenoble (France), from 2nd to 16th April 2011
twenty interviews have been performed in person, in one-to-one sessions with key managers and CEOs belonging to the Grenoble nanotech cluster;
May - July 2011
Interviews with STMicroelectronics managers in Catania (Italy);
Integration and analysis of the data collected in light of the triangulation;
Application of the multiple case method by reporting the seven case studies

15. Nanotech Setting
Grenoble
Nanotech Cluster
Catania
Nanotech Cluster

16. Nanotech Firms by Target Applications (by Number of Firms)
Source: SEMI (2007)

17. Semiconductor firms’ activities
Source: GSA – Global Semiconductor Alliance

18. technology solutions” “Design and manufacturing work in unison”
4. What kind(s) of nanotech business models do we know and which ones have recently emerged?
High Integration
TRADITIONAL MODEL
“one size fits all
technology solutions”
BEFORE AND LATER 1980’s
IDM
HYBRID
FABLESS
NEW MODELS
“Design and manufacturing work in unison”
FROM MID 1980’s
FOUNDRY
IP HOUSE
TEST HOUSE
DESIGN HOUSE
ASSEMBLY HOUSE
PACKAGING HOUSE
Low Integration

19. Source: Author’s own work
The time arrow for business model changes in the semiconductor industry: IDM vs Fabless vs Foundry business model
Source: Author’s own work

20. Semiconductor firms’ business models and their relationships
Source: Author’s own work

21. “The fabless model is an attractive and popular option for many semiconductor companies. By adopting a fabless business
strategy, a company can focus time and resources on the design of innovative integrated circuits, while avoiding the high cost of building, operating, and upgrading a manufacturing facility” .
“Pure-play semiconductor foundry is a company that does not offer a significant amount of IC products of its own design, but instead operates semiconductor fabrication plants focused on producing ICs for other companies. Companies create their own designs and pay the foundry to manufacture the chips.”

22. Source: IC Insights, USA

23. Source: IC Insights, Strategic Reviews Database

24. Source: IC Insights, company reports

25. Source: IC Insights, USA

26. 5. What are the nanotech business models?
IDM
END USER
2. Nanotech Business Model
HYBRID/FABLITE
FOUNDRY
OEM
3. Nanotech Business Model
FABLESS
FOUNDRY
4. Nanotech Business Model
FABLESS
TEST
HOUSE
ASSEMBLY
HOUSE
PACKAGING
HOUSE
FOUNDRY

27. IDM IDM1 IDM2 IDM5 IDM3 IDM6 IDM4
5. Nanotech Business Model
IDM 1
FABLESS
FOUNDRY
END USER
6. Nanotech Business Model
IDM1
IDM2 1
OEM
FABLESS
FOUNDRY
IDM5
IDM3
IDM6
IDM4

28. The Seven Business Case Studies
IDM
FABLESS
DESIGN HOUSE
TEST HOUSE
FOUNDRY
STMicroelectronics
ST-
Ericsson
Dolphin Integration
Presto Engineering
Tronics Microsystems
Movea
Pyxalis

29. STMicroelectronics’ business model
Source: Based on author’s interviews with Christophe Bernard and Andre Judge (ST Grenoble Site), Maurizio Cairone, Manlio La Duca and Daria Puccia (St Catania Site)

30. Source: Interview with Philippe Rommeveaux – Grenoble, 12/04/2011
Pyxalis’ business model
Source: Interview with Philippe Rommeveaux – Grenoble, 12/04/2011

31. Disintegration of the Semiconductor’s Value Chain
Conclusions
Advent of Nanotechnology
Miniaturization Process
More complexity
Increased Costs
Disintegration of the Semiconductor’s Value Chain
From one high integrated nanotech business model
to many high disintegrated nanotech business models
From large to small nanotech firms

32. THANK YOU