Nano Is Samsung's Silver Lining

Samsung (OTC BB: SSNNF.PK) has received a fair bit of press lately about its nanotechnology-equipped refrigerators, washing machines, and air conditioners unveiled last month at a trade show in Dubai. The South Korean conglomerate notes with some fanfare that the appliances are integrated with silver nanoparticles, which have extraordinary antibacterial properties. Samsung's nano-appliances reportedly eliminate 99.9% of two very harmful micro-organisms: staph and E. coli.

This is not the first commercial application of silver nanoparticles. Nucryst, a subsidiary of Westaim (Nasdaq: WEDX  ) , has been applying a nanocrystalline form of silver to its bandages for a few years. Nevertheless, the Samsung move still makes for good PR. In fact, I think the new product line will even help drive sales among consumers who are meticulously -- even compulsively -- clean. Beyond that, however, the new product line is unlikely to have much of an impact on the company's $58 billion market capitalization.

That's not to say Samsung has it wrong regarding nanotechnology. To the contrary, the company has been actively engaged in nanotech since 2000, and it is more quietly applying the technology to products that really do matter on a large scale -- such as semiconductors, flash memory, and telecommunication components.

The company is working closely with the South Korean government on its national nanotechnology program and stands to become a prime beneficiary of the research. The $100-million-a-year program includes aggressive investments in everything from nanolithography and carbon nanotubes to molecular electronics and quantum computing.

On a more practical level, Samsung is partnering with IBM (NYSE: IBM  ) , Infineon (NYSE: IFX  ) , Xilinx (Nasdaq: XLNX  ) , and Freescale (NYSE: FSL  ) , as well as the Interuniversity Microelectronics Center -- Europe's leading independent nanoelectronics research institute -- on a number of other initiatives to determine how nanotechnology can facilitate the development of next-generation portable-communication devices like digital cameras, mobile phones, and flat-panel televisions.

The fruit of all of these efforts, I suspect, will begin to pay off very soon. In fact, Samsung has already announced that it has constructed an all-nanotube switch in partnership with Cambridge University. The device can rapidly switch routing connections on chips.

It's true that all-nanotube switches aren't as easy for the public to grasp as, say, enhanced germ-killing washing machines. But I'm confident that if investors show some patience, it will be advances such as the all-nanotube switches -- not household appliances -- that will provide the real silver linings in Samsung's portfolio of nanotechnology-related projects.

For related nano-Foolishness, see "Samsung Sets Nano Benchmark."

Fools, now is the time to open your hearts and wallets to worthy causes! Please support our five Foolish charities at www.foolanthropy.com.

Fool contributor Jack Uldrich does not yet fear germs enough to purchase a nano-enhanced refrigerator. He is the author of the forthcoming book Investing in Nanotechnology: Think Small, Win Big. He does not own shares in Samsung but does have modest investments in IBM and Freescale. The Fool has an ironclad disclosure policy.


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