Silicon Rich Oxide UV Sensor: A Feasibility Study

Abstract

OBJECTIVES: The purpose of the project was to identify two technologies from INAOE, Instituto Nacional de Astrofisica Optica y Electronica (INAOE) located in Puebla, Mexico, that were close to market and develop a feasibility study for those technologies in a 10 week time frame. METHODS: Open submission from INAOE researchers was allowed for two weeks. Following open submission a weighted criteria matrix was developed to identify the top eight technologies. Interviews were conducted with the top eight primary researchers and their laboratories over a one week period. Voting was conducted to determine the final two technologies. Research was conducted to analyze and identify the market, provide a business and financial model, and provide recommendations. RESULTS: Results are from the feasibility study of the silicon rich oxide UV sensor one of the two technologies selected. Market: Five markets were identified with combined annual production of approximately 3.5 million sensors per year and an annual expected growth rate of 9.1%. Average selling price of a commercially available UV sensor was approximately $35 per unit. Average selling price for the INOAE was estimated to be $18 per unit. Financial: A financial analysis for a start-up venture to sell and manufacture the sensor estimated gross sales in year 1 to be $2.7M, with a net profit $427K, and EBITDA $719K. The target market share of 2%, effective tax rate 40%, market risk premium 10%, discount rate (Wacc) 20.1%, and no debt was used. Start-up costs included a net investment of $279K. A licensing model $150K with 3% royalty fees from revenue was also considered. CONCLUSIONS: Research and information uncovered in the feasibility study supported a move to patent and license the UV sensor technology and move away from creating a new start-up. A thorough market analysis coupled with a conservative financial analysis allowed for the final decision. Five months from the start of the project, a licensing agreement was signed by INOAE and Impulsora Tack for a deal worth $500K, the first licensing agreement ever for the institute. Another first were patents for the technology, never before were any technologies patented by INOAE since its foundation in 1971. This project was made possible by a grant from the Brown Foundation.