A Tyneside company hopes to lead the world developing microchips made with diamonds instead of silicon for commercial use.
Newcastle University-owned Inex is making the new chips, which are expected to be able to operate in much greater extremes of temperature, and will go into technology mobile phone base stations and satellites.
The fast-growing company, which expects a £3.5m turnover this year, has won a £500,000 contract for the innovative work with a company owned by world famous diamond business De Beers, and semiconductor maker Filtronic, which has a massive plant in Newton Aycliffe, County Durham.
Inex has signed a contract which gives De Beers subsidiary DMD the rights to exploit the work created. But Inex has retained the right to sell the chips for biomedical use, which it feels has great potential. The Newcastle company is also hopeful of winning a manufacturing contract for the diamond-based chips - but has not said how much this might be worth.
Inex managing director Professor Ken Snowdon said: "We believe that this marks an important step for Inex. The collaboration with DMD gives us the opportunity to work at the cutting edge of next generation technology."
The Inex team is optimistic the contract win with DMD and Filtronic will be one of several such pieces of business in the coming months and years.
Inex commercial manager George King said: "This is really at the outer edges of the parameters of semiconductor devices. The implications are such you can make very, very small devices which are very resistant to heat, and capable of handling the power required for communications devices like base stations for mobile phone networks."
Mr King said Inex would be well placed to win manufacturing work on the diamond-based microchip.
He said: "With the volumes we are looking at for this market, we would be capable of doing that work here. If the volumes were too large for us to handle, we could find a larger partner.
"We are growing at a rate we believe is sustainable. This is the largest contract we have won to date."
Inex (Innovation in Nanotechnology Exploitation), has grown rapidly into a significant player in its marketplace and has doubled its staffing from 20 to 40 in the last two years.
Its growing reputation led to the contract with DMD (Diamond Microwave Devices), a subsidiary of De Beers' company Element Six (E6), and Filtronic to develop the new microchip.
Dr Richard Lang, general manager of DMD, said: "The impressive facilities and expertise within E6, Filtronic and Inex should help us achieve our ambition of creating diamond MESFETs (metal semiconductor field effect transistor) that could revolutionise the design of future microwave power modules."
The diamond to be used in the chips made by Inex, DMD and Filtronic, is man-made - known as CVD (chemical vapour deposition) diamond. Mr King said it was not valuable in the way that diamonds for jewellery are valuable. Inex's headquarters has benefited from major government investment programmes from the European Commission, Department of Trade and Industry, and regional development agency One NorthEast, to make it one of the most advanced of its type in the UK.