WASHINGTON โ€” The rising demand in the defense and aerospace industries for miniaturized electronic systems is expected to boost the fortunes of ร…AC Microtec, a small but growing Swedish nanotechnology company.

It specializes in microelectronics and micro-electro-mechanical system (MEMS) technology. The computer controls developed by ร…AC Microtec for satellites and aircraft are generally the size of a postage stamp and weigh about 3 grams, reducing the platformโ€™s weight and payload.

ร…AC Microtecโ€™s recent $3 million deal with the U.S. Air Force and ambitious expansion plans will position the company as a global leader in its niche product areas, said Mats Magnell, who became managing director Oct. 1.

โ€œI am walking into a strong and growing company with talented and driven staff,โ€ Magnell said. โ€œMy goal is to continue to raise the bar for what we can achieve with our miniaturization technologies in the military and industrial sectors.โ€

ร…AC Microtec had 21 employees and $3 million in revenue at the end of 2008. Founded in 2005, the privately owned company was known as ร…ngstrรถm Aerospace before it changed its name last November. Its clients include the European Space Agency, the U.S. Air Force Research Laboratory, the Swedish National Space Board, Saab Aerosystems and BAE Systems Bofors.

The companyโ€™s expansion will be steady rather than rapid, said Kjell Lindqvist, ร…AC Microtecโ€™s chief financial officer. โ€œOur plan is to grow in a controlled manner. We are now expanding our work force, although there is a shortage of qualified MEMS designers,โ€ he said. โ€œWe are also investing quite heavily in our laboratories, among other things creating our own clean room resources.โ€

The company is creating new divisions to expand its market reach. Fredrik Bruhn, a company founder and former chief executive, will direct ร…AC Aerospace, which delivers nanotechnology systems to defense and aerospace customers. The industrial applications unit also will expand.

ร…AC Microtec bills itself as an international leader in developing and manufacturing 3-D systems-in-packages, with a five-year head start on the rest of the market.

โ€œSpace applications will remain our core business, but our technology has a lot to offer to other customers also,โ€ Lindqvist said.

In January, ร…AC Microtec became Swedenโ€™s first nanotechnology company in space when it supplied a MEMS subsystem to Sprite-Sat, an Earth observation satellite built by Japanโ€™s Tohoku University. But the companyโ€™s potential for growth became evident Sept. 23, when India launched an orbital rocket bearing the RubinSat 9.2, an experimental spacecraft that carried nanosatellite electronic components supplied by ร…AC Microtec. They included miniaturized computers, control systems and digital mass memories for testing in space.

Robert Thorslund, a project manager with the company, said the space mission is the start of โ€œa revolution which makes it possible to fly very advanced instruments on small satellites in the future using miniaturized control electronics.โ€

With the launch, ร…AC Microtec became the first company in the world to demonstrate a nanosatellite equipped with 3-D wafer level packaged microelectronic and MEMS technology, Thorslund said.

The nanosatelliteโ€™s architecture is called INOVATOR, short for In Orbit Verification of ร…AC Technologies on Rubin. It consists of miniaturized subsystems for data handling, communication, attitude control and digital mass memories. โ€œThis was the first time that a nanosatellite system entirely built in a 3-D packaging technology is demonstrated in space,โ€ Thorslund said.

โ€œUsing INOVATOR, we demonstrate the basis for the small satellites of the future; the total mass of our subsystems is only 120 grams.โ€

The INOVATOR technology, along with robust demand from ร…AC Microtecโ€™s defense and industrial clients, will help the company rapidly expand its global operations, said Lars Nielsen, an industry analyst in Copenhagen, Denmark. The recent U.S. Air Force contract โ€œis a signal of ร…AC Microtecโ€™s growth potential,โ€ he said. โ€œThe $3 million size of the order should not diminish its significance. The โ€ฆ companyโ€™s reputation as a supplier of patented advanced electronics and sensor packaging is growing. It is now a world leader and key player in its nanotechnology segments.โ€

ร…AC Microtec could feasibly achieve a 100 percent to 150 percent annual growth rate in sales in the next five years, Nielsen said. While it remains to be seen how the impending growth is managed, the company has several positives in its favor, he said.

โ€œHistorically โ€ฆ rapid implementation of advanced micro technologies and MEMS in space missions could be impeded by [the lack of] opportunities for space validation,โ€ Nielsen said. โ€œThis was referred to as the Catch-22 Valley of Death for new technologies, since they could not be flown unless they had flown before. ร…AC Microtec is a giant step ahead of the competition in this respect.โ€

Under the U.S. Air Force deal signed in August, the partnership includes FMV, Swedenโ€™s defense materials procurement agency. The alliance will develop technologies for electronic standardization and miniaturization for Swedenโ€™s Gripen fighter jet and U.S. Air Force aircraft. The initial objective of the alliance is to identify ways to manufacture electronic components up to 300 times smaller than current ones. The three-year deal will see Sweden become the first country in the world to deploy the U.S.-developed Space Plug and Play Avionics (SPA) standard for miniaturizing electronic systems, including aviation-related electronic microcomponents. ร…AC Microtec will develop advanced subsystems for the SPA. โ€œThis is a very significant contract for ร…AC Microtec,โ€ said Rickard Nordenberg, a strategic technical adviser to FMV. โ€œIt recognizes the company as having the potential to become a leading global developer of space and aviation components based on the SPA standard.โ€

ร…AC Microtecโ€™s task will be to find ways to reduce printed circuit board parts and components, as well as the size and weight of computers, sensor gear and electronic warfare equipment.