Air-conditioning seemed an unlikely topic at the DEMOfall 08 conference. But cutting the cost of air-conditioning is one of the applications of a new chip from Microstaq. Needless to say, it was cool.

The Austin, Texas-based company has designed a micro-machined chip that performs some of the functions in an air conditioner while cutting the costs by 20 percent to 30 percent. The term “micro-machined” refers to a MEMS chip, or micro-electro-mechanical system. That is essentially a chip with tiny mechanical parts fabricated with semiconductor manufacturing technology.

The company designed a MEMS chip that can channel water more efficiently than a typical mechanical device in an air conditioner. Since it is made out of silicon, the MEMS device is more reliable, more responsive, and cheaper to maintain than others.

Microstaq calls its chip a Silicon Extension Valve. The company noted that the Sheraton Hotel, where the DEMOfall 08 conference is being held, had 950 tons of air-conditioning equipment on the roof. With its chip built into air-conditioning equipment, the company said that the hotel could save $122,000 a year in energy bills.

Microstaq has raised a couple of rounds of funding in the tens of millions of dollars. Sandeep Kumar, chief executive, said that the silicon valve opportunity spans multiple industries. Mechanical valves, he noted, amount to a $300 billion a year industry.

The company has no direct competitors but lists Fujikoki Sagoninomiya Danfoss as a secondary competitor. Investors include Yaletown Venture Partners.

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