n the early 1990's, Sabrina Kemeny was among the researchers at NASA's Jet Propulsion Laboratory in Southern California who made spacecraft smaller and cheaper. The key was discovering how to build an optical sensor on a single semiconductor, allowing for smaller components that consumed less power.

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"That was the breakthrough," Ms. Kemeny recalled. "It was a dislocating kind of technology."

Ms. Kemeny and a handful of colleagues were so excited about the photographic applications of this semiconductor that in 1995, over a kitchen table, they created a company to design it for other companies. But their start-up, called Photobit, lacked the size and capital to go ahead and make this "camera on a chip," a type known in the semiconductor industry as a CMOS (pronounced SEE-moss), which stands for complementary metal oxide semiconductor.

The destiny of Photobit changed nine months ago, when Micron Technology, the large semiconductor maker based in Boise, Idaho, bought the company and renamed it Micron Imaging. Ms. Kemeny is director for technical marketing there.

That decade-long journey from the laboratory is part of a new race in the chip industry, where growth in demand has been disappointingly slow for nearly everything. A notable exception is the photographic applications of CMOS. These chips are responsible for products that are just beginning to reach consumers — including cameras within cellphones, cameras in tiny capsules that can pass through the body to diagnose disease and tiny cameras mounted on personal computers. The chips have many other uses in security systems and industry.

Unlike the technology bubble of the late 1990's, a time when fanciful dot-coms without real products raced to overpriced initial public offerings, the race to dominate the market for cameras on chips is an old-fashioned kind of technology battle: Real companies are vying to invent real products that touch millions of consumers.

The older technology that CMOS is beginning to displace is called the charge-coupled device, or C.C.D., invented at Bell Labs in the late 1960's and first used in products like fax machines.

The C.C.D. uses passive sensors, or tiny eyes, that detect light. An outside source of power is required to get the image from the devices, and other circuitry is needed, too. That makes them relatively big and expensive. CMOS chips, by contrast, consist of active sensors that have tiny transistors as power sources. Because of the way CMOS chips are made, sensors and many other processing functions can be placed on one chip.

CMOS technology greatly reduces the amount of power used, allowing batteries to last longer in hand-held devices, but it also provides photographic image quality almost as good as that of charge-coupled devices.
 
N-STAT/MDR, a Scottsdale, Ariz., unit of the Reed Elsevier Group, a publishing and industry research company, says the number of CMOS chips made each year will triple from current levels by 2006. But In-Stat/MDR said sales, which totaled $1.2 billion last year, were expected to rise only to $1.6 billion in 2006 because the price of each chip would decline as production accelerated.

Micron and others define the market more broadly, putting its potential at $4 billion in annual sales. Whichever figures are correct, it's clear that solid growth is occurring in one area of the otherwise depressed semiconductor industry.

Micron, a relatively late entry to the field, has tried to leapfrog toward the front with the technology expertise gained from buying Photobit. Three other major American companies are also in the battle. Agilent Technologies, a Palo Alto, Calif., spinoff of Hewlett-Packard, learned from the published research on CMOS done at the Jet Propulsion Laboratory in the 90's. Its biggest customer is Logitech International, of Fremont, Calif., which makes PC cameras for Dell Computer and others.

The two other companies, Eastman Kodak and Motorola, started a technology alliance in 1997 that makes and sells CMOS chips. The Kodak-Motorola unit sells chips primarily for industrial uses like machine vision, but also for some Kodak digital still cameras.

Two Japanese competitors, Toshiba and Sharp, which have developed their own CMOS manufacturing processes, are generally believed to have a significant advantage. If there is a top potential application for the chips, it could be teenagers' swapping of pictures on their cellphones — already a pastime in Japan. Because Japan has more advanced network systems for its cellphones, service providers like J-Phone can offer camera-equipped cellphones from different Japanese manufacturers.

On long subway and train rides, teenagers while away the time by snapping pictures of their companions and transmitting them to other friends on their phones. "The target market is a 15-year-old Japanese girl with pink hair and a cellphone," said Shawn Maloney, director of marketing for Micron Imaging. "The whole world is watching Japan."

The fact that Japan's chip makers sell to handset manufacturers who, in turn, sell to service providers could give them an important edge, particularly if the market takes off as expected. "Right now, the leaders for CMOS telephones are in Japan," said Brian O'Rourke, a senior analyst at In-Stat/MDR. "Toshiba is probably the leader."

South Korea is also ahead of the United States in cellphone sophistication, and a Korean company, Samsung Electronics, is a major CMOS competitor. In late September, Samsung formed a CMOS manufacturing alliance with Mitsubishi Electric of Japan.

In the United States, a moment of truth may be at hand for CMOS. Several wireless service providers like Sprint PCS and Cingular Wireless offer small cameras that can be attached to cellphones to take pictures and transmit them. But Sprint PCS is expected to start marketing a Samsung mobile device with an embedded camera in time for the Christmas season.

Nokia of Finland is pushing its camera-equipped cellphone, and an alliance of Sony of Japan and Ericsson of Sweden known as Sony Ericsson Mobile Communications says its camera phone will hit the United States market in the fourth quarter.

UNDERLYING cellphone networks are still slower in the United States than elsewhere, but consumers can still capture single still images in color and transmit them. All these new devices use CMOS.

"We have a lot of hopes for this product," said Jason Hartlove, vice president and general manager of Agilent's sensor solutions division. Manufacturers are shipping nearly 400 million cellphones worldwide each year, and Mr. Hartlove expressed hope that a growing number would include CMOS-based cameras at an additional cost of about $5 each.

Aside from finding uses for CMOS, the manufacturers are also trying to make the chips more efficiently. That is where Micron hopes to excel. It is the only American maker of dynamic random access memory, or DRAM, chips, a basic in consumer electronics. Micron survived a battle with the Japanese in the 1980's, only to watch as Samsung Electronics became No. 1 in the world in DRAM chips.

Micron had sales of $2.6 billion in the fiscal year ended Aug. 29, down from $3.9 billion the previous year. It had a net loss of more than $900 million for the year just ended, largely because of falling prices, but the company has $1 billion in cash and is expected to emerge from the current downturn in relatively strong shape because it has kept a strict grip on costs.

DRAM chips are often dismissed as a commodity, but they are a building block of countless electronics devices, including personal computers, personal organizers, set-top boxes, cellphones and game consoles. They are made in a process similar to that used for CMOS. "Our goal is to leverage our advanced CMOS technology and existing infrastructure to establishing a leading position in the expanding imaging markets," said Steven R. Appleton, the chief executive of Micron.

The company is also betting that marrying its mass manufacturing capability with the best CMOS designs from the technology's inventors will raise the quality of images captured on the chips.

Skeptics said "we could never get to the next level of resolution," said Mr. Maloney of Micron. "But we're working our way up the resolution ladder."

Things could still go wrong. Manufacturers could charge too much for their camera phones — Nokia's camera phone, the 7650, is selling for a steep $500 after rebates in Europe. It is also not clear yet whether consumers in the United States will want to snap pictures and send them directly to other mobile devices or to store them first on the Internet.

But after a brutal couple of years in the chip industry, CMOS makers are allowing themselves a measure of hope. Even Kodak, the largest maker of charge-coupled devices in the United States, acknowledges that CMOS chips are improving in quality. Christopher McNiffe, the sales and marketing manager for Kodak's image sensor solutions division, said that "over time, they will clearly become the dominant technology."