CORRECTED - New invention addresses lithium battery fires

* New material may stop lithium battery fires, explosions

* Developer says solution may come to market in early 2010 (Corrects spelling to Alex Peng throughout, not Pang)

By David Lawsky

SAN FRANCISCO, Nov 11 (Reuters) - A new technology to prevent lithium-ion batteries from catching fire or exploding in laptops and mobile phones may be on the market as soon as the first quarter of 2010, its inventor said on Wednesday.

The invention, called Stoba, was developed at the Industrial Technology Research Institute (ITRI), Taiwan's national research organization.

When lithium-ion batteries develop internal shorts they can quickly heat up to as much as 500 degrees centigrade (932 degrees Fahrenheit) and catch fire or explode.

Stoba sits between the positive and negative sides of the battery and when the battery hits 130 degrees centigrade (266 degrees Fahrenheit), Stoba transforms from a porous material to a film and shuts down the reaction.

"We have introduced a totally new material to the battery," said Alex Peng, the senior researcher who led a team that developed the new material over four years.

The danger of exploding lithium batteries is so great that last month the U.S. Transportation Department issued a "hazardous materials" notice.

"Many persons who ship lithium batteries do not recognize the hazards... fires in aircraft can result in catastrophic events presenting unique challenges not encountered in other transport modes," the government said.

Peng said battery makers in Taiwan are in the testing stage and have ramped up manufacturing of Stoba-equipped cells to the thousands. They expect to begin shipping in the first quarter of 2010, he said.

Peng, in Orlando, Florida, to get an award, said by phone that Stoba will add only two percent to three percent to the cost of manufacture. He said he wants to try selling the technology to major laptop and phone manufacturers.

Potential customers include Sony Corp (6758.T), Dell Inc (DELL.O), Hewlett-Packard Co (HPQ.N), Acer Inc (2353.TW), Apple (AAPL.O), Nokia Corp (NOK1V.HE), and others.

ITRI has applied for 29 patents in the United States, Taiwan, Korea, China and Japan for Stoba. ITRI holds 9,863 patents and has 5,800 employees, including 1,112 with doctorates. It has created 151 start-ups and spin-offs. (Reporting by David Lawsky; Additional reporting by John Crawley in Washington; Editing by Tim Dobbyn)