Eric W. Pfeiffer
Small Times Correspondent
March 11, 2002 -- In what is likely to poke one more hole in the technology bubble, a report released this morning places the nanotechnology industry at a mere $30 million in annual sales.
Previous reports have placed sales at $45 billion or more than 1,000 times larger.
Where other organizations have used a liberal definition of nanotechnology -- for example, by including microelectromechanical systems (MEMS) -- Cientifica's "Nanotechnology Opportunity Report" focuses only on technology that is both sub-100 nanometers and "new."
"It's no good to define nanotechnology as something that just happens to have dimensions of a few nanometers," Harper said. The report, therefore, does not include such things as carbon black in tires, even though the material is measured in nanometers, because it is not new. It also does not include the semiconductor industry, which has long worked at the atomic level.
The authors say the report -- compiled in partnership with nAbacus, a nanotech consulting company based in Hong Kong -- is the first to look at nanotechnology from a business, technology and global perspective. It shows that despite the nanotech industry's small size, it is surprisingly robust.
The report says that 470 nanotechnology companies are evenly distributed throughout North America, Asia and Europe, although three countries hold the lion's share: Japan, Germany and the United States, according to the report. Government and corporate R&D funding has reached $4 billion.
In some subsectors of nanotech, such as the production of nanotubes, the industry could even be called mature. Fifty-five companies are competing to make resilient tubes of graphite that are thought to strengthen and lighten materials. The largest percentage of companies, about 155, are selling the tools to develop the technology. These two sectors, say the authors, are poised for a competitive shakeout.
Nanotechnology, as the report bears out, is equal parts pie-in-the-sky science fiction and potential business blockbuster. For every mention of a self-assembling nanocomputing is an example of a company already selling a nanotech product in the market. In fact, even the most esoteric nanotechnology endeavors have a startup working in the space, and oftentimes more than one. There are no fewer than 18 companies working with quantum dots, which have been called programmable matter -- the 21st century's attempt at alchemy.
Like its close cousin MEMS, nanotechnology is an important enabling technology that will have a deep impact across a number of different industries. One of the largest and most overlooked by the media is the use nanocomposites to make everyday objects lighter and stronger, says the report. About 140 companies are working with some form of nanoparticle. Nanocomposites based on clay are currently being used in the packaging industry.
Among the other industries affected in the short term (up to three years) include tools and catalysis, a technology that makes a chemical reaction occur quicker. In the medium term (3-7 years), nanotechnology will make an important impact on the aerospace industry. "Aerospace manufacturers are eager today to adopt new materials that offer a 3 percent reduction in weight," report says. "Nanocomposites ... are already making their way into cars ... (and) are achieving 10-15 percent weight improvements today, with a promise of 20-25 percent."
Medicine, particularly drug delivery and bioanalysis, will also be affected by the nanotech industry, as well as batteries and fuel cells. "Nanoparticle- and nanotube-based batteries are expected to yield a 10 to 20 percent increase. ... Of vastly more significance is the projected 100-fold decrease in charging times," report says.
Before we see such improvements, say the authors, a number of industry bottlenecks will have to be broken. Numerous companies are working with nanotubes but, the report says, the material can still be expensive -- $300 to $1,500 per gram. The cost will need to be reduced to a few dollars or a fraction of a dollar if companies are ever to use large amounts in new types of materials.
The report stretches an impressive 174 pages, not including a directory of companies and research institutions, and includes thorough descriptions of all aspects of the technology and the market opportunities across industries. Its sheer comprehensiveness and conservative nature is its strongest suit and may help to reset an industry that has suffered, like the rest of tech, from too much hype.
"I applaud a conservative approach," said Gilbert V. Herrera, deputy director of business development at Sandia National Laboratories in Albuquerque, N.M. "It's nice to see that irrational exuberance did not carry them away."
Some industry reports, however, can fall into the trap of relying on secondary sources, increasing the chance for errors or duplication of information already widely known, according to Marlene Bourne, a MEMS analyst for Cahners In-Stat/MDR.
The Nanotechnology Opportunity Report uses information gathered from market research firms and the mainstream press. Sometimes, the source of a figure used in the report is not mentioned, in particular the 95 venture capitalists who have invested in nanotech.
LaMar Hill, director of business development at Albany NanoTech at the University of Albany, wasn't surprised by the report's predictions of short- and medium-term market impacts. "They aren't revealing anything that new," he says.
Still, the report is large and comprehensive enough to hold a few surprises for novices and experts alike. A few examples:
- The Swiss, with a population of 3.5 million and government funding of $36 million, has the highest per capita spending on nanotechnology in the world.
- A commercial fuel cell based on nanotechnology could be available in two to three years.
- There has been a surge in nanotech patent filing in the last two years, more than quadrupling since 1999.
- In August 2001, students at the University of Idaho grew a nanospring out of boron carbide. The purpose? A tiny spring in a nanomachine.
- There are at least 20 companies ramping up for mass production of fullerenes, also known as buckyballs. They are 60 carbon atoms that form a sphere and are potential molecular machines. They've been touted as conductors, semiconductors, superconductors and drug-carrying capsules. The prices of fullerenes are expected to drop from $20 a gram to as low as 20 cents by 2004.
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