Nanotechnology: A Realistic Market Evaluation

Report Highlights

• The total global demand for nanoscale materials, tools and devices was estimated at nearly $7.5 billion in 2003 and is expected to reach $28.7 billion in 2008, at an AAGR (average annual growth rate) of 30.6%.
• The nanomaterials segment, with some long-established markets, presently accounts for more than 97% of sales. By 2008, this share will have shrunk to 74.7%.
• The fastest-growing nanomaterials are nanotubes (with an expected AAGR of 173%) and nanocomposites (76% AAGR).
• Nanotools will increase their market share to 4.3% in 2008 and nanodevices will have established a major presence with a 21% share.

INTRODUCTION

The promise of nanotechnology has created lofty expectations in some quarters. The U.S. National Science Foundation is on record as predicting that the market for nanotechnology, or products containing nanotechnology, will reach $1 trillion in 10 to 15 years. Along with high expectations, nanotechnology also evokes fear in certain individuals.

Nanotechnology, for the most part, remains a set of solutions in search of a problem. In addition to critics and novelists, this uncertainty about the future of nanotechnology creates difficulties for investors who sometimes have difficulty separating reality from hype. This report takes a hard look at the nanotechnology field, and provides a road map for the technologies and applications that are most likely are to be commercialized in the next five years.

While it appears inevitable that nanotechnology will have a broad and fundamental impact on many sectors of the U.S. economy, various technical, marketing and other hurdles must be overcome before nanotechnology fulfills this promise. These challenges, and differences of opinion regarding their commercial implications, are reflected in the wide divergence among existing estimates of U.S. and global nanotechnology markets.

This BCC report provides investors and others with information on the realistic commercial potential of various nanotechnologies, and complements the growing body of technical information. It identifies segments of the nanotechnology market with the greatest commercial potential in the near to mid-term, projects future demand in these segments, and evaluates the challenges that must be overcome for each segment to realize successful commercialization.

SCOPE OF STUDY

The report contains:

• An overview and definition of nanotechnology
• Coverage of milestones in the development of nanotechnology
• Analysis of current and potential nanotechnology applications
• Analysis of applications and end users with the greatest commercial potential through 2008
• Forecasts of global nanotechnology market trends through 2008, including nanomaterials, nanotools and nanodevices
• Discussion of the factors that will influence long-term development
• Market shares and industry structure.

METHODOLOGY AND INFORMATION SOURCES

Projecting the market for emerging technologies, such as most nanotechnology applications whose commercial potential has not yet been proven, is a challenging task, which may help to explain why most analysts so far have focused on supply-side technology assessments. This report uses a multiphase approach to identify the nanotechnology applications with the greatest commercial potential and quantify the market for these applications, as described below.

In the first phase of the analysis, we identify a 'long list' of potential nanotechnology applications (including applications that are still under development) and map them against potential end-user industries, such as information technology/electronics, biotechnology, and health care. In the second phase, we eliminate those nanotechnology applications that appear to have little likelihood of making it into commercial production in the next 5 years. This is accomplished through a literature review and interviews with industry sources. The result of phase two was is a 'short list' of applications and end-user industries with the greatest near- to mid-term commercial potential.

The third phase is focused on quantifying the potential broader market for each short-listed nanotechnology application and identifying the main prerequisites for commercial success. Various methodologies and data sources were used to develop the projections, including trend-line projections, input-output analysis, and estimates of future demand from industry sources.

ANALYST CREDENTIALS

Andrew McWilliams, the author of this report, is a partner in the Boston-based international technology and marketing consulting firm, 43rd Parallel, LLC. He is also the author of numerous other Communications Co. studies, including several studies on emerging technologies, such as C-140N Trends in the Noninvasive and Minimally Invasive Medical Device Market, B-182 Medical Robotics and Computer Assisted Surgery Market, and GB-285 Emerging RF Technologies.