Nanotechnology: A Realistic Market Assessment
- The global market for nanotechnology will increase from $11.6 billion in 2007 to an estimated $12.7 million by the end of 2008. It should reach $27 billion in 2013, a compound annual growth rate (CAGR) of 16.3%.
- Nanomaterials dominated the market in 2007, accounting for 87% of the total market. This is expected to decrease to 69.2% by 2013.
- Electronics, biomedical and consumer applications have high projected growth rates of 30.3%, 56.2% and 45.9% over the next 5 years.
The previous (2006) edition of this report began by noting the hype, both positive and negative, that surrounds nanotechnology. The hype has arguably grown less extreme in the last 2 years: Today, rosy projections of a "trillion dollar" nanotechnology market in 10 years or apocalyptic predictions about a "Faustian bargain" or a "Pandora's box" are heard less often.
However, while the hype may have slowed somewhat, it is still there and the evidence suggests it is still growing. Growing public awareness combined with the complex, diverse nature of the technologies that are commonly grouped together under the heading of nanotechnology virtually invites misunderstanding, if not actual misrepresentation. For example, in 2004 the New York State Attorney General's office was asked to investigate charges that the "nano" label was being used to promote questionable stocks to credulous investors. In response to the charges, Merrill Lynch revised its nanotechnology stock index, dropping six companies it said do not meet its definition of companies that are heavily involved in nanotechnology.
Stockbrokers are not the only ones to misunderstand or misuse the nano prefix. Business, academia, the media all have an incentive to attempt to cash in on nanotechnology. Various manufacturers have tacked "nano" onto their products and processes, whether or not they deal in nano-size elements, in an attempt to boost sales. Companies that have nothing to do with nanotechnology have "nano" in their names to make them sound more technologically advanced than the competition. Some academic researchers worry that the nano buzzword is being misused to bring in research dollars for dubious technologies and applications, at the expense of legitimate research.
Hype inevitably carries with it the risk of a backlash, because it can create unrealistic expectations for nanotechnology. Then, when expectations are not met, people tend to withdraw or worse turn oppositional. As a result, legitimate nanotechnology products and applications are hurt along with the rest, as funding and markets dry up.
The dot.com boom and bust provides a cautionary example of the dangers of hype, but nanotechnology has a more tangible nature because it is a set of technologies. Nevertheless, nanotechnology for the most part remains a set of solutions in search of a problem. This report takes a hard look at the nanotechnology field and tries to provide a road map to the technologies and applications that are most likely to be commercialized in the next 5 years.
SCOPE OF STUDY
This report contains:
- Descriptions of various types of nanotechnologies including nanomaterials (nanoparticles, nanotubes, nanostructured materials, and nanocomposites), nanotools (nanolithography tools and scanning probe microscopes) and nanodevices (nanosensors and nanoelectronics)
- The current global market status for nanotechnologies, with trends and forecasts for growth over the next 5 years
- Emerging nanoscale technologies and applications such as nanoparticulate fabric treatments and rocket fuel additives
- Discussion of factors that will influence the long-term development of nanotechnology.
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 many analysts focus on supply-side technology assessments. A multiphase approach was used in the preparation of this report 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, BCC Research identifies a long list of potential nanotechnology applications (including applications that are still under development) and mapped them against potential end-user industries, such as information technology/electronics, biotechnology, and health care. In the second phase, BCC eliminates those nanotechnology applications that appear to have little likelihood of making it into commercial production in the next 5 years. This was accomplished through a literature review and interviews with industry sources. The result of phase two is a short list of applications and end-user industries with the greatest near- to mid-term commercial potential.
The third phase focuses 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.
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 the author of numerous other BCC Research nanotechnology studies, including the predecessor to this study Nanotechnology: A Realistic Market Evaluation (NAN031B); Nanostructured Materials for the Biomedical, Pharmaceutical, & Cosmetic Markets (NAN017D); Nanostructured Materials for Energy, Catalysis & Structural Applications (NAN017E); Nanostructured Materials: Electronic/Magnetic/ Optoelectronic (NAN017F); Nanotechnology in Energy Applications (NAN044A); Advanced Ceramics and Nanoceramic Powders (NAN015E); Nanocomposites, Nanoparticles, Nanoclays, and Nanotubes (NAN021C); Nanopatterning (NAN041A); Nanotechnology in Life Sciences Applications (NAN038A); Nanotechnology for Consumer Products (NAN037A); Nanotechnology for Photonics (NAN036A); Nanocatalysts (NAN028A); Nanosensors (NAN035A).
BCC estimated the global market for nanotechnology products at nearly $9.4 billion in 2005 and over $10.5 billion in 2006, growing to about $25.2 billion by 2011 (an AAGR of 19.1% between 2006 and 2011). This figure includes established commercial nanomaterials applications, such as carbon black filler for inkjet inks, nanocatalyst thin films for catalytic converters, and new technologies such as nanoparticulate fabric treatments, rocket fuel additives, nanolithographic tools, and nanoscale electronic memory.
Nanomaterials, particularly nanoparticles and nanocomposites, dominated the nanotechnology market in 2005, accounting for over 86% of the market. Nanotools accounted for 10% of the market, and nanodevices the remaining 4%. Nanotools, which include the nanolithographic tools used to produce the next generation of semiconductors , are projected to grow at a much faster rate than either nanomaterials or nanodevices, and as a result their market share should increase to 30% by 2011.
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.