Nanotechnology: A Realistic Market Assessment

The previous (2004) 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 matured somewhat, it is still there and it is still growing. One of the presenters at a recent conference on nanotechnology cited statistics show that mentions of "nanotechnology" in the popular press have been growing exponentially, more than doubling in 2004 alone.

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:

• Covers nanomaterials (nanoparticles, nanotubes, nanostructured materials, and nanocomposites), nanotools (nanolithography tools and scanning probe microscopes), and nanodevices (nanosensors and nanoelectronics),
• Notes current and potential applications for nanotechnology,
• Addresses global nanotechnology trends and forecasts the total worldwide market through 2011,
• Notes the factors that will influence the long-term development and growth of the market.
• Describes the industry structure, reviews market shares, and profiles the top players in the nanotechnology market.

Report Highlights

• 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 largest end-user markets for nanotechnology in 2005 were environmental remediation (33% of the total market), electronics (24%), energy (15%) and biomedical applications (5%). Electronics and biomedical applications have much higher projected growth rates than other applications over the next five years. As a result, the electronics share of the nanotechnology market should grow to over 50% by 2011, and biomedical applications' share to 8%. Environmental applications' share is expected to decline steeply to 13%, while energy's share falls to 9%.