Lux Research: Economy blunting growth of nanomaterials

June 24, 2009: As the economic downturn seizes up several nanoenabled product markets, growth has eroded all along the value chain to include nanointermediates and nanomaterials, according to a new report from Lux Research. The firm now projects sales from products incorporating nanotechnology should top $2.5T by 2015, but that’s -21% lower than what the firm had earlier predicted.

Basically, certain nanotechnologies will fare better or worse depending to their exposure to specific end markets — e.g. autos, construction, and electronics are faring worse in these sluggish times, while others — e.g. healthcare, life sciences — should “remain largely unscathed, and recover from the recession more quickly,” notes Jurron Bradley, senior analyst at Lux Research and lead author of the report, in a statement. The report is based on >1000 annual interviews and targeted talks with execs from 15 established companies and startups.

Key findings in the report:

  • Carbon nanotubes and ceramic nanoparticles will suffer due to their broad exposure in automotive and construction industries; nanocomposites and coatings will see big declines.
  • The US and Europe will still account for more than 2/3 of emerging nanotech revenue through 2015, but the new forecast sees each losing about 2%-3% share; Asia-Pacific sales will rise <5% due to its "relatively more competitive automotive industry," the analyst firm notes.
  • As the economy sputters, larger entrenched firms see opportunities to “renew and reposition” their offerings through bargain-basement M&A; meanwhile, “cash-strapped startups” need to conserve cash to wait until markets revive.
  • Changes to government nanotech initiatives will be needed to sustain jobs and GDP growth. “Rather than tax credits, they’ll need to offer more creative incentives like R&D grants to help struggling start-ups survive the recession,” Bradley says.

  • Shocks to the output of nanoenabled products ripple thorugh value chains. (Source: Lux Research, “The recession’s ripple effect on nanotech,” June 2009)

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