Behind the Nanoelectronics Hype

In an attempt to cut through some of the hype, I recently commissioned a comprehensive survey of nanotechnologies’ impact not only the semiconductor market but also its influence on consumer electronics from mobile phones to MP3 players (see the image on the right).

This is now available as a 313-page report and gives a definitive overview of the full spectrum of the electronics industry and how nanotechnologies are being, and will continue to be, applied, providing timelines of adoption and market size forecasts. The 170 tables, figures and charts illuminate the complex connections between technology and product that allude much of the hype surrounding nanotechnology’s role in the electronics industry. While molecular memories or IBM’s still-to-be-commercialized Millipede technology have been touted as revolutionizing the electronics industry, it has been the applications of basic science such as the nanometer thin films enabling GMR (Giant Magneto Resistance) that has provided the iPods we use today.The combination of multiple functions into one device such as the iPhone is placing a higher burden on the technological specifications of the devices, requiring higher integration and density in devices, larger data storage, and better battery life. While mobile devices have reshaped electronics markets to the extent where the memory market now goes primarily to supplying mobile devices rather than PCs, improved battery technology and better data storage still remain an obstacle for wider use and functionality.

Nanotechnology has already had an impact in both data storage and batteries. In 2006, Hard-Disk Drives (HDDs) enabled by giant magnetoresistance (GMR) accounted for $25 billion in 2006 with 450 million units shipped, while 60% of the of Li-Ion batteries used are already using nanofibers.

As a result, the report finds that over the next eight years the nanoelectronics market—consisting of components, batteries, and instrumentation and tools—should experience its strongest growth between 2007-2010 with a slowdown to about 10.5% CAGR from its 22% CAGR in 2007-2010. However, this is just a precursor to the truly disruptive growth that will occur after 2020 when all indications are that CMOS will have reached its physical limitations.While we are using ‘nano’ and ‘markets’ in the same sentence it may be worth clarifying what we mean. There are a couple of ways at looking at what the size of the “nanoelectronics” market will be. For one, you can simply look at the sale of nanomaterials and nanotools into the electronics market to calculate market size. For instance, this would involve saying that if one ton of carbon nanotubes were sold into the electronics industry to make various electronic components, you would simply calculate the price per ton for carbon nanotubes to derive the market size.We mean the product or component would not be possible or have application in electronics if it were not for nanotechnology. This is quite different from saying, for example, that the value of nanotechnologies in the automotive industry should be based on the total value of a Mercedes Benz because a nanomaterial was used in its coating. But by our measure, it is fair and accurate to say that the full value of that coating should be taken into account when calculating the value of nanotechnology for the automotive industry because it would not have any use for the application otherwise.

By this measure, and bringing back our example of GMR making possible high density hard disk drives (HDD), it is accurate to say that of the 450 million HDDs enabled by nanotechnology delivered last year, nanotechnology should be attributed with producing that $25 billion in revenue. On the other hand, it would not be accurate to calculate the full value of all the desktop and laptop computers, Xboxes and iPods that contain these nano-enabled HDDs.

In short, when looking at the market value of nanoelectronics we can include the value of electronic components that they enable, but not the full products that these components create.

With this understanding, nanoelectronics will make up nearly 50% of the entire electronics components industry by 2010, which translates into a $120 billion nanoelectronics market by that year.  By 2010, nanotechnologies will constitute a $130 billion market within the electronics industry.



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