The graphene market has the potential to totally transform the tech sector. Although the nanomaterial is only a decade old, it has already garnered worldwide attention for earning the 2010 Nobel Prize in Physics. And, from an investor perspective, the market is equally exciting. Worldwide, the graphene market is expected to reach $220 million by 2026.
However, despite this sizeable market, there are a lot of unanswered questions about the technology. To dispel these myths and get the truth about graphene, INN turned to industry expert Elena Polyakova to hear her thoughts on the sector.
Polyakova has a long history in the graphene market. As the Co-Chief Executive Officer at Graphene 3D Lab (TSXV:GGG), she was instrumental in bringing the first graphene filament to market. Furthermore, she is the co-founder, CEO and President of Graphene Laboratories, a pioneer in the commercial graphene production market. Polyakova is also a well-respected speaker and educator about graphene. At the time of our conversation, she had just returned from an international conference in Italy, where she spoke with peers in her field about the future of the material.
And so, without further ado, here’s what Polyakova had to say about the nascent graphene industry.
Science behind the technology
Graphene entered the tech market with significant hype. Indeed, it’s initial discovery was so groundbreaking that it won scientists Andre Geim and Konstantin Novoselov the Nobel Prize in Physics in 2010. This award drew a lot of excitement towards the industry, as innovators in the tech sector saw vast potential. However, for some investors – particularly those coming from a mining and graphite background – the science behind graphene remained a mystery.
Graphene is a single-atomic layer of carbon atoms arranged in a hexagonal lattice. Even more basically, it’s a single layer of carbon. Polyakova explains that there are two ways of creating this material: through a process termed Chemical Vapor Deposition, in which gases are decomposed at an elevated temperature, depositing carbon atoms on a metal substrate or by starting with natural graphite and isolating a single-layer graphene sheet. While Chemical Vapor Deposition is expensive process as of now, graphene produced from natural graphite (inexpensive mineral) can be manufactured at reasonable price even today. Over the course of our conversation, Polyakova reveals that the price will continue to go down in the coming years, making the material especially well suited to be used in many commercial applications.
Early hype curve leaves investors wary
The science behind graphene lines up. However, the investing side of things has been a little more tumultuous. The early publicity caused by the Nobel Prize award led to a hype in the industry, with investors rushing to get a piece of the latest technology. However, as Polyakova points out, “early investors may have been disappointed in the market because the technology readiness was not high enough for fast entry into the commercial space.”
Analysts, such as graphene expert Khasha Ghaffarzadeh, agree. At the close of 2014, Ghaffarzadeh told Graphene Tracker that “there is more realism in the industry after the early days in which there was tremendous interest and hope. The rate of company formation in Europe and [the] US has certainly slowed, product concepts are becoming more tangible and companies are finding their focus areas instead of wanting to conquer all the disparate potential, media coverage is a little more subdued [and] company valuations are down even though many institutional investors are staying the course.”
The market has continued to develop in the ensuing year and a half. Investors are still wary of this downturn in the market, but there is growth for intermediary products that reduce time to market and decrease end user uncertainty. For Polyakova, composite materials are the best short-term bet. “Analysts agree that products based on graphene composites will be entering the market sooner,” she tells INN. Composite materials are materials formed by combining two or more materials with unique properties to create a new end material. Although “composite may sound fancy, it’s basically just plastic that has some graphene infused.” Despite the simpleness of this combination, graphene brings about huge potential to the field of plastics. With the introduction of graphene, it’s possible to “make plastic which is much better than the plastic material that is currently available.”
Ultimately, she sees a future where high-end electronics, such as cell phone touch screens, will use graphene. However, it’s “unlikely that that technology will reach commercialization in the next five years.”
Graphene market today
In the past, there were “too many unrealistic promises about graphene.” Many companies were chasing “too many opportunities at once and ultimately failed to deliver on these multiple fronts. And in some cases, companies were just taking advantage of the hype.” It’s the job of investors, then, to “look deeper and do due diligence” in today’s graphene market.
The best bet for investors is to consider companies that “focus and specialize in well defined applications.” For instance, “3D printing is a good example” because “people are willing to pay a high price for high end materials.” In the next several years, “graphene will enter into several more markets, including aerospace, the automotive industry, robotics and electronics.” What unites these industries, explains Polyakova, is “that they are all willing to pay premium price for advanced materials.”
Growth for the future
In the medium term, we’ll see even more expansion of graphene’s reach, as a lower cost makes it more accessible to sectors across the board. “As the price goes down, graphene composites will become more and more popular in many different industries.” The good news is that this future isn’t as far off as investors might believe. “People who are not very knowledgeable about graphene still think that it’s very expensive,” says Polyakova. However, the price for this material is steadily decreasing. According to the report “Graphene, 2D Materials and Carbon Nanotubes: Markets, Technologies and Opportunities 2016-2026,” a continual decline in average sales prices will accompany graphene revenue growth, meaning that volume sales will reach nearly 3.8 tonnes per annum in 2016.
The main problem affecting the market, then, is not cost but rather “processing and expertise.” Essentially, the graphene market is like mining in that, “You must start with very good raw material, if you want to get a good product.” However, “it’s essential to do all technological steps right, otherwise the end product will be poor.” As understanding and experience in graphene processing grows, the graphene market has a bright future.
Instead, it has the potential to dramatically impact specific high tech sectors and, as prices are driven down and production grows, this impact will reverberate throughout the tech sector as a whole. Therefore, the graphene market seems best suited for investors who can see through the chaff to see the real winners in this dynamic and ever-evolving market.
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Securities Disclosure: I, Morag McGreevey, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Graphene 3D Lab is a client of the Investing News Network. This article is not paid-for content.