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Lux: graphene severely underperforming commercially against “massive hype”

Market analyst firm Lux Research has maintained a skeptical stance about the commercial prospects of graphene even in the light of the material’s compelling properties. In a 2012 report “Is Graphene the Next Silicon...Or Just the Next Carbon Nanotube?”, Lux examined the interplay between graphene’s compelling performance properties as an advanced material, and the significant hurdles it would inevitably face transitioning from the lab to the marketplace. A research and patent boom along with impressive technical performance is far from a guarantee of commercial success.

Lux is now answering its own question with the assertion that graphene looks much closer to the next carbon nanotube than the next silicon. Reasons the firm gives for this assessment include:

  • Over-aggressive capacity expansions coupled with limited commercial demand. Total global graphene nanoplatelet (GNP) capacity has increased from 120 tons/yr in 2012 to 910 tons/yr today, driven largely by aggressive Chinese capacity expansions such as by Ningbo Morsh (300 tons/yr), and Xiamen Knano (100 tons/yr). However, current GNP demand has yet to exceed 15% of the current supply.

    This metric does not include significant capacity expansions still in progress by the likes of The Sixth Element and Deyang Carbonene Technology, Lux said. Combined with billions of dollars of commercial investment in the material by governments and multinationals—e.g., EU’s Graphene Flagship, National University of Singapore’s Graphene Research Centre, and South Korea’s approved roadmap for graphene commercialization—the severe under-performance becomes even more pronounced, according to Lux.

    Analyst_Insight_Graphic_7_5_15
  • Undistinguished suppliers. Other than a select few, the GNP space is flooded with undistinguished suppliers, Lux said. One exception is longtime market leader XG Sciences, which continues to maintain momentum by receiving investment from Samsung Ventures and will work with Samsung SDI on next-generation Li-ion batteries for consumer electronics. This positive commercial traction is an exception rather than the norm, Lux said.

    Analyst_Insight_Graphic3_7_5_15
    The Long-shot quadrant of the Lux Innovation Grid (LIG) has become choked with start-ups with unproven technical value and business execution. Click to enlarge.

    Even once-promising developers such as Angstron Materials have “lost shine” because of inability to provide cost and performance data around completed storage cells, questionable value proposition, and long road to commercial products. Many Chinese GNP suppliers are selling their products below cost to attract the interest of industry players and offload excess capacity.

  • Lack of concrete commercial performance metrics. The material in raw powder form is a far cry from commercial product-ready. As with MWNTs and other nanomaterials, the ability to maintain the performance of graphene when the material is dispersed in a matrix is a major challenge. Agglomeration and viscosity issues limit the practical loading of graphene as a primary reinforcement or additive in many applications.

    As such, the most salient metrics evaluating graphene’s true commercial value proposition are that of a final device or product (e.g. composite part, battery, supercapacitor, transparent conductive film [TCF]) containing the material, and on this front graphene is “sorely lacking”, according to Lux.

    Further, graphene products need be compelling enough to justify their higher upfront price tags. Lux’s Energy Storage team has found that despite the hype around graphene as a material to displace activated carbon in supercapacitors, graphene will lag behind other active materials and will struggle to beat incumbents.

While the direct commercial opportunity presented by graphene may be limited currently, multinationals may view the space through the lens of arbitrage opportunities and leverage the looming market shakeout to scoop up developers (or their technology portfolios) on the cheap. Lux suggested. Similarly, the GNP supply glut will increasingly present attractive, low-price opportunities for downstream application developers.

Finally, it would be a disservice to graphene film developers to entirely lump them in with their GNP peers. While GNP developers indeed appear poised to repeat the trajectory of their older MWNT cousins, graphene film start-ups, on the other hand, have shifted strategy. While initial hype and attention on graphene film application development focused on TCF segments like displays and touch screens, in the past two years there has been a pivot among developers to sensors to spur revenue growth. … it is at least heartening to observe start-ups reacting to struggles (in this case finally realizing besting incumbents like ITO and other emerging material options like silver nanowires and metal nanoparticles is a daunting challenge) and devising new strategies that take into account critical lessons from the past. Just don’t expect graphene to live up to the untenable hype, or become the next silicon.

—Lux Research

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