Last week, we looked at the science of nanotechnology -- what it is, where it came from, and where it's going (to the best that we can guess). Today, we'll tackle its commercial opportunities. We'll give you an overview of the three "industries" -- nanomaterials, nanobiotechnology, and nanoelectronics -- that will most use the technology, and some of the companies poised to benefit from the emerging science.
The recent spike in prices of all things supposedly nano requires that we all closely scrutinize the companies in this nascent technology. There are monstrous dragons in this nano space, and careful, thoughtful research is required.
Nanomaterials is a broad term used to describe the "nanocomponents" used to make, or be included as part of, a finished product. For our purposes here, the term nanomaterials includes carbon nanotubes, fullerenes, nano-oxides, nanocrystals, and nanopowders, among others.
The market for nanomaterials is forecasted to grow by 30.6% per annum for the next five years, but the real driver of growth will be carbon nanotubes and fullerenes with an annual growth forecast of 173%.
However, the commercial production of nanotubes and fullerenes is still at an embryonic stage. A few pilot factories have been built to manufacture them, but they cannot keep up with the increasing demand from R&D departments in academia and industry eager to explore commercial applications for their products. One private U.S. company, Carbon Nanotechnologies, and two Japanese industrial giants, Matsushita and Matsui, are at the forefront of developing production processes that promise to bring the price per ton of nanotubes and fullerenes down to a commercially viable proposition.
The production for other nanomaterials is slightly more advanced. For example, Nanocor, the nanotech division of AMCOL International
In biotechnology, the ability to work at the nano level promises to provide the means to precisely locate diseases and precisely deliver drugs to their necessary targets. The two fields that promise to be revolutionized are drug delivery and drug discovery.
As with nanomaterials, however, present-day commercial applications are somewhat more basic and, again, what we detail below is not exhaustive.
In drug delivery, Novavax
American Pharmaceutical Partners
Other companies working on nanoparticulate drug delivery are Elan Drug Delivery, part of Elan Corp.
Drug discovery has already been revolutionized with the introduction of microarrays and lab-on-a-chip technology. Where once it took the effort of a single chemist to view anything from one to 12 gene variations at a time, microarrays can now view thousands in the same time frame. That has produced an industry worth several hundred million dollars. Now, nanoarrays promise to exponentially increase even the volume of microarrays by working at a level far smaller than conventional microarrays.
Some of the leading companies in this field are Affymetrix
Other companies involved in nano drug discovery are Qiagen
In another area of drug discovery, Advanced Magnetics
Working at smaller and smaller levels equates in electronics to more power, more speed, and more applications.
In semiconductors, Intel
The next generation of light-emitting diodes (LEDs) is already entering the marketplace with organic light-emitting diodes (OLEDs) being featured in digital cameras being sold by Eastman Kodak
Whether it is in materials, biotechnology, or electronics, the ability to see and manipulate nanosized "products" depends on the tools of atomic-force microscopes and advanced photolithography. The companies at the forefront supplying all the above industries include Veeco Instruments
In any revolutionary industry -- from trains, planes, and automobiles, and from the telegraph to the Internet -- there has always been a classic investment cycle of initial boom, followed by bust, followed by the real money being made by those left standing. It is our view that we are entering the initial boom period for nanotechnology. We would go further and say nanotechnology is currently at the point that the Internet pre-boom was at circa 1992-93. Our goal is to take the hype out of this subject and find the companies that will be left standing in the nanoworld. There may be some from those companies we have presented above, and/or they may come from the companies yet to become public.
The subject of nanotechnology is vast, the potential is immense, and its study is a wonderful endeavor to embark upon. We cannot possibly do justice to it in one or two articles, but now is the time to do the homework and become informed investors.
Join the give and take on the Nanotechnology discussion board. Only on Fool.com. And if you're the type of investor who likes searching for the next "big thing" in a world of small caps, try a free trial to Tom Gardner's Motley Fool Hidden Gems.
Wherrett and Yelovich are better known as Caesium and Jat4 on The Motley Fool discussion boards. They welcome your input via email. Wherrett owns shares of Nanophase, but Yelovich doesn't own any of the companies mentioned. The Motley Fool has a disclosure policy.