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Corporate clients will dominate surge in nanotech tool demand, study projects

Corporate research and development will dominate a surge in demand for nanotech tools in the coming years, according to a study released this week by a New York consulting firm that focuses on nanotechnology.

The study, by Lux Research, also projected that sales of nanotech tools could double to $1.1 billion in five years.

"Interest in nanotechnology focuses on remarkable applications ranging from computer displays to cancer treatments. But behind the scenes of nearly all such applications lie sophisticated tools that researchers use to inspect, fabricate and model matter at the nanoscale," a summary of the Lux "Truth About Nanotech Tools" study notes. "Sales of such tools will grow from $580 million in 2004 to $1.1 billion in 2010," the summary continues.

But the growth will come in new areas, the report suggests, noting that "the current market for nanotechnology tools is dominated by inspection tools, which account for 95 percent of 2004 revenue and saw dramatic growth during the early 2000s nanotech explosion, when many university nanotech centers were constructed."

The report excludes established nanotechnologies, such as semiconductors and data storage. That exclusion "significantly shortchanges the market potential for nanotech tools," said Max Lagally, the E.W. Mueller profession in the Department of Materials Science and Engineering at the University of Wisconsin-Madison.
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The growth by the Lux Research study will largely come from corporate clients "because the university and national lab market is saturated," according to Lux Research analyst Vahe Mamikunian, co-author of the report. "In fabrication and modeling, growth prospects look much stronger - applications or nanoimprint lithography, a prominent fabrication tool, will gain traction through 2010," Mamikunian said, "And modeling will see higher adoption as vendors offer improved commercial tools."

The report projects:

• Inspection tools such as scanning probe microscopes and electron microscopes will experience tepid sing-digit growth as the academic market stalls and the smaller corporate base requires time to take off.

• Fabrication tools, dominated by nanoimprint lithography, will grow at double-digit rates as applications gain traction and as these tools move beyond R&D labs onto manufacturing floors.

• Modeling tools will experience strong growth over the next five years as software makers concentrate on improving accuracy and enhancing ease of use. However, entrenched user skepticism will keep penetration far lower than in the other two categories, making modeling the smallest of the three by 2010.

The tools will not be widely adopted by nanomaterials manufacturers for quality control, as some industry observers have predicted, the report says. "The nanomaterials manufacturers we spoke to tell us that faster and cheaper alternatives are available for routine quality control," said Michael Holman, a Lux Research analyst and co-author of the report. Those manufacturers also said "they only need inspection tools like scanning probe microscopes and electron microscopes for process development and spot checks," Holman said. "When these companies begin shipping products, they don't see the need to buy new tools beyond what they already have for R&D."

UW's Lagally sees greater potential for nanotech tools. "As these established technologies reach more and more into the nano domain, they will require inspection and metrology tools that are capable of providing detailed information, at the nanometer range, of fabrication processes and their reliability," he said. " We expect growth to come to a significant extent in these areas, as conventional tools are no longer able to provide the needed information. Nanofabrication tools actually probably have a longer timeline to significant sales because of industry resistance to change, and sales will be restricted to early adopters at universities for some time to come. These tools still represent such a small component of the market that even double-digit growth will represent small numbers for several years to come."

Lagally, who reviewed the research summary, said "the report likely underestimates the growth of inspection tools, because it is likely based on present technology in these instruments. nPoint, for example, feels that the capabilities of many of the most common inspection systems can be expanded to achieve greater precision and speed at the nanolevel with its positioning systems, and that this greater precision and speed will drive sales of next-generation inspection tools even in academic institutions."

The Lux report also predicts merger and acquisition activity in all three tool categories "as larger vendors look for new ways to co-opt potential competitors."

David Niles is senior contributing editor for WTN. He can be reached at dniles@wistechnology.com.

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