Frost & Sullivan Research Service   Published: 16 May 2005
U.S. Nanotechnology Industry - Investment Analysis and Growth Opportunities
  SERVICE HOMEPAGE
RESEARCH OVERVIEW BENEFITS OF THIS SERVICE MARKET SECTORS
TECHNOLOGIES LIST OF FIGURES ANALYST PRESENTATION
TABLE OF CONTENTS ORDERING INFORMATION FURTHER INFORMATION
   Research Overview
 

This Frost & Sullivan research service presents a broad outline of the current U.S. nanotechnology industry, highlighting major market and financial trends with an emphasis on five growth segments: chemicals & materials, healthcare & biotech, electronics & computers, tools & equipment, and defense & security. It also provides a comprehensive financial and valuation analysis of the leading U.S. nanotechnology companies.

Nascent Nanotechnology Industry Sees Increased Product Development

Nanotechnology has the potential to make substantial improvements in the general quality of life and is, therefore, drawing the attention of entrepreneurs and investors around the globe. Recent product launches, such as transparent sun blocks, stain-free fabrics, golf balls designed to fly straight, and nick-proof trims on hummers, clearly demonstrate the enormous potential of the technology to provide superior medical treatments, better production processes, faster computers, and smaller memory devices.

With many more nanotech-based products presently in their developmental stage and expected to be launched within the next few years, the nanotechnology industry is currently in the late introduction or early growth phase and, hence, faces numerous challenges.

Fundraising Remains a Key Challenge to Sustaining Product Development

Most nanotechnology companies are presently in the conceptual or development stages. While the development of technologies is an important factor for an industry in its growth phase, the lack of real products in the market is likely to be a deterrent for raising the funds required for the commercialization of products. Companies dedicated to nanotechnology are unable to sustain research and development activities solely based on their revenues, and funding is vital to further their research activities.

An added challenge for nanotechnology companies is the lack of sufficient consumer knowledge concerning the benefits offered by nanotechnology, as well as the complex nature of such products. "Initially, nanotechnology products are expected to be more expensive than traditional products," notes the analyst of this research. "Convincing the customer that the added value is worth the additional cost will be key determinant of the growth of this technology."

Quest for Better Technologies Drives the Growth of Nanotechnology

The constant search for better products and processes is spreading the application of nanotechnology across various industries. In the healthcare & biotech sector, research is driven by the need to improve medical equipment, to find better drug delivery systems, and by the search for medical cures. Overall, the promise of a better quality of life and the potential for lucrative returns are ensuring heavy investments and innovation in this relatively new technology.

The nanotechnology industry can be compared to the stage of the information technology (IT) industry in the early to mid 1990s. While the sector holds high potential for future growth, its present stage is characterized by numerous small market participants, lack of clarity about the final product, absence of clearly defined structure, low profit margins, and high research and operational expenses.

"Although the chemicals & materials market was the first to adopt nanotechnology, the focus now seems to have shifted to the healthcare & biotech sector," says the analyst. "Much of the miniaturization of computer chips to date has involved nanoscience, and it is expected that products for industry applications and defense & security applications are likely to be the first to enter the marketplace."

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  • Assisting companies to reach their full potential in the core business
  • Providing growth strategies to help companies expand into related businesses
  • Preemptively redefining the core business during market turbulence
  • Applying the Frost & Sullivan framework to identify and address common mistakes resulting from misaligned corporate strategies
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To maximize the potential for growth within a firm’s internal and external environment, Frost & Sullivan consultants can facilitate the creation of strategic programs that deliver improved market success. Frost & Sullivan’s strengths lie in combining strategic understanding with market expertise and applying these with absolute commitment to its clients’ growth.

   Benefits of this Service
 

Comprehensive Coverage of the U.S. Nanotechnology Market

The research service provides an in-depth coverage of the market trends in the U.S. nanotechnology industry. It traces the currently buoyant markets, and provides a long-term outlook for each market.

Market Segmentation

This study segments the nanotechnology industry into different growth segments. The segments are ranked by number of market participants and research efforts.

Financial Benchmarking Analysis

Financial benchmarking analysis (FBA) includes an analysis of the major performance indicators such as ratio analysis, cash burn rates, and others. The goal of the FBA service is to provide financial analysts, investment professionals, and industry participants with the tools and information needed to support financial analysis and investment decisions of all sorts.

Valuation Multiples

Valuation multiples based on sales and profitability provide a good measure for overall performance of the industry stocks.

Funding Opportunities

The research service discusses various sources of funds available for nanotechnology companies. The study also looks at companies that are poised for likely initial public offerings (IPO’s) in 2005/06.

   Market Sectors
 

Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:

By application:

  • Chemicals and Materials
  • Healthcare and Biotechnology
  • Electronics and Computers
  • Tools and Equipment
  • Defense and Security

By geographic region:

  • The United States
   Technologies
 

The following technology is covered in this research:

  • Nanotechnology: Most materials exhibit unique properties when examined at scales below 100 nanometers (nm) (roughly 4 to 400 atoms). Nanotechnology involves manipulating the properties of such materials to take advantage of the unique properties that emerge at the molecular level.
   Analyst Presentation
 

F175-F1.pdf

  Table Of Contents

1. Executive Summary
        1. Overview of the Study
                1. Introduction
                2. Financial Benchmarking Analysis

2. Introduction and Methodology
        1. Introduction and Methodology
                1. Introduction
                2. Research Methodology

3. Industry Highlights and Segmentation
        1. Industry Highlights
                1. Introduction
                2. Challenges
                a. Complexity of the Nature of the Market, Likely to Lead to Hesitant Buyers
                b. Inhibitive Costs Affect Early Consumer Adoption
                c. Limited Funding may Affect the Commercialization of Technologies
                d. Novelty of the Industry Might Lead to Cautious Response
                3. Drivers
                a. Demand for Better Technology
                b. Demand for Superior Medical Treatment
                c. Demand for Enhanced Manufacturing and Production Processes
                d. Demand for Advanced Security and Defense
                e. Demand for Better Quality of Life
                4. Restraints
                a. Nanotechnology's Complexity Makes it Difficult to Understand the Benefits
                b. Most Companies are Still to Break-even
                c. Not Many Products in the Market
                d. Inhibitive Costs, Hesitant Buyers
        2. Industry Segmentation
                1. Introduction
                2. Industry Segmentation

4. Financial Benchmarking Analysis
        1. Consolidated Industry Analysis
                1. Nanotechnology Universe
                2. Consolidated Industry Data
        2. Industry Profitability
                1. Revenues and Earnings
                2. Research and Development
                3. Selling General and Administrative Expenses
                4. Employees
                5. Cash Burn Rate
                6. Time to Break-even
        3. Select Company Profiles
                1. Altair Nanotechnologies
                2. FEI Company
                3. Universal Display Corp
                4. Veeco Instruments

5. Valuation & Funding Opportunities
        1. Nanotechnology Index
                1. Frost and Sullivan Nanotechnology Index
        2. Historical Valuation
                1. Stock Performance
                2. Valuation Multiples
        3. Sources of Funds
                1. Introduction
                2. Government Grants and Aids
                3. Venture Capital Investments
                4. Corporate Funding
        4. IPOs
                1. Introduction
                2. Likely IPOs

6. Frost & Sullivan Awards
        1. 2005 Frost & Sullivan Nanotechnology Buy-Side M&A Advisor of the Year Award
                1. 2005 Frost & Sullivan Nanotechnology Buy-Side M&A Advisor of the Year Award
        2. 2005 Frost & Sullivan Nanotechnology IPO Underwriter of the Year Award Award Recipient
                1. 2005 Frost & Sullivan Nanotechnology IPO Underwriter of the Year Award



   List of Figures
 
  • Nanotechnology Industry: Performance of Frost & Sullivan Nanotechnology Index (U.S.), 2000-2005
  • Nanotechnology Industry: Market Drivers Ranked in Order of Impact (U.S.), 2005-2011
  • Nanotechnology Industry: Market Restraints Ranked in Order of Impact (U.S.), 2005-2011
  • Nanotechnology Industry: Market Challenges Ranked in Order of Impact (U.S.), 2005-2011
  • Nanotechnology Industry: Ranking of Different Markets by Number of Market Participants, (U.S.), 2004
  • Nanotechnology Industry: Ranking of Different Markets by Research Efforts, (U.S.), 2004
  • Chemicals and Materials Nanotechnology Market: Snapshot of the Market, 2004
  • Healthcare and Biotech Nanotechnology Market: Snapshot of the Market, 2004
  • Electronics and Computers Nanotechnology Market: Snapshot of the Market, 2004
  • Tools and Equipment Nanotechnology Market: Snapshot of the Industry, 2004
  • Defense and Security Nanotechnology Market: Snapshot of the Industry, 2004
  • Nanotechnology Industry: Segmentation by Type of Market (World), 2015
  • Nanotechnology Industry: Business Life Cycle (U.S.), 1995-2020
  • Nanotechnology Industry: Timeline for Expected Launch of Products by End User (U.S.), 2005-2015
  • Nanotechnology Industry: Timeline for Expected Launch of Products by Market (U.S.), 2005-2015
  • Nanotechnology Industry: Companies in Frost & Sullivan Nanotechnology Universe (U.S.), 2004
  • Nanotechnology Industry: Advantages and Disadvantages of Different Business Models Adopted (U.S.), 2004
  • Nanotechnology Industry: Consolidated Income Statements (U.S.), 1998-2004
  • Nanotechnology Industry: Common Size Consolidated Income Statements (U.S.), 1998-200
  • Nanotechnology Industry: Composition of Revenues (U.S.), 200
  • Nanotechnology Industry: Revenues (U.S.), 1998-200
  • Nanotechnology Industry: Operating Profits (U.S.), 200
  • Nanotechnology Industry: Net Profits (U.S.), 1998-2004
  • Nanotechnology Industry: Research and Development Expenses (U.S.), 1998-200
  • Nanotechnology Industry: Research and Development Expenses as a Percent of Revenues (U.S.), 1998-2004
  • Nanotechnology Industry: Selling, General and Administrative Expenses (U.S.), 1998-2004
  • Nanotechnology Industry: Selling, General and Administrative Expenses as a Percent of Sales (U.S.), 1998-2004
  • Nanotechnology Industry: Employees (U.S.), 1998-2004
  • Nanotechnology Industry: Sales per Employee (U.S.), 1998-2004
  • Nanotechnology Industry: Cash Burn Rate (U.S.), 1998-2004
  • Nanotechnology Industry: Time to Profitability (U.S.), 1998-2004
  • Nanotechnology Industry: Composition of Revenues For Universal Display Corp (U.S.), 2000-20
  • Nanotechnology Industry: Companies In Frost & Sullivan Nanotechnology Universe (U.S.), 2004
  • Nanotechnology Industry: Government Funding (World), 1997-2005
  • Nanotechnology Industry: Venture Capital Funding (U.S.), 2001-2005
  • Nanotechnology Industry: Corporate Funding (World), 1997-2005
  • Nanotechnology Industry: Performance of Frost & Sullivan Nanotechnology Index (U.S.), 2000-2005
  • Nanotechnology Industry: Year-to-Date Stock Performance of Companies (U.S.), January to March, 2005
  • Nanotechnology Industry: Government Funding (U.S.), 1997-2005
  • Nanotechnology Industry: Allocation of Government Funding (U.S.), 2005
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