Advanced Ceramics Market Development
The transition from prototype to widespread industrial application can take years or even decades to complete.
For centuries, ceramic materials were used exclusively for tableware and building materials. In the mid-19th century, technical development in refractories and abrasives enabled the development of modern metallurgy and glass industries and became the first industrial application for ceramics. With the advent of porcelain insulators in the first part of the 20th century, the industry branched out into the new domain of technical ceramics.
Technical ceramics witnessed strong growth after World War II, primarily driven by the rapid growth of solid-state electronics and semiconductors. Power electronics depended on better dielectric materials, and consumer electronics required more compact and economical discrete components.
In parallel, ceramics appeared in new structural, heat- and wear-resistant applications, most often driven by advanced military applications (e.g., piezo acoustic sensors and armor materials). The term “advanced ceramics” was coined in the 1970s to designate a new world of engineering materials with special physical properties that allowed new technologies to mature.
Fundamental research is at the foundation of most new technologies. Such research often follows its own agenda, however, and can be disconnected from social or market needs. It may take decades for basic science to be translated into applied research. For example, over 60 years separated the discovery of the piezoelectric effect by the Curie brothers and the development of barium titanate piezoceramics by Murata in the 1940s. Therefore, it is often considered that new business development cycles actually start with the onset of applied research programs (see Figure 1).
Applied research comes into play when government research addressing socioeconomic needs meets private R&D that is motivated by profit expectations. Like many other new technologies, ceramics have historically relied on military funding for their initial development. The ceramic bearings that are found in many kinds of today’s industrial machinery and even in sporting goods were developed as early as 1972 with U.S. Navy funding to reduce the noise emitted by submarines. The first industrial applications appeared only 10 years later.
The effective coordination of public and private R&D policies also accelerated the development of new ceramic applications. Indeed, industry roadmaps provided by the Japanese Ministry of International Trade and Industry (MITI) in non-military domains clearly exemplify this efficient coordination.
The application development stage is devoted to validating and optimizing technologies for the targeted business application to the point where they become commercial products or services. Various obstacles can slow down the process. In many structural applications developed in the 1970s and 1980s, for example, a lack of design experience with brittle ceramics led to early failures. Sometimes, the whole environment had to be redesigned, adding cost and risks to simple material substitution.
Reluctance to change from validated designs has also been a major hurdle preventing market adoption. Resistance was weaker in applications like O2 sensors, in which ceramics were the only viable option. In other applications, validating lifetime durability or obtaining regulatory approvals can also significantly delay market introduction. For instance, in the case of bio-ceramics, clinical trial periods of at least 10 years are required before regulatory agencies grant their agreement, and product liability risks make users even more conservative.
Once a new concept is proven, expanding its market may again take many years. Pricing is usually a major handicap, as ceramics-based solutions often compete against engineering materials with a lower up-front cost. Convincing customers to accept a price premium in exchange for performance benefits is a lengthy process.
Driving manufacturing costs down to make ceramics competitive against other solutions is another common challenge because manufacturing costs depend strongly on production volume. Betting on scale economies for future market growth to justify large-capacity investment may be risky, but it can sometimes be the only way to open a market. Market pioneers that scale up capacity first, with the associated risks, obtain a competitive advantage. The business of zirconia kitchen knives was a good example of such forward pricing. Table 1 illustrates market development time, from technical proof of concept to commercial market takeoff, for a number of advanced ceramics applications. In these examples, the market development phase lasted between four and more than 70 years.
Solid oxide fuel cells (SOFCs) have attracted considerable interest because of their potential to produce clean energy from natural resources. In spite of abundant public funding, the SOFC industry has been one of the slowest new businesses to mature in the history of advanced ceramics. SOFC power sources are readily available for military or aerospace uses, but the related technology has faced many challenges in moving to civilian applications.
Since 2010, Bloom Energy has been making inroads into the distributed commercial power generator market segment. Other applications, despite 20 years of development, are just breaking into commercial markets: the truck auxiliary power unit (APU) market in North America and the residential micro-combined heat and power generation (m-CHP) market in Japan and Europe. Engineering challenges linked with cycling dissimilar materials assemblies over 700°C temperature amplitudes and the stability of ion-conducting properties in severe environments have held up market introduction for many years. Competing against well-entrenched traditional power generation technologies is also a huge economical challenge that will require forward pricing by manufacturers and continued government subsidies during the market scale-up phase.
On the other hand, zirconia for dental restoration was developed into a $700 million market during a period of less than 15 years without any government involvement. Several factors contributed to this record growth. First, regulatory constraints for dental materials are not as stringent as for other bioceramics, such as implantable components. Zirconia offered significant benefits in terms of aesthetics and durability for patients. Dentists and prosthetic laboratories have been using ceramics for restoration veneers for many years and embraced the new technology without resistance. In fact, “all-ceramic” restoration came along with digital dentistry, a new set of technologies that saves time compared to traditional veneer on precious metal castings technology. Last but not least, the dental industry is one of the rare markets in which ceramics replace more expensive precious metal alloys.
Innovation also takes place in the later stages of the business cycle. For mature applications, technical innovation can be applied in order to reduce manufacturing costs or to keep the technology current with new market constraints (e.g., more stringent standards). It can even be applied to a business in the declining phase as a means to extend product life.
Advanced ceramics were once defined around the traditional ceramic process route: powder processing, forming and sintering. During the last two decades, however, the drive for higher purity materials and more advanced properties has extended the focus of innovation toward new materials obtained by alternative processes that depart from the traditional route. Examples of such processes include chemical synthesis, sol-gel processing, single crystal growth, and new processes borrowed from semiconductor manufacturing.
This evolution has brought about a new, more open definition of advanced ceramics: non-metallic and non-organic materials with advanced properties enabling new technologies. Selected examples can help illustrate the impact of these new technologies on business development cycles.
Piezo mono-crystals are progressively gaining ground in special acoustic or actuating applications, in which the threefold piezo effect increase allows more compact devices. In 1980 and 1989, Nomura et al. and Shrout et al. synthesized PZN-PT and PMN-PT, two new single crystals exhibiting very high piezoelectric constants.1,2 The new materials became commercially available in 2004 (i.e., 15 years after the fundamental breakthrough). In 2013, the crystals are manufactured by only a handful of manufacturers, and high production costs restrict the use of these materials to high-value-added applications.
Indium-tin oxide (ITO) sputtering targets, used to deposit thin, transparent electrodes on LCD displays, appeared in the market in the early 1990s and subsequently grew into a multi-billion-dollar market. As early as 1956, Barett patented a method to deposit thin, transparent, conductive layers made of indium oxide.3 Thirty years later, in 1986, Hamberg et al. reported the excellent properties of ITO thin films.4 This technology became commercial in a record three years. The business, linked with the development of flat displays technology, literally exploded, so that, starting in 1992, ITO became the main industrial output for indium.
The third example, drawn from the microelectronics industry, centers on the development of Smart-Cut, which is today’s leading process to manufacture silicon-on-insulator (SOI) wafers. SOI stands for a thin layer of semiconductor single-crystal Si, laid out on a pure silica wafer. SOI, which reduces power consumption and enables a denser integration of functions, is used in microprocessors for mobiles. Initial research on SOI goes back to 1974.5 Bruel patented the Smart-Cut process in 1991.6 In 1992, the SOITEC company was established to develop the business. SOITEC opened its first industrial production complex in Bernin, France, in 1998.
In all three examples, 15-30 years separated fundamental research from the decisive applied research milestones. In addition, it took 3-15 years to transition from prototype to commercial product. This is not very different from “traditional” advanced ceramics technologies. These examples further show how time to market depends less on the nature of technology, and more on factors such as market pull vs. technology push.
In summary, the total time to market—from initial applied research to the financial break-even point—commonly takes over 20 years. For ceramic companies, this long process requires a sustained commitment to long-term innovation, with a “pipeline” filled with new products at various development stages and an effective review policy to periodically reassess market potential vs. remaining challenges. On the other hand, a lengthy return-on-investment period discourages competitors from entering new markets, which contributes to market stability.
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1. Jang, S.J., Uchino, K., Nomura, S., and Cross, L.E., “Electrostrictive Behavior of Lead Magnesium Niobate-Based Ceramic Dielectrics,” Ferroelectrics, 27, 31-34, 1980.
2. Swartz, S.L., and Shrout, T.R., “Fabrication of Perovskite Lead Magnesium Niobate,” Mater. Res. Bull., 17, 1245-50, 1982.
3. Barett, R.E., Olson, E.R., and Schall, P., Battelle Development Corp., U.S. Patent 2,932,350, 1956.
4. Hamberg, I., and Granqvist , G.C., J. Appl. Physics, 60 (11), R123, 1986.
5. Louis, D., Des hommes et des Ions, to be published in 2013.
6. Bruel, M., C.E.A., U.S. patent 5,374,564, 1992.