Dear PGM Capital Blog readers,
In this weekend’s blog edition, we want to elaborate on the increasing usage of graphene in modern high technology equipment and the best way to invest in it.
WHAT IS GRAPHENE?
On October 5, 2010, The Royal Swedish Academy of Sciences decided to award the Nobel Prize in Physics for 2010 to Andre Geim and Konstantin Novoselov, both researchers at the University of Manchester, UK, for their groundbreaking experiments regarding the two-dimensional material “graphene”.
Graphene is pure carbon in the form of a very thin, nearly transparent sheet, one atom thick.
Graphene Molecular Structure
Some important characteristics of Graphene:
- It is remarkably strong VERY strong, considering its very low weight it is 200 times stronger than steel as stiff as diamond, and also flexible and even stretchable.
- It conducts heat and electricity with great efficiency (faster at room temperature than any other known material)
- It charges and discharges 100x to 1000x faster than traditional batteries.
Researchers started to study Graphene in 2004, and since then they have found dozens of potential applications and exciting properties of this wonder material. Graphene is set to revolutionize a lot of industries, including sensors, batteries, conductors, displays, electronics, energy generation, medicine and more.
See below video for more details:
THE GRAPHENE TECHNOLOGICAL REVOLUTION:
The commercialization of graphene is just in its infancy, but already dozens of new companies have been established to develop graphene based material, graphene production processes and other related activities.
Graphene’s unique properties are valuable in many different industries and applications such as:
- Energy Storage:
Graphene may hold the key to an energy storage revolution. Researchers have developed highly porous graphene-based super capacitors that they, “can fully charge in just 16 seconds and have repeated this some 10,000 times without a significant reduction in capacitance.” Imagine charging your smartphone or tablet in just 30 seconds, or your electric car in a few minutes. - Flexible Screens:
Graphene is transparent (it transmits up to 97.7% of light), and it also has low electrical resistance and is flexible. Therefore, it’s a good candidate for flexible electronics and screens.
- Desalinization/Filtration:
Graphene behaves strangely around water. Water can pass through it, but almost nothing else can. Graphene is also much stronger and less brittle than aluminum-oxide (currently used in sub-100nm filtration applications). This makes it a good candidate for water filtration systems, desalination systems, and efficient and economically more viable biofuel creation. - Medical Applications/Sensors:
Offering a large surface area, high electrical conductivity, thinness and strength, graphene would make a good candidate for the development of fast and efficient bio-electric sensory devices, with the ability to monitor such things as glucose levels, hemoglobin levels, cholesterol and even DNA sequencing. - Photovoltaics/Solar cells:
Graphene offering very low levels of light absorption (at around 2.7% of white light) whilst also offering high electron mobility means that graphene can be used as an alternative to silicon in the manufacture of photovoltaic cells. - Material Composites:
Graphene is strong, stiff and very light. It could eventually replace steel and carbon composites in everything from aircraft to cars to body armor for the military. It is actually already being used in tennis rackets today. - Computing/Electronics:
Graphene’s unique structure and “extremely mobile electrons could allow graphene transistors to process data at very high rates, with some devices already clocking in at more than 400 gigahertz — many times faster than comparable silicon devices.” Alternatively, graphene photodetectors could also “allow computer chips to communicate with light rather than comparatively sluggish, energy-wasting electrons — an advance that would cut power consumption and allow computers to handle data more efficiently.
INVESTING IN GRAPHENE:
Investing in a pure-play graphene company is not easy, as almost all of these companies are currently privately held.
Making graphene, gram for gram, is one of the most expensive materials on Earth: one micrometer-sized flake made, can cost more than US$1,000.00
However, as mass production increases, there is potential for a 70% to 80% price drop, making graphene production much more economical. Chemical vapor deposition (CVD), for example, has brought the cost down to about US$100,000 per square meter.
Estimates suggest that the graphene market will be $149.1 million by 2020.
The European Union has created a flagship program for graphene, allocating about U$1.3 billion to spend on the development of graphene over the next 10 years.
WHO IS USING GRAPHENE:
Every tech company with an eye on the future and other industries ranging from medical to defense as well are currently in the race for being the first one being able to produce cost efficient equipments, gadgets or instrumentation, in which graphene is being used. In tech the biggest players are Samsung, which owns 38 graphene patents (and this figure is expanding), and Apple and Google. You thought the smartphone patent wars were annoying? Just wait until the graphene patent wars begin.
Professor Hong Byung Hee at Seoul National University, created a technique–and owns the patent for–mass-producing graphene-based displays, the primary area of interest for tech companies. The fact that Hee has figured out how to turn graphene into displays and owns the patent on it makes him the most popular guy in the world as far as the tech giants are concerned.
The reason you don’t have a graphene smartphone right now is because the material still has some challenges to be worked out. Namely it’s difficult to manufacture on a large scale. So right now they can make a lot of small batches of perfect graphene displays or large batches of, well, crappy ones.
But Samsung has recently said it has had a breakthrough in producing graphene in larger batches and other researchers are working on different approaches around the world.
PGM CAPITAL COMMENTS:
Graphene, although it might be the next wonder material, faces hurdles. It is still far too expensive for mass markets, it doesn’t lend itself to be used in some computer-chip circuitry and scientists are still trying to find better ways to turn it into usable forms.
One factor holding graphene back is cost. Some vendors are selling a layer of graphene on copper foil for about US$60 a square inch.
Its price has to drop to around one dollar per square inch for high-end electronic applications such as fast transistors, and for less than 10 cents per square inch for touch-screen displays.
Graphene is undeniably exciting, and has the potential to transform a number to clean-tech industries. The timeline for that transformation, however, is likely to be slower than investors bidding up graphene-related stocks today.
For those of you who want to invest in graphene, we advise you to carefully research and select a basket of the best graphene producers and an even more careful selection of companies that are making early efforts at application of the material.
Based on the above, we believe that best way to play graphene right now, is by investing in conglomerates that will profit most, when they integrate graphene in their current products or launch new products using graphene.
Disclosure:
We currently have No position in any graphene producing company or stocks of any company mentioned in this article.
Until next week.
Yours sincerely,
Eric Panneflek