Published Date: December 15, 2015
Metamaterials are assemblies of multiple individual elements fashioned from conventional materials such as metals or plastics, but the materials are usually constructed into repeating patterns, often with microscopic structures. Unlike traditional composite materials metamaterials derive their properties not from the compositional properties of the base materials, but from their exactingly-designed structures.
Looked at from a business perspective, what this means is that metamaterials takes the value proposition of a composite to the next stage and appears to present the possibility of completely artificial materials that can be designed to very specific market needs; not quite “programmable matter, but (almost) the next best thing.
The current commercial reality of metamaterials, however, is something less than this. For one thing, while metamaterials may, in theory, be responsive to many kinds of waves, in practice practical metamaterials are mostly suitable for electromagnetic environments. In addition, the metamaterials sector is only just beginning to recover from an overdose of hype.
The End of Hype: Metamaterials on the Cusp
The hype surrounding metamaterials began in the late 1990s with a wealth of popular literature appearing that focused on the ability of metamaterials to create invisibility cloaks for military aircraft. This period also saw the publication of several important technical papers. However, by 2005, metamaterials seemed at best a technology beset by hard scientific questions and at worst a research project desperately seeking commercial applications.
However, n-tech’s current analysis of the opportunities in the metamaterials business is that we are at the cusp of a significant revenue generation beginning in 2016. We base these views on a number of factors.
Metamaterials Reaching a Critical Mass
Government funding for metamaterials in the defense industries has been available from DARPA, the Chinese government and perhaps others for almost a decade.
We believe that this money has helped pump prime the metamaterials business to a point where there are enough “big ideas” and people in this space for the metamaterials community to be able to claim a solid community of people who can support a real metamaterials industry sector going forward. In addition, there are some signs that some of the trickiest technical questions that emerged after the first metamaterials are being solved.
Mass Market Metamaterials
These are all developments on the supply side, but what we think is especially encouraging is the fact that – albeit in limited quantities – electromagnetic metamaterials are already making it into the consumer electronics marketplace. Specifically, they are being used in antennas for Wi-Fi routers and metamaterials are also finding their way slowly into cell phones as well. In these areas metamaterials can potentially eliminate noise to a more significant degree than other technologies
Sales of metamaterial antennas are already in the tens of millions for such consumer electronics products and here market penetration has only just begun, since the addressable market is measured in billions of units.
Also important is that the brand names active in this space – Netgear, NEC, and LG – are important ones.
While it possible that such firms may drop out of the metamaterials space at some point, if they do remain they are not likely to be satisfied with just a minimal penetration; these are not the kind of firms that would be happy with this. So what we may be looking here is a similar situation to when Apple adopted an obscure and expensive capacitive touch technology for its iPhones – this technology is now ubiquitous. Could some other important consumer brand do the same thing with electromagnetic metamaterial antennas.
Metamaterials as Venture Capital Bait
In any case, n-tech believes that metamaterials have now reached a point of maturity where they are attracting the attention of venture capitalists and as we show in the n-tech Research report on metamaterials, several notable VCs have already made an investment in the metamaterials space and there are already a handful of metamaterials start-ups that are already shipping products in limited quantities. VCs will obviously see something positive in the history of Kymeta, for example.
But at this stage in the game, however, the IP situation in the metamaterials space may be seen by the VC community as something of a mixed bag. The opportunity for start-ups to develop proprietary materials with protectable IP is constrained by the fact that there is a lot of metamaterials IP out there already.
This IP is owned by some of the biggest materials firms and electronics companies in the world and may be licensable. Among the firms with intellectual property libraries for metamaterials are Harris Corp., Kyocera Wireless, TE Connectivity, Alcatel-Lucent, Samsung Electronics, Murata Manufacturing, Hewlett Packard, Philips Electronics, NEC, Lockheed Martin, Raytheon, and Boeing. In addition, Nathan Myhrvold’s IP company, Intellectual Ventures appears to be quite active in metamaterials space.
Beyond Electromagnetics: The Future of Metamaterials
This may not be exactly what VCs want to hear, since they are looking for strong IP positions. But we also think that the IP situation will improve as both new kinds of metamaterials become commercialized and as new applications for metamaterials also begin to emerge.
Novel metamaterials: For now most of the commercial activity in the metamaterials space involves radio- and microwave-frequency electromagnetic metamaterials. But in a few years, the metamaterials community will move beyond electromagnetic metamaterials and on to other types of metamaterials. It is in these new materials areas where n-tech believes the next wave of metamaterials start-ups will appear.
With the latest metamaterials, the challenges can be significant, but once these are solved the applications will quickly become obvious. For example, we think that photonic metamaterials will quickly find a home in the solar energy sector (more efficient panels) and in LED lighting (more effective lighting).
Aerospace: We think that the first big money in the metamaterials space will be made in the consumer electronics space, simply reflecting the huge size of the addressable markets. However, another application that should be watched as a revenue generator for metamaterials is the aerospace sector.
This statement takes some explanation, since it appears that much of the funding for metamaterials over the past few years as been specifically aimed at defense and aerospace.
However, government funding for metamaterials is not the same thing as revenues. Indeed, our impression is that other analyst firms have tended to throw government funding for aerospace and defense applications into the metamaterials revenues pot giving an exaggerated sense of how big the metamaterials market is in these early days.
As far as we can tell the aerospace and defense markets are not yet producing large revenues in terms of actual commercial contracts. We think that these metamaterials markets will expand dramatically with most of these revenues coming from satellite and other broadband wireless antennas. Invisible planes and tanks are being worked on using metamaterials, but remain only slightly less futuristic than they were 10 years ago.
Medical markets: Finally, the other market that should be studied for future use of metamaterials is medical and healthcare. Here early revenue generation will come from medical imaging systems of various kinds.
The promise of metamaterials is more accurate imaging. Although most healthcare facilities are capital constrained, where significantly more accurate diagnostics can result from better imaging, there is often a way that can be found to pay for it. This, after all, may be a matter of life and death.