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Trojan Horse Partnering Strategy for Emerging Electronics Applications

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In the value chain for established electronics markets, material suppliers and manufacturing companies engage directly with the brand owners/end users, and technology developers must engage with the material suppliers and manufacturing companies to move downstream, relying on the credibility of these industry established companies. In the emerging printed, flexible, and organic electronics partnering landscape, companies throughout the value chain have struggled to innovate around undefined applications causing lofty industry expectations that failed to live up the hype. Without many success stories to point to, the best practices for forming relationships remain a mystery for most.

A survey of 73 executives active in different portions of the supply chain shows how different segments approach partnering and enables insight into how to approach their partnering strategy in the challenging arena. Based on the data from this survey, and detailed interviews with many stakeholders, a new strategy – the “Trojan Horse partnership” – is a more effective approach to this undefined space. Material suppliers and manufacturers use the technology developers to access brand owners and tap into downstream partnership networks. The appeal of the technology developer’s novel approach provides an avenue to penetrate the walls of the electronics brand owners and grow from within these relationships, while the materials and manufacturing companies offer resources and credibility to tech developers.

The shift to Trojan Horse partnering requires new approaches and tactics. Those looking to engage with early-stage technology developers should scout for technology, but as technology developers mature, technology scouting will give way to “partnership scouting” – scouting by assessing partnership networks. In addition, material suppliers can further the networks of its existing technology developer partners, through the use of its own technology scouting groups and existing relationships from other application spaces.

As this type of partnering becomes common practice, material suppliers and manufacturers will need to market themselves as attractive partner candidates to the technology developers. Companies that have the structure to move quickly and supply even small amounts of capital will have an advantage as it will lower the engagement risk for the technology developers. Material suppliers and manufacturers will also need the discipline to abandon the “sell something now” mentality that creates unrealistic expectations and timelines, and is notorious for euthanizing genuine long term growth opportunities.

Source: Lux Research report “Trojan Horse Partnering: Bringing Materials to Market for Emerging Electronics” — client registration required.

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Solid-state Batteries Will Offer the Highest Technical Value for Consumer Electronics Within 15 Years

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Lithium-ion (Li-ion) batteries have established themselves as a leader in energy and power densities for mobile applications. These batteries account for a market worth more than $10 billion, and have a complex value chain with many stakeholders. However, the reign of Li-ion will soon be threatened by next-generation batteries. While much of the motivation for next-generation batteries – whether in the public’s imagination or governments’ largesse – comes from transportation, our analysis shows that the automotive market will be the last to adopt next-generation batteries due to the extreme cost sensitivity of automakers, stringent safety and lifetime requirements, and long, cautious adoption cycles.

The makers of next-generation batteries will have to look to other markets first. While military applications are always a happy hunting ground for emerging technology, it is the designers of consumer devices, still the largest Li-ion application today, that will move the next generation battery market more meaningfully as they continue to push towards devices with smaller footprints. Operating systems like Microsoft Windows or Apple OS X are increasingly being deployed in handheld smart phones and tablets and system complexities will only grow with time and in smaller, thinner devices. Batteries are a major roadblock today on the way to this goal: The thin, small, lightweight batteries of today simply do not pack the energy required by truly novel consumer electronics.

Analyzing the consumer electronics space, solid-state batteries will provide real completion to Li-ion in the consumer electronics market, offering tremendous technical value for a segment that prizes volumetric efficiency and low costs. The incumbent, Li-ion, will put up a worthy fight but by 2020, solid-state will draw close as current complex manufacturing processes that are a challenge today are solved, costs fall and energy densities rise. From this foundation, it will surge past Li-ion in technical value by 2030. Li-S will also make strong progress, but won’t quite match the well-rounded value propositions of solid-state and advancing Li-ion, finding only niche consumer electronics applications that prize excellent specific energy above all else. Li-air is a non-factor in this sector, hampered by its volumetric inefficiency and its need for peripherals.

For innovative companies with materials science, chemistry or battery systems expertise, the landscape of next-generation energy storage technologies presents a bevy of opportunities, whether consumer electronics, military or the shiny transportation prize so much R&D investment is chasing. Just like we have seen in Li-ion, some startups will falter through overexpansion, others through misjudged applications. The road to technologies like Li-air, Li-S, and solid-state batteries is long, but the time to start paying attention and tracking the development of specific companies, technologies and applications is now.

Source: Lux Research report “Beyond Lithium-Ion: A Roadmap for Next-Generation Batteries” — client registration required.

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Pressure coring tools a step in the right direction for gas hydrate

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Japanese researchers, using technology built at Georgia Tech, in collaboration with the U.S. Geological Survey (USGS) and Japanese Oil, Gas, and Metals National Corporation, recently deployed advanced pressure coring characterization tools (PCCTs) to retrieve gas hydrate samples deep beneath the Pacific Ocean. Gas Hydrates, which form under high fluid pressure and low temperature, are found at extreme depths in large bodies of water. Scientists have long touted the benefits of gas hydrates, but production challenges prevent the resource from becoming commercially feasible.

The breakthrough in PCCTs, however, appears to be a step in the right direction. Previous attempts at extracting gas hydrate core samples, which would allow for proper analysis of hydrate bearing sediments, have been unsuccessful due to the uncontrolled immediate depressurization of the samples that occurs. The coring tools built by Georgia Tech mimic natural pressure and temperature (P-T) conditions through the use of various chambers and also allows for controlled depressurization. A pressure transducer and thermocouple monitor the P-T conditions alongside thermocouples drilled into the hydrate core sample that measure certain properties of the hydrate sample without depressurization. Researchers hope the tool will allow them to better assess hydrate occurrences and determine production potential.

Despite the promise of Georgia Tech’s PCCT breakthrough, we continue to be skeptical of gas hydrate’s potential. An influx of shale gas production in the U.S., along with potential shale plays in Europe, U.K., and Asia, continue to push commercial gas hydrate development far into the future. Japan appears keen to exploit gas hydrate reserves in the Pacific Ocean, but commercial development is at least 15 years away in the best-case scenario. With the rapid development of LNG terminals in the U.S. and FLNG terminals sprouting off the coast of Australia, gas hydrates will be competing with an established LNG market, which will bring down gas prices in Asia, by the time they are commercially feasible. By then, even the most desperate of Asian consumers will be questioning the feasibility of hydrate production.

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Azbil’s JV with CECEP-ID Introduces a Potential Powerhouse for Building Energy Management Systems in the Chinese Market

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In March, Azbil Corporation signed a cooperation agreement with CECEP Industry Development Company (CECEP-ID), a subsidiary of China Energy Conservation and Environmental Protection Group (CECEP), to establish a joint venture in May. Azbil Corporation is a leading Japanese provider of building automation systems (BASs). CECEP is the only state-owned enterprise in China that focuses on energy savings and environmental protection. The JV – called CECEP Building Energy Management Company (CECEP-BEM) – will leverage CECEP’s marketing network to open new channels for Azbil’s BEMS in the Chinese market.

CECEP has total assets in excess of RMB 63.2 billion ($10.03 billion), making it the largest energy savings firm in China. Azbil already owns around 70% share of Japan’s BEMS market, and brings to the table significant experience in developing and implementing automation systems, along with key technologies for monitoring and controlling indoor environments.

China will retrofit 99% of its 400 billion ft² of existing building stock for energy efficiency in the coming decades. Plus, it is building an additional 20 billion ft² of building space annually. At present, the BEMS market in China is underdeveloped, fragmented, and has no major players with significant market share. Companies with cost-effective and efficiency-enabling technologies, resources to scale growth, and a strong Chinese network are expected to take the lion’s share of future BEMS market growth.

Based on this recipe for success, we think CECEP-BEM has a very bright future. Poised to enter a rapidly growing market, it will likely become one of the major BEMS suppliers in China over the next three years.

The cooperation between CECEP-ID and Azbil highlights two key takeaways for those watching the BEMS and related markets. First, building partnerships with domestic players in China is a straightforward and effective way to get access to the region’s market. Second, it signals the willingness of Chinese companies to collaborate with foreign developers with strong product offerings rather than wide global channels to market. Since Chinese companies tend to focus exclusively on domestic markets – where new construction fuels the majority of BEMS uptake – the technology value of potential partners trumps wide market access in almost every case. With those takeaways in mind, companies interested in tapping into the Chinese BEMS market’s growing potential should monitor the JV’s progress and seek to establish similar partnerships with strong Chinese technology developers, such as Beijing Tellhow (Client registration required) and Shenzhen Das.

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Which New Sustainable Architectural Coatings Technologies Are Likely to Stick?

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Sustainable architectural coatings technologies offer a lower impact on energy, natural resources, and/or the environment. Yet they often get confused with “greenwashed” unsustainable alternatives. This week’s graphic comes from Lux Research’s latest Sustainable Building Materials report (Client registration required) that, among other things, provides a modified Lux Innovation Grid to assess which emerging coating technologies are best positioned to combine sustainability and end-user value into a winning market reception. We survey some of the candidate technologies here.

First-generation low-VOC technologies – like waterborne acrylics and polyurethanes - have gone mainstream. But challenges remaining around gloss retention, durability, and processability have driven development of new technologies, such as waterborne alkyd coatings from Reichhold Coatings and waterborne epoxies from Cytec Industries. More established low-VOC technologies, such as 100% solid content powder coatings, have also received a shot in the arm with the development of polyurea coatings, whose tunable rheological properties make them more processable.

Cool roofs could become a future winner, thanks to thermally responsive optical coatings. Elastomeric cool-roof coatings are commercially available and produced at scale, landing them a spot among current winners even though their application remains limited to hot climates. However, their thermally responsive cousins, such as those from Creative Material Technologies and Thermeleon, turn from “white” to “black,” potentially expanding the geographic footprint of cool roofs.

Several new technologies enabling solar cell coatings to effectively be sprayed on buildings offer attractive processability and yield. But the 2% conversion efficiency of these solar paints is very low relative to conventional solar panels (13% to 15%), suggesting such coatings will remain a curiosity.

Coatings that enhance durability such, as those based on Bayhydrol polyols and isccynates from Bayer, provide a tangible benefit to the end user while the increased product life translates into reduced resource consumption. Self-healing coatings offer similar promise. But only a handful of start-ups, including Autonomic Materials, are pursuing the technology.

“Reduce, reuse, and recycle” technologies help minimize a coating’s environmental impact and its overall cost to end users, earning such technologies a spot in the Win-Win Quadrant. Examples include coatings with enhanced hiding power such as EVOQUE and ROPAQUE from Dow Chemical and Celcor from Arkema. Both reduce material consumption by as much as 20%.

Source: Lux Research report “Painting a Green Future: Opportunities in Sustainable Architectural Coatings.”

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