smart coatings markets, an emerging opportunity

n-tech Research Note

Smart Coatings Markets: An Emerging

Opportunity

Issue date: June 2015

n-tech Research PO Box 3840 Glen Allen, VA 23058

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About n-tech Research

n-tech Research is the industry’s leading source of market analysis and forecasting for

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All n-tech reports include detailed revenue and volume forecasts based on tried

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n-tech reports can be purchased individually or as a subscription.

Current Reports:

Electrochromic Glass and Film Markets 2014-2021

Smart Coatings Markets 2015-2022

Smart Surfaces Markets 2015-2022

Smart Mirrors Technologies and Markets 2015-2022

Markets for Self-Healing Materials 2015-2022

Smart Window Materials and Films Markets 2015-2022

Upcoming:

Shape Memory Materials Markets

Color Shifting Materials Markets

Multi-Functional Materials and Coatings Markets

Self-Assembling Materials Markets

Self-Cleaning Materials Markets

Antimicrobial Materials and Coatings Markets

Anticorrosive Materials and Coatings Markets

Smart Windows Markets

Sensor Embedded Coatings and Materials Markets

Metamaterials

www.ntechresearch.com/market_reports


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Research Team

Lawrence Gasman is the Principal Analyst at n-tech Research and one of its co-

founders. Mr. Gasman has 35 years' experience of analyzing the commercialization

potential of complex technologies and currently manages all of n-tech’s industry

research. For more than a decade Mr. Gasman has focused his interests on identifying

the business opportunities in advanced materials and manufacturing and contributes

much of the analysis for n-tech’s core research work on smart materials and surfaces. He

is also an acknowledged expert on forecasting for high-technology markets in a broad

range of industries.

Mr. Gasman's consulting clients have included multinationals, start-ups and investors and

he has advised them on new product introduction, market positioning and strategy, and

sales potential. He has also provided due diligence on mergers and acquisitions for his

financial clients and serves on the technology advisory board of a major specialty

chemicals firm. He was educated at Manchester University, with advanced degrees from

the London School of Economics and London Business School.

Tarun Vemulkar is a technology analyst at n-tech Research. Tarun has a background in

materials-related research, process development, and engineering, with hands-on


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experience researching nanomaterials, and the industrial manufacture of DRAM and

NAND memory at a leading company in the semiconductor industry.

Vemulkar’s academic background is as a materials scientist. He holds a Bachelor's and a

Master's in Science and Engineering from the University of Pennsylvania. He has

published research on novel semiconductor nanomaterials and their application in real

world devices. At n-tech he has issued reports on new electrode materials for lithium ion

batteries and oxide thin-film transistors and is currently working on his next report on

shape memory materials.

James Montgomery is a market analyst for n-tech research having extensive experience

in covering clean tech and electronics and related materials markets during his time with

the firm. Since 2003 he has covered various business and technology markets, delivering

a wide range of content to broad B2B/B2C audiences in renewable energy, industrial

lasers, and semiconductor manufacturing. He has produced content from daily news to

C-level executive interviews, magazine features, blogs, and video coverage.

Prior to coming to n-tech he was associate editor at RenewableEnergyWorld.com,

reporting on trends in solar and wind technologies, policies, and finance. Prior to that

he focused on the market for industrial lasers used in manufacturing for Industrial Laser

Solutions, and for nearly 10 years he covered semiconductor manufacturing trends and

technologies for Solid State Technology.


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Table of Contents

1 Technology Evolving: The Business Impact of the New Smart Coatings ............. 6

1.1 It’s Not the Smartness ......................................................................... 7

1.2 The Next Big Thing? ............................................................................ 7

1.3 Self-Healing, Self-Assembling and Self-Cleaning Coatings: The

Nanotechnologists’ Dream Fulfilled .............................................................. 8

1.4 Smart Coatings for Smart Glass and Color-Shifting ................................. 10

1.5 Other Coatings and Future Coatings ..................................................... 10

2 The Next Markets for Smart Coatings ......................................................... 11

2.1 The Future of Smart Coatings is in Electronics ........................................ 11

2.2 What’s Left for Smart Coatings in the Energy and Construction Sector ....... 12

2.3 Military and Healthcare: Standing Outside the Fray ................................ 14

2.4 Smart Coatings in the Automotive and Transportation Sector ................... 15

3 Effective Competition in the Smart Coatings Space ...................................... 16

3.1 Smart Coatings Compete With Sensors and Smart Surfaces ..................... 16

3.2 The Supply Chain versus the Innovation Chain ....................................... 16

3.3 Barriers to Growth in the Smart Coatings Market .................................... 18

4 Summary of Eight-Year Smart Coatings Market Forecasts ............................. 18

List of Exhibits

Exhibit 1: Levels of Intelligence in Smart Coatings ............................................. 6

Exhibit 2: Eight-Year Revenue Forecast for Smart Coatings ($ Millions) ............... 19

Exhibit 3: Total Smart Coatings Market, 2015-2022 ......................................... 19


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1 Technology Evolving: The Business Impact of the New Smart Coatings

Over the years, smart coatings have been tacitly defined as the most functional of

functional coatings. Of course, functionality of coatings and other materials has changed.

A coating that might have been thought of as smart in the past is not considered as such

now. Over time, one generation of “smart coatings” becomes merely “functional,” and a

new generation of coatings takes over in the “smart coatings” category.

n-tech Research believes that this is what is happening right now. What we are seeing is

that smart coatings are about to take a great leap forward in “intelligence” that will lead to

new smart coating products and product classes. In turn, this represents new

opportunities for materials firms (including substrate firms), coatings machine makers and

even OEMs. In Exhibit 1, we show how we think smart coatings will evolve over time with

regard to intelligence.

Exhibit 1: Levels of Intelligence in Smart Coatings

Intelligence Level Functionality Examples

Standard (dumb) functional

coatings

One simple function with no

response to outside stimuli

Indium tin oxide (ITO)

Anti-scratch coatings

Non-autonomic smart coatings

Responds to outside stimuli, but

needs some human intervention

to trigger “smartness”

Self-cleaning ovens

Reversible polymers

Autonomic smart coatings Completely automatic smart

response to outside stimulus

Capillary-based self-cleaning

materials

Shape memory materials

Multifunctional smart coatings

Offers multiple smart features –

typically the result of multiple

coating layers

Not many real world examples as

yet. However, self-dimming

glass, which is also self-cleaning

and has PV capabilities is where

we are headed.

Many relevant R&D programs now appear to be reaching a point where they are just a

year or two away from leading to viable commercial products with a level of intelligence

that has not seen before.


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1.1 It’s Not the Smartness

From a market perspective, of course it is not intelligence/smartness that sells. Rather,

the point is that smartness of coatings is now reaching a point where they are going to be

much more useful than ever before and much longer lived, which opens up new

addressable markets.

These addressable markets are already served by functional coatings of various kinds.

These coatings are products that are adequate in many ways but have always fallen short

in important ways. Anti-scratch coatings, for example, can do a good job in warding off

scratches. But when scratches do occur, they are there for good. Anti-scratch coatings

cannot heal them, but self-healing coatings can. Both automotive and building windows

have been tinted for decades. But they stay tinted when the sun goes in, while self-tinting

windows adjust to sunlight.

Based on this, n-tech sees smart coatings in similar terms to another kind of coating that

we have previously covered in depth; transparent conductors. In this market, ITO has

served for many years, but has begun to see growing penetration by nano-engineered

alternatives with better mechanical and cost properties.

The replacement trend is slow. But it has been more than enough to lead to the creation

of significant new business opportunities, not to mention a slew of new start-ups and

projects at larger materials/specialty chem firms.

1.2 The Next Big Thing?

All of this suggests to n-tech that smart coatings (and smart materials more generally) will

be a substantial business opportunity going forward and we think that we expect to see

large firms make substantial investments in this area; some have already. These firms

will include not just coatings firms, but also the large glass firms, and other firms higher

up the supply chain.

Already smart coatings is a vibrant enough topic to have spawned dozens of R&D projects

all over the world, not to mention as several conferences. In the near future we think that

smart coatings will

Create protectable intellectual property (IP)

Avoid commoditization of coatings products

Lead to a stream of new products over a sustained period of time.

These trends will have important consequences. The trend towards a better IP

environment will, n-tech Research believes, attract new attention for the smart coatings


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business from venture and angel capitalists. This is important in a sector of the coatings

business that has often seemed characterized by small struggling companies with

mediocre supply chains.

The other two factors listed above suggest that players in the smart coatings space can

expect healthy margins that should be sustainable over a lengthy period and reasons why

large specialty chemicals firms should be taking a serious look at the smart coatings

space right now.

The development of smart coatings has been held back by the inability to create very high

performance coatings with a low-temperature process. However, printing technology has

a unique ability to provide complex texturing of surfaces, which fits well with the smart

coatings goal. In another development related to the manufacture of smart coatings,

several firms have been working on the LbL approach to develop cost-effective, uniform-

quality coatings.

1.3 Self-Healing, Self-Assembling and Self-Cleaning Coatings: The Nanotechnologists’ Dream Fulfilled

Self-healing, self-assembling and self-cleaning coatings are especially important in this

context and they fit particularly well into the trends mentioned above. In particular, the

obvious usefulness of these products in so many applications areas mean that they will

generate major revenues if they can prove out technologically.

Although coatings in each of these three categories have been available for some time,

they are, we think, about to reach lifetimes and performance levels that they have not

attained before. The latest generation of self-healing, self-assembling and self-cleaning

coatings will all address large markets and have an attractive technology pipeline with a

low chance of commoditization.

Self-healing, self-assembling and self-cleaning are precisely the functionalities that the

early R&D in nanotechnology was supposed to lead to, but never quite did.

Self-healing coatings: The big technological leap forward that n-tech expects in the area

of self-healing coatings is an improvement in terms of the type and size of damage that

they can self-heal.

While we are not buying the hype on smart coatings someday being able to repair major

damage to an aircraft fuselage, there is plenty of room for improvement in today’s “self-

healing” coatings, which are often little more than anti-scratch coatings. However,

competition in this space will not be just on what size of hole a coating can repair, but also

on (1) how long the repair takes—some self-healing coatings today can take many hours

and (2) the longevity of the coatings.


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Self-assembling coatings: Self-assembling coatings can already demonstrate some

impressive advantages and n-tech Research believes these will only increase as new

generations of self-assembling coatings come onto the market.

In particular, we think that advanced self-assembling coatings can provide reduction in

the cost and ease of manufacturing processes. For example, self-stratifying coatings can

already provide a way to eliminate the need for multiple coats. But it seems likely that as

self-assembling coatings—and self-assembling materials more generally—evolve they will

become an important part of advanced manufacturing techniques.

Self-cleaning coatings: Self-cleaning ovens are ubiquitous, but other self-cleaning

coatings and self-cleaning surface opportunities have yet to be exploited because of the

absence of suitable coatings, especially coatings with an adequate lifetime. For example,

self-cleaning windows have been available on the market since 2001, but they tend not

to last long, which is the reason they have never made it out of the single-family residential

sector

An incentive for developing such coatings is obviously that they provide low maintenance,

reduced cleaning time, and reduced cost. To best exploit these opportunities, new

hydrophilic, hydrophobic, oleophobic, amphiphobic and multifunctional coatings are being

developed. Some of the technological trends that n-tech sees as having reasonable

potential in the area of self-cleaning coatings are (1) nano-technological approaches to

textured hydrophobic surfaces and (2) “super-hydrophobic coatings.”

Hydrophilic surfaces are not as widely used as hydrophobic surfaces for self-cleaning

coatings. These coatings typically use a photo-catalysis process with TiO2 as the main

material. But there remain many challenges that need to be overcome by nanocrystalline

TiO2, especially its robustness and optical transparency in glazing industries. A number

of other approaches are under investigation, such as doping. There have also been

various attempts to add materials to TiO2. And hydrophilic coatings are effective but have

their limitations; inorganic dirt is not removed.

Although not exactly self-cleaning, coatings that provide anti-fouling and antimicrobial

functionality are closely related. In the anti-fouling sector, we are seeing opportunities for

moving away from the traditional copper-based materials, and metallic materials more

generally.

Biocide-free anti-fouling coating solutions are also being investigated, as are layered

polymer anti-fouling coatings. “Smart” antimicrobials have tended to mean just that there

is a time-release mechanism built in. However, we are seeing a shift towards the use of

self-assembly and hydrophilic technology for smart antimicrobial coatings.


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1.4 Smart Coatings for Smart Glass and Color-Shifting

Self-dimming glass is often celebrated as one of the successes of smart coatings.

Electrochromic (EC) automotive mirrors are already a billion dollar business. Self-

dimming windows are a solid, albeit niche business. And while there are several ways to

make smart windows aside from electrochromic coatings, we do not consider them

significant alternatives to EC at the present time:

Photochromic materials currently are not seen as much of a challenge to

electrochromic windows. However, hybrid photochromic/electrochromic windows

such as those produced by SWITCH Materials have commercial potential.

Meanwhile, the business opportunities for SPD smart windows are limited by the

fact that SPD technology is controlled by Research Frontiers.

Most people also do not see thermochromic windows as much of a threat to the

dominant electrochromic technology because this type of smart glass remains

somewhat tinted at all times. Something similar can be said about PDLC

technology.

Color-shifting coatings: Somewhat related to self-dimming coatings are color-shifting

coatings; both change the shade of the substrate onto which they are coated and they

use related technologies, but have different applications. Color-shifting coatings are used

on vehicles, buildings, and packaging to help consumers avoid counterfeit drugs and

other fake merchandise.

The color changing paint that appears to have the biggest mindshare at the present time

is Valspar’s Kameleon paint. Here, the color effect is due to the use of mica particles in

the paint. But other color-shifting technologies include thermochromic and photochromic

paints.

Many of these color-shifting paints are high cost and the final effect can be somewhat

uncertain. So there is room for improvement here. However, unlike the other smart

coatings opportunities we have reviewed in this Executive Summary, the addressable

market for color-shifting coatings seems somewhat constrained.

1.5 Other Coatings and Future Coatings

Color-shifting coatings are by no means the only smart coatings that are not “megatrends”

in the way that (say) self-healing coatings are. There are other segments of the smart

coatings market that represent apparently smaller opportunities either because the

addressable markets are limited or because the technology development work that still

remains to be done is at a relatively early stage.


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Smart coatings for corrosion/wear resistance: There is a significant opportunity in this

area to develop new kinds of coatings that avoid the chromium VI that has commonly

been used in these coatings. Approaches that are based on pH changes seem to be

especially popular and here the changes may be detected either using fluorescent

molecules, quantum dots or by some other method.

Pressure sensitive smart coatings: Pressure-responsive paints (PSP) are used for

carrying out aerodynamic testing in wind tunnels, where the PSPs serve to measure the

airflow. This application is common to both the automotive and aerospace industry.

Scientists at Pennsylvania State University have, however, developed a luminescent

pressure-sensitive coating that is claimed to be better than PSPs. So this suggests that

there may be opportunities for pressure-sensitive smart coatings beyond the more

conventional PSPs.

Future smart coatings: n-tech Research believes that the immediate opportunities for

smart coatings lay mostly in market-expanding improvements of existing materials.

However, there are also a few instances of entirely novel materials platforms being used

for new kinds of smart coatings but largely longer-term opportunities. One example of

what we are talking about would be the use of metamaterials in smart optical coatings.

Another is the small research program designed to create new kinds of self-healing

products.

Particularly exciting are multilayer coatings, which n-tech Research sees as an important

commercialization direction since it is the simplest way to develop coatings that are

multifunctional.

As an example of truly smart coatings, one might imagine in the future, a smart coating

that provides photovoltaic energy generation with inherent self-repair and self-cleaning

capabilities. Whatever the functionality of multilayer coatings, cost will be a factor holding

back the development and use of these sophisticated smart coatings.

2 The Next Markets for Smart Coatings

2.1 The Future of Smart Coatings is in Electronics

n-tech Research is a strong believer in the commercial potential for smart electronics

coatings which ties into the emergence of IoT and continued growth in mobile and

wearable electronics.

Smart coatings and the IoT: The idea behind the IoT is that—using embedded sensors and

processors—buildings, appliances, machines and objects will become more responsive to


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human needs in both personal and professional environments and provide increased

functionality and enhanced data collection capabilities:

While smart materials are not being prominently mentioned in current IoT literature,

n-tech sees a perfect fit.

Self-cleaning and self-repairing coatings that clean and repair themselves either

automatically or in response to external cues?

Sensors embedded into coatings and surfaces the collect data and react as

needed?

Or, a smart coating functions as sensor that serves as a more cost effective way

to create a wide-area sensing panel than a large array of sensing devices?

The possibilities in this regard are significant.

Prospects for self-cleaning coatings in the smartphone and tablet market: n-tech

Research believes that protective smart coatings for smartphones and other mobile

devices will be commercially significant. These will protect devices from yellowing, and

chemical effects, as well as the buildup of dirt, microbes and smudges.

The recent unsuccessful attempt by Apple to coat phones with sapphire at least

demonstrates how important this kind of coating might be eventually and the markets that

are opening up for protective coatings in this space.

Self-healing coatings are also a class of smart coatings that will generate revenues in the

electronics sector. Waterborne polyurethane dispersions have already been shown to

conveniently realign themselves to fill in scratches. We also expect that there is a niche

market here for smart antimicrobials.

In any case, the smartphone/tablet market is so huge—about two billion units shipped

annually—that it seems inevitable that smart coatings makers will be incentivized to design

coatings especially for this market segment.

2.2 What’s Left for Smart Coatings in the Energy and Construction Sector

Much of the market emphasis in the smart coatings space during the past decade has

been on the building products sector with green initiatives being an important driver.

Prospects for smart coatings in an era of green building decline: However in 2015, the

decline in oil prices has not only taken the steam out the energy efficiency story but

threatens to curb the resurgent green building sector where self-healing and self-cleaning

coatings seemed to have viable applications.


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At the same time much of the on-going availability of incentives provided for green building

remain uncertain and this may mean that providing a special focus on this sector such as

the use self-cleaning coatings for solar panels no longer makes much sense. And while

we can point to Japan, where solar is having something of a revival at the moment, the

overall sector seems less certain of a smart coatings bet.

All this raises the issue of how smart coatings firms will reposition their product ranges in

the near future to minimize the growing business risks associated with green building.

Self-dimming coatings for windows will have to be repositioned so that the story around

them is about aesthetics and mood lighting and perhaps less on energy savings as the

basis for the story. Also, n-tech Research is seeing a lot of activity in the self-healing

concrete sector, which is in no way dependent on energy prices.

We believe that active smart coatings will remain restricted to new construction activities,

because retrofitting applications will remain prohibitively expensive for the majority of

consumers.

Smart coatings and the new energy sector: n-tech Research believes that market

opportunities for smart coatings are going to be more limited in the oil and gas sector,

compared to how we saw things turning out in our previous smart coatings market

analyses.

In particular, we expect that the smart protective coatings that in the past have been sold

to gas and oil firms looking for new wells and deposits to see a decline as many shale oil

firms have radically cut back on their capital expenditures, for example.

Also seeing slower growth in the near future will be the self-cleaning coatings that started

to be used on solar panels in the last few years. Such coatings can be very effective in

the wind sector. For example research has shown that airborne sand and rain reduce the

energy output of wind turbines by up to 20 percent.

However, n-tech Research does not believe that the decline in the energy sector is forever

and once energy prices start trending upward in some sustainable way we expect the

market for energy-related smart coatings to revive.

In the meantime, R&D into new energy technologies continues and smart coatings may

find a role there—in the development of fuel cells, for example. In addition, smart coatings

are being developed for use as oil-filtering materials that can completely separate oil and

water in an economical manner. And given the regulatory support for eco-friendly oil spill

removal solutions, new products based on smart coatings are still likely to be

commercially popular.


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2.3 Military and Healthcare: Standing Outside the Fray

While much of the market activity in the smart coatings space may well be characterized

by a shift from “green” to electronics, n-tech Research believes that there are still plenty

of opportunities for smart coatings in military and healthcare sectors. Some of the most

attractive include the ones reviewed below.

Worldwide, the U.S. military is both the leading supporter of research on smart coatings

and the largest military end user of smart coating technology. The majority of research

projects in this space are undertaken directly by the U.S. military or jointly with other

research institutes, sometimes through funding and sometimes through collaboration.

Smart antimicrobial coatings is already established: Smart coatings for use as

antimicrobial agents are extending beyond medical uses to the food, textile, and

residential segments. As a result, n-tech Research sees the addressable market for smart

anti-microbial coatings, which is in some ways already established, as growing.

Need of innovative drug delivery agents: The majority of smart coatings that are meant to

trigger automatic drug release based on an external stimuli are still in the research phase

and there is uncertainty over the commercial release of such advanced drug delivery

systems in the immediate future. Since such coatings will have to pass through many

more tests than other types of smart coatings, there is also additional business risk in this

market segment.

That said, there are some interesting developments in this space and new coatings of this

type can plug into the demand from aging populations in the developed countries. Among

the developments we see in this area that appear to meet a real need are bio-adhesive

coatings that offer controlled drug release for the prevention of drug overdoses in critical

situations.

Anti-corrosion coatings demand in the military: The military seems likely to continue to

be an attractive market (and funding source) for smart coatings. As n-tech Research sees

it, the military is especially interested in anti-corrosion coatings.

What stands out in this regard are new smart coatings designed to protect galvanized

steel and aluminum surfaces. In this context, we anticipate that military markets will be

examining closely the ability of such smart coatings to extend the service life, reduce

operational costs, and improve the chemical resistance of metal structures relevant to

military applications. This will lead to the adoption of these materials for other related

military applications in the medium term.


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The active involvement of the U.S. Navy's Office of Naval Research (ONR) in the

development of anti-fouling solutions through the “Antifouling/Fouling Release Coatings

Program” leads n-tech Research to believe that more innovative commercial solutions,

including non-metallic and biocide-free coatings, will be commercialized in the near to

medium term of the forecasting period of this report.

Smart coatings for camouflage: The development of a smart coating with a self-signaling

feature that can effectively camouflage military personnel and equipment, such as tanks,

helicopters, and trucks has been proposed. Another possibility is the use of natural

materials such as reflectin—a protein used by squid to change color and reflect light—to

provide infrared invisibility.

2.4 Smart Coatings in the Automotive and Transportation Sector

Smart coatings provide numerous benefits for the automotive and transportation industry,

such as improved asset life, limited corrosion damage, and reduced maintenance and

overall cost of ownership. These benefits extend across all of the major verticals in this

sector, including land vehicles, aircraft, trains, and marine vessels.

Self-dimming and self-healing coatings likely to drive demand: Self-dimming windows and

self-cleaning windows are already used in the transportation sector. However, as

previously noted, these smart coatings will have to improve in terms of performance in

order to gain market share. In addition, again as noted, the marketing story around self-

dimming glass will have to rely less upon energy savings.

Eco-friendly anti-fouling coatings in demand in the marine industry: Apart from energy

conservation via self-dimming window coating solutions, anti-fouling coating solutions

have long been in demand from the global marine industry. In order to address the

growing concern over biofouling, anti-fouling coatings, new smart anti-fouling coatings are

being developed.

Corrosion-sensing and de-icing coatings to gain prominence in the airline industry:

Corrosion of aircraft parts and disintegration of the protective paint are some of the key

areas of concern for the airline industry.

Currently, research is being undertaken to develop optical fiber sensors with fluorescent

coatings that can indicate paint degradation and prevent microbiologically influenced

corrosion (MIC). Experimentation is also in progress with polymer coatings that have the

potential to prevent metal corrosion by forming a barrier to water and oxygen.


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De-icing is a second major issue for the industry, and leading airlines and research

institutes are jointly developing novel coatings that can lead to frost-free aircraft body

surfaces.

Self-stratifying coatings in the automotive sector: Labor and material costs involved in the

application of a second coating on automobiles has been an issue in the industry for some

time. As a result, self-stratifying coatings that are able to form multilayer films from a single

coating system are gaining prominence in the automobile industry.

Other ongoing smart coating developments: A number of additional smart coatings

developments are taking place in the transportation sector. A few prominent examples

include:

Coatings that improve the effectiveness of braking and suspension systems in the

transportation segment.

Smart coatings with embedded sensors for tires that signal the driver when the

tires begin to lose traction.

Smart lubricant coatings that can either enhance the performance and

effectiveness of automotive oils or eliminate the use of automotive oils entirely.

3 Effective Competition in the Smart Coatings Space

3.1 Smart Coatings Compete With Sensors and Smart Surfaces

Competition in the smart coatings space occurs at different levels. Smart coatings

themselves must compete with electronic or electrochemical sensors which can now be

miniaturized to a point where they can—under some circumstances—make cost effective

competitors to smart coatings.

And smart coatings have an even closer competitor in the form of smart surfaces, which

can achieve many of the same effects as smart coatings, but through nano-patterning

surfaces. Smart surfaces are only beginning to be commercialized and smart coatings

have a head start. But increasingly all the market sectors in which smart coatings play

will see penetration from smart surfaces, too.

3.2 The Supply Chain versus the Innovation Chain

There are several large specialty chemical companies that seem well positioned to supply

smart coatings into the market in that they already supply one or two “semi-smart”

coatings. 3M for example, offers scratch resistant and protection coatings for a wide

variety of applications, Dow Corning provides its 2634 coating based on alkoxysilane


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functional perfluoropolyether (PFPE) hybrid polymers that form a transparent and durable

thin film on the top of touch screens. And so on.

But we have yet to see any of the giant specialty chemical firms really focusing on smart

coatings. This would mean that either, (1) one of these firms would start to dominate a

significantly sized segment of the smart coatings business or (2) that such a firm would

establish a sizeable group that specializes in smart coatings.

Which large specialty chemical firms are likely to take this direction is hard to say. n-tech

Research has noted before that AkzoNobel is dedicated to exploring all possible new

business avenues in the coatings domain and is developing novel, copper-free anti-

fouling coatings and self-stratifying coatings, so this is perhaps one company to watch.

But this is just one company and we believe that there will be a few surprises with regard

to who does and who doesn’t enter the smart coatings markets.

It is possible—indeed likely—that some large firms will devote significant amounts of

resources to smart coatings, but will limit their activities to certain market segments that

fit with the central business objectives and product ranges. For example, some of the

large glass firms—such as Corning and Saint-Gobain—are already major factors in self-

dimming glass. And it would be no surprise to see DuPont build a smart coatings strategy

around one of its major flagship products, such as Teflon.

Given the overall lack of commitment to smart coatings as a class of materials, we see

investment in or acquisitions of innovative smaller firms that are specifically smart

coatings focused as an entry point for companies looking the pursue these markets.

This is a potentially significant opportunity for investors, innovators and inventors to

consider. While materials plays are not going to produce the massive returns on

investment that electronics, software and content firms will potentially offer, they do

provide reasonable return potential. University groups, small start-ups and the like can

attract reasonable finding from larger firms or boutique investment groups if the IP is right

and the applications targeted make sense.

This will make some sense to the smaller firms too in that many of them seem poorly

financed and with very weak supply chains— sometimes just a few regional wholesalers.

However, not all smart coatings firms are weak in this sense—consider Gentex’s success.

Perhaps there is a lesson there for smaller smart coatings-oriented firms—move up the

value chain as Gentex has done.

In past n-tech Research reports on smart coatings, smaller smart coatings firms that we

have mentioned have included AnCatt, Balcony Systems Solutions, Debiotech,


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NanoShell, and New Energy Technologies. However, this is just a smattering of the firms

to which the comments above apply.

3.3 Barriers to Growth in the Smart Coatings Market

Despite the strong potential of smart coatings in various industrial applications, there are

certain gray areas that need to be effectively addressed in order to expand the scope of

the global smart coatings market beyond traditional consumer segments. Some of the key

areas of concern that require a rational solution from the smart coatings community

include:

The premium pricing structure

Technological gaps

Unfavorable environmental regulations

Disinclination of end users towards particular products.

Regulations: Environmental regulations may impact the growth prospects of some smart

coating solutions that rely on materials of concern. For example, smart coatings

incorporating copper and chromium VI have faced a level of uncertainty in various

applications, such as commercial marine vessels operating in inland waterways.

Hence, coating manufacturers must thoroughly assess the environmental impact of any

materials used in final smart coating formulations before choosing the ideal candidates

for their smart coating solutions.

End-user behavior: Ultimately, it will be the interest of the end user that spurs demand for

each particular type of smart coating. Coating manufacturers must convince their target

consumers of the potential benefits of their products.

For instance, oil-slick removal coating manufacturers have found it difficult to convince

the large energy firms to try their unique coating solutions. Therefore, it is advisable for

smart coating producers to proactively gauge the market demand for new smart coating

products and determine their true market potential.

4 Summary of Eight-Year Smart Coatings Market Forecasts We summarize our expectations for smart coatings in Exhibit 2 and Exhibit 3. Exhibit 2 is

a quantitative forecast and Exhibit 3 is a roadmap.


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Exhibit 2: Eight-Year Revenue Forecast for Smart Coatings ($ Millions)

2015 2016 2017 2018 2019 2020 2021 2022

Total 607 953 1,521 2,442 4,139 5,792 7,924 10,659

© n-tech Research 2015

Total Smart Coatings Market, 2015-2022

0

2,000

4,000

6,000

8,000

10,000

12,000

2015 2016 2017 2018 2019 2020 2021 2022

$ M

illio

ns

© n-tech Research 2015

Exhibit 3: Total Smart Coatings Market,

2015-2022


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Exhibit 3: Roadmap for Smart Coatings

Period Technology Evolution/Focus Commercialization

2015-2018

Active R&D work on

autonomic smart coatings

and new materials

Self-dimming glass, non-

autonomic self-healing and

self-cleaning coatings

commercialized

2019-2022

R&D emphasis on multi-

functional coatings

Smart coatings R&D taking

on a growing nano-

technological focus

Autonomic smart coatings

replace non-autonomic self-

coatings

Beyond 2022

R&D focus is on new ways to

make coatings act as

sensors

Multi-functional coatings

broadly commercialized

Age of smart surfaces

© 2015 n-tech Research

To obtain the full version of the report, Smart Coatings Markets 2015-2022 please contact us at

[email protected]

http://ntechresearch.com/market_reports/smart-coatings-markets-2015-2022

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