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Topics Covered
Background
2007 Market Report on Conductive Silver Inks
The Price of Silver
Market Forecast on the Price of Silver
The Silver Conductive Ink Market in a Recessionary Period
Factors Impacting the Conductive Silver Ink Market
The Silver Conductive Ink Market in an Inflationary Period
Forecast on The Silver Conductive Ink Market
Future Market for Silver Ink Manufacturers
New Applications for Conductive Silver Inks
Summary
Background
NanoMarkets is a leading provider of market and technology research and industry analysis services for the thin film, organic and printable electronics businesses (which we refer to as TOP Electronics.) Since the firm’s founding, NanoMarkets has published over two dozen comprehensive research reports on emerging technology markets. Topics covered have included sensors, displays, OLEDs, HB-LEDs, e-paper, RFID, photovoltaics, smart packaging, novel battery technologies, printed electronics, organic electronics, emerging memory and storage technologies and other promising technologies. Our client roster is a who’s who of companies in specialty chemicals, materials, electronics applications and manufacturing. NanoMarkets also hosts a blog at www.nanotopblog.com where we discuss technology trends, company announcements and the industry’s on-going progress.
2007 Market Report on Conductive Silver Inks
In May 2007, NanoMarkets published a well-received report on silver inks and pastes that analyzed and quantified the markets for these materials. We released a new version in April of 2008. However, there have been significant changes in the economics of the silver inks business in the past 8 months and this has led NanoMarkets to publish a new report on the topic providing our analysis of the opportunities and challenges that exist in this business at the present time.
The Price of Silver
The most obvious change, of course, is in the price of silver itself which has been on a roller coaster ride for much of the period that NanoMarkets has been publishing reports. In May 2007, when we published our first report on silver inks, the price of silver was $13.5 per ounce and had risen to over $20 per ounce by July 2008. At the time of this writing, the spot price of silver has fallen to about half of the July 2008 high. And to show how big the fluctuations of this metal can be, the reader should note that in the early 2000s the price of silver was around $4 per ounce, while in 1980 it actually reached $50 per ounce.
Market Forecast on the Price of Silver
If our economic assumptions are correct, we may see such price spreads over the forecast period considered by this report. In our forecast, we assume that prices for silver - and hence silver inks - continue to fall for the next couple of years and then begin to rise again.
The Silver Conductive Ink Market in a Recessionary Period
The rapid rise in the price of silver of the recent past had the obvious impacts on the silver paste/ink business. First, there has been a search for new materials that are reasonable alternatives to pure silver inks in the markets in which it competes. These alternatives will almost certainly have to be a metal of some kind and copper is the obvious choice, since it almost as conductive as silver. The problem with copper is that (unlike silver) its oxide is not conductive and in powder form copper is a somewhat dangerous material that tends to self combust. (The copper powders would be used to make inks.) One way round this conundrum is to produce silver-coated copper inks. This idea had been around for a while, but at the height of the recent silver boom it (or something like it) seemed like a product design necessity. At current silver prices the quest for alternative and hybrid conductive inks seems far less urgent, and the interest and opportunities in such inks are likely to decline even further if - as we believe will be the case - commodities decline show significant price declines over the next couple of years.
Factors Impacting the Conductive Silver Ink Market
However, price is only one factor that impacts the market for conductive inks and given the relatively small contribution that silver inks usually make to the products in which they are used, it may not even the main one. Rather, in recessionary in times, makers of conductive inks are likely to find that some of the markets where they expected to make major inroads have been constrained by a poor economic climate. As our updates forecasts show we expect much of the future demand for silver inks to come from the RFID, photovoltaics (PV) and lighting. But in hard economic times, none of these sectors look that attractive. Retailers and others are likely to balk at deploying a sophisticated (i.e., costly) IT system such as RFID that may take years to prove in. A moribund construction industry is likely to have negative fallout for the PV industry. And at a time when commodity costs are low, PV may look less attractive as an alternative energy source than it does now and perhaps something similar can be said the expected savings from solid-state lighting.
The Conductive Silver Ink Market in an Inflationary Period
If our analysis is correct then within a couple of years silver and other commodity prices are likely to start increasing again. Initially, inflationary periods are usually seen as attractive by businesses because they have more control over prices, credit is easier to get and customers appear to have more money in their pockets. Once, inflation begins to take off new concerns begin to appear. In particular, high interest rates begin to choke off consumer and new construction spending; two areas critical to the future of conductive inks. However, this report makes no claim to forecast with fine accuracy the degree to which inflation will take off the world economy. Two final economic comments though: (1) an inflationary environment favors short-term projects, because the discount rate is high and (2) in an up and down economy such as we believe will occur in the next eight-years, investment (including internal investment by companies) is likely to be more risk adverse than we have seen in the past couple of decades. This is not especially good news for high-technology industries.
As we begin to hit an inflationary period in perhaps two years time, alternatives to silver inks may seem important once again; they have captured the imagination of ink makers during the recent period of high silver prices. (We note that the likelihood that silver prices will fall rapidly seems not to be considered by recent advocates of silver alternatives. Manufacturers of alternative inks may have more genuine reasons for believing this a more sustainable opportunity during the coming inflationary period than in the recent past.)
Forecast on The Silver Conductive Ink Market
Again, the economic environment in an inflationary period may have a significant impact on the conductive ink market through its shaping of certain application markets as well as directly through price. And once again, RFID may be at the center of things. After the recessionary period in which RFID implementation and development may be seen to be too expensive and risky to implement, we may hit a period of low levels of inflation where the economy may seem buoyant enough to invest in RFID. However, if inflation levels go too high, RFID backers will have to make a very good case for why their product is going to provide short-term benefits. Some will be able to do this, some won't. And because RFID tags are likely to be exquisitely price sensitive for the high volume applications that everyone is chasing after, the RFID market is also likely to be hit directly by the price of inks.
Future Market for Silver Ink Manufacturers
During an inflationary period the most attractive of the larger markets being pursued by silver ink makers is probably photovoltaics. This is an established market with price sensitivity that is quite low when compared with RFID, automotive components, or discrete electronics, for example. During an inflationary period in which the prices of energy are rising, the PV market will also clearly be in rapid growth mode. There are two caveats, however. One is that the PV market is strongly impacted by the construction industry's performance. (PV mostly makes economic sense in new construction.) The other is the emergence of thin-film PV which will increasingly compete with conventional crystalline silicon PV. For the most part, this newer kind of PV uses transparent conducting oxides rather than silver in contacts.
New Applications for Conductive Silver Inks
Short of economic catastrophe, ink makers will continue to search out new opportunities and markets into which to sell conductive inks throughout the whole period covered by this report. There are already other solid markets which are currently attracting attention from silver inks and pastes. One of these is the high end of the RFID market; where tags are used for animal tracking or inventory management of very expensive items. These are obviously much less price-sensitive areas than item level tagging of supermarket items, but also much lower value markets. This comment can also be made—and even more emphatically—about another area where printed silver is finding a market, in medical patches and medical imaging electrodes.
Summary
However, this search for new applications is not one that should ever be interpreted as desperation on the part of the ink and past makers. In fact, the past year has seen an interesting development with regard to the kinds of inks that were being produced. A year ago, the development focus was mostly on inks for ink-jet printing, today there has been a shift to flexo and gravure inks. This reflects the general belief in the printed electronics business that we are now moving to a real commercial production environment and away from an R&D market. This is a good thing, of course, from the perspective of the silver ink makers. On the other hand, it raises some interesting questions. What is the future of nanosilver inks, given that they were so tied to the future of ink-jet? And given that many silver inks are currently customized to user needs, how essential will it be for more generic user-friendly inks to emerge for silver inks to achieve real mass-market potential?
Source: "Printed Silver: New Concerns and New Opportunities", Market Report by Nanomarkets
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