The Future of Energy May Literally Be in your Child's Hand
John is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Being in the research business for north of a decade, it’s always exciting for me to focus on emerging technologies and next-generation materials that could advance energy solutions and also open new doors for a variety of applications. This has me keyed up to discuss graphene, especially for the promise it holds in the future of energy conversion and storage.
First things first. What the heck is graphene anyway? Well, imagine taking a lead pencil and drawing a line. Then place a piece of scotch tape over the line and peel it back. The tiny fragments of graphite now present on the tape are called graphene. If you fold the tape and pull it back again, you can split the graphene even further and make the layers of the material even thinner each time you repeat the process.
Scientifically, graphene is a single layer of graphite made from tightly bonded sheets of carbon measuring just one atom in thickness. Due to its hexagonal or honeycomb lattice-like shape, graphene actually resembles chickenwire. However, this is no material to cluck at. Why?
Graphene can be roughly 100-200 times stronger than steel, it is amazingly thin (nearly totally transparent) and it can be stretched. Furthermore, graphene is turning heads, including my own, due to its ability to conduct heat (better than all known materials) and electricity just as well as copper. This is the reason the groundbreaking scientific graphene research of Andre Geim and Konstantin Novoselov won the 2010 Nobel Prize in Physics. Yet despite its exceptional potential, graphene is not yet known in mainstream investment circles. This could be good for those looking for growth opportunities within quantum physics.
Graphene, which is not currently produced in the U.S., is being tested in areas such as solar cells, nuclear reactors, LCD touch screens, desalination of water, foldable phones/tablets, supercapacitors, lithium-ion/vanadium-redox batteries, engine designs (airline as well as electric/hybrid cars) and as a catalyst for fuel cells.
Better than silicon?
Some reports suggest that graphene may even replace silicon in the future. My only issue with that belief is that graphene may not work as well as silicene, single layers of silicon. However, the ease to make graphene (recall the scotch tape example mentioned above) simply can’t be overlooked. Therefore the ease to produce graphene may ultimately be too strong an argument for silicene to compete with it regardless of how much spending the semiconductor industry has pumped into fabrication facilities built to manufacture various electronics over the last few decades.
That means if the enthusiasm for graphene spills into actual commercialization of the material beyond the walls of laboratories, saying graphene could challenge the use of silicon wouldn’t be so far fetched in my view. That would also potentially doom the outlook for indium producers as well since graphene could be a more flexible, low-cost alternative.
So how do we invest in graphene? Well, for starters, it’s made from graphite and 80% of world’s graphite is located in China. Therefore finding graphite outside of China will be a huge windfall to stakeholders, especially since the material may soon be considered rare earth. If that were to happen, I’d bet China would look to keep most graphite in its own backyard and that could vault prices of the material higher.
Investors may be best served looking at graphite mines, graphene production companies and graphene technologies. Large-cap names that are moving forward with graphene technologies include IBM (NYSE: IBM), Sony, Samsung, BASF and Intel (NASDAQ: INTC). Considering IBM created the first graphene-based integrated circuit on a single chip (less than 1 square millimeter in size) just one year ago, the company seems to have a competitive first-mover advantage over its larger rivals that could lead it closer to challenging the use of silicon in computer chips despite public comments by the company I believe are only made to throw rivals off IBM’s pursuit of a holy grail-like material.
I am also high on Intel since under CEO Paul Otellini, who will be stepping down in May 2013, the company has embraced indium, a next-generation material that graphene could substantially outperform. Therefore considering Intel’s open-minded view of indium, graphene stands to interest them even more (I wouldn’t even be surprised to see Intel become more involved in solar panel applications due to advancements in graphene and actually more seriously consider increased use of the material in chips previously dominated by silicon due to better fabrication economics).
As for lesser known names to keep on the radar, investors may want to take a look at manufacturing plays such as CVD Equipment (NASDAQ: CVV), Aixtron (NASDAQ: AIXG), GrafTech International (NYSE: GTI) and China Carbon Graphite Group (NASDAQ: CHGI), the best way to play China’s push to advance modern technologies. I am a fan longer term of Universal Display (NASDAQ: OLED) due to my excitement in bendable electronic screens that I feel are the next progression for tablets and future e-readers.
One wild card play in the graphene space due to size (micro-cap) is Northern Graphite (NASDAQ OTCBB: NGPHF). Shares of Northern Graphite have been on an absolute tear in the past week possibly due to more excitement for graphene coupled with delayed enthusiasm regarding the company moving to the Tier 1 of the TSX Venture Exchange.
bluephoenixinc has no positions in the stocks mentioned above. The Motley Fool owns shares of GrafTech International Ltd., Intel, and Universal Display and is short Sony (ADR) and has the following options: long JAN 2013 $22.00 calls on Sony (ADR). Motley Fool newsletter services recommend Intel and Universal Display . Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!