Living in a Material World – How Advanced Materials are Shaping the Future of Technology

Materials innovation touches everyone’s daily life. For example, the light bulb is commonly used as a symbol of innovation. Thomas Edison didn’t invent the incandescent light bulb, but he perfected it through materials innovation, trying hundreds of different materials for filaments before he found one that would be durable, bright, and relatively efficient. Edison also innovated the materials necessary for metal glass seals, a component used to maintain the vacuum inside the glass bulb while connecting the circuit. Through these innovations practical electric light changed the world. As a more recent example, today’s smartphones would not exist without advanced materials such as Gorilla Glass, transparent conductors, and light-emitting diodes (LEDs) which create a touch screen; the electrode materials that allow us to have safe high-energy lithium-ion batteries; and semiconductors that make up the processing and memory chips.

In this post we briefly discuss the history of advanced materials, how they’re developed today, what the investing landscape looks, and what the future may hold for this ever-evolving industry.

The Beginning

As Madonna famously sang in the 1980s, we are living in a material world. And the materials that we rely on are advancing at an exponential pace. The term “advanced materials” has been in circulation since around the 1950s, but in explaining what an advanced material is, we turn to this Bureau of Mines review from 1987, which stated that advanced materials “are those that possess novel or unique properties, or exhibit greater mechanical, thermal, electrical, optical, chemical properties,” relative to traditional materials. 

Today’s conventional materials were yesterday’s advanced materials.

Advanced materials provide numerous opportunities to make our lives better in many ways, such as:

• Making products more durable or energy efficient;
• Offering superior performance, new features, or more attractive design;
• Lowering the cost of goods and services we consume;
• Lessening our dependence on imports of strategic value and critical materials or minerals.

The biggest change in the definition of advanced materials comes in regard to sustainability, which was not nearly as central of an issue in 1987 as it is in 2021. Advanced materials are an essential factor in helping us build a more sustainable economy, whether through materials for solar panels to create renewable energy, materials to lightweight our cars and increase the range of electric vehicle batteries, or ways to make steel, plastics, cement, and other commodities while emitting fewer greenhouse gases and other pollutants.

The Development Process

Advanced materials are usually developed in one of two ways. Sometimes, researchers identify a new material, like graphene or shape memory alloys, then try to figure out how to apply it. In other cases, engineers have an application like a jet engine or a dental implant, and they leverage new materials to make their product or enhance its features and performance. These efforts take place at universities, government labs, corporations, and startups.

Wherever it’s being done, developing and commercializing an advanced material can take decades, sometimes with surprising results, and the process is rarely ever complete. Carbon fiber composites are a notable case study.

Scientists at Union Carbide invented carbon fiber composites in 1958. Aviation was an obvious market for these strong, lightweight but expensive materials, but it took over a decade of development before aerospace engineers could successfully design and manufacture composite parts. Military aircraft started using small composite components in the 1970s and made the leap to composite wings and fuselages in the 1980s, after years of developing the materials and manufacturing processes. Some of the early interest in carbon fiber composites came from less obvious applications: in the 1970s and 80s, sporting goods manufacturers for gear such as golf clubs and bicycles began to incorporate carbon fiber composites. Commercial aircraft didn’t begin to use carbon fibers until the mid-1980s, 25 years after they were invented, but they are now the biggest market for the material, and today—60 years later—they are beginning to be used in the automotive industry after racing and sports cars paved the way.

Plastics are another great example. Bakelite, the first synthetic plastic, first became popular in the 1920s, followed by polystyrene, polyvinyl chloride, and polyethylene in the 1930s, and now literally tens of thousands of different plastics are ubiquitous in everyday life. Today this development continues, with sustainability and biodegradability motivating new innovations and changes to the plastics we use daily.

Even wood—among the oldest materials known to our species—is still finding new uses in skyscrapers, wind turbines, and even satellites.

Historically, the majority of materials development has occurred in the U.S. and Europe, with Japan and Korea contributing as key players as well. More recently however, China has become a key contributor to the advanced materials value chain, becoming a major producer of everything from steel and aluminum to silicon for solar panels, electrode materials for batteries, and rare earth magnets. Materials continue to be an important focus for China: in November 2019, the government established a $21 billion national investment fund focused on transforming and upgrading manufacturing, and they’re producing technical research at an accelerated rate, publishing twice as many papers in material science as American researchers in the past few years, according to the journal Nature.

IQT’s Advanced Materials Matrix

IQT categorizes advanced materials based on the types of material (such metals, ceramics, semiconductors, polymers, etc.) and the functional properties of materials in domains like thermal, electromagnetic, optical, structural, and more. This forms a graphic structure, what we refer to as an architecture, into which any material can be placed, as seen below.

The Investment Landscape

While further researching this field, IQT surveyed a group of the top 30 investors who are active in advanced materials, including both financial venture firms and corporate VCs. Results showed that activity in the sector has been growing quickly, more than doubling from 2017 to 2018 in terms of invested dollars. The amount of funds invested declined from 2019 to 2020, but even so, over $700 million dollars went into companies focused on materials innovation last year. The number of deals increased by 34%, even as the dollar amount fell by 23%, as investors spread their bets across multiple companies.

We also found that materials VC investors tend to prefer companies that are developing specialty materials instead of commodities, because specialty materials tend to be high-value and high-margin, and companies usually do not need to invest a huge amount of capital to scale up production. These investors also tend to favor companies that are focused on applying a materials advancement, rather than the material itself. Most materials have several potential uses but startups need to focus much more narrowly to be successful. Investors have learned over the years that there is much more money to be made in innovative uses of materials, and they want their portfolio startups to have a path to market that does not depend on a third party commercializing an application.

Finally, timing is important to VC investors. As we saw with the example of carbon fiber, it can take many years to find the right market for a materials innovation and scale it up, but most VC funds have a limited amount of time to fund, build, and exit companies. VCs try to time their investment for the end of that long gestation period, when a company is ready to scale.

On Our Radar – The Future of Materials

We are paying special attention to three big areas in the ever-evolving field of advanced materials:

• Bio-fabrication: the use of engineered microbes to create new materials, driven in part by innovations in synthetic biology and often leveraging advanced bio-informatics and AI. These techniques can produce chemicals and materials that can’t easily be made with incumbent synthetic processes, and exhibit novel properties. Interesting examples are found in the fashion and food and beverage space, where companies are now asking, “how do we make leather, beef, or dairy proteins without cows?”
• Materials Informatics: the application of AI and machine learning to the problems of materials discovery and selection. Scientists and engineers can use this software to quickly determine which materials best meet their needs, or to predict the performance of new materials or formulations to identify the best candidates to test in their labs. For example, Panasonic recently partnered with the materials informatics platform Citrine to significantly accelerate the development of a new, higher performing organic semiconductor material for IoT applications.
• Metamaterials: materials composed of engineered structures organized in repeating patterns where properties are defined by their architecture and are not found in nature. There is a growing list of applications for these novel materials, ranging from flat lenses capable of subwavelength imaging, to 3D printed structural lattices, to flat-panel directional antennas that can be steered electronically for satellite communications.  

Even as society becomes increasingly digitized, advanced materials are everywhere—whether it’s the phone that’s in your hands as you currently read this blog, or the plant-based burger that you’re about to enjoy. Materials innovation is occurring on multiple fronts, and IQT will continue to keep an eye out for innovations with applications in the national security realm.