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Spotlight on… Graphene

In 2010, two Russian scientists shared the Nobel Prize in physics for isolating what has the potential to be the material of the 21st century – graphene. The Investec Research Team has been looking into what makes it such a valuable commodity and the investment potential it could offer our clients.

Topic: Investing

What it is – Pound for pound 200 times as strong as steel, light-weight and a good conductor of both electricity and heat, this two dimensional sheet of pure carbon has a lot of potential. Combine these features with the fact that this is not some elaborate man-made compound but instead just a simple form of one of the most common elements in the earth’s crusts and the opportunities become very exciting.

How it can be used – Over 9,000 patents were published for applications of graphene in 2014. Its unique properties mean we are likely to start seeing it being used across a broad range of industries within the next two decades including manufacturing, medicine and computing. IBM for example, are already beginning to investigate how to use graphene to cram more transistors on to a computer chip. Being transparent and electrically conductive means it also has huge potential for touch screens on phones, tablets and smart watches. Scientists at Princeton University have even identified the potential to use the material as a sensor on a tooth to monitor respiration rates.

A few concerns – As we get set for graphene to become part of our everyday lives, it is worth remembering the hype around nanotubes five years ago. These were simply sheets of graphene rolled into tubes, but concerns around toxicity and high production costs saw interest in their production wane.

Furthermore, whilst the possible application of graphene are wide-reaching, the challenge is producing it in quantities and at prices that are commercially viable.

How it adds up – IDTechEx, who provide independent research on emerging technology, forecasts that the market will be worth $390m in 2024, compared to $20m in 2014. Considering that this implies 35% growth each year for 10 years, it’s easy to see why graphene is an exciting prospect for investors.

This review has been issued by Investec Click & Invest Limited based on information from the Research Team of Investec Wealth & Investment Limited on the basis of publicly available information, internally developed opinions and other sources believed to be reliable. All views and recommendations expressed are based entirely on such data. Our material is regarded as non-independent research and a marketing communication which means that it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

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