F F R R E E E E D D O O N N I I A A F F O O C C U U S S O O N N HIGHLIGHTS INDUSTRY OVERVIEW Market Size Product Segmentation Market Segmentation Material Overview Regulatory & Environmental Factors INDUSTRY TRENDS & FORECASTS Market Environment Product Forecasts Market Forecasts INDUSTRY STRUCTURE Industry Composition Industry Leaders Additional Major Companies Cited RESOURCES March 2010 A A d d v v a a n n c c e e d d C C e e r r a a m m i i c c s s
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FFRREEEEDDOONNIIAA FFOOCCUUSS OONN
HIGHLIGHTS INDUSTRY OVERVIEW Market Size Product Segmentation Market Segmentation Material Overview Regulatory & Environmental Factors INDUSTRY TRENDS & FORECASTS Market Environment Product Forecasts Market Forecasts INDUSTRY STRUCTURE Industry Composition Industry Leaders Additional Major Companies Cited RESOURCES March 2010
• Advanced ceramic demand in the US is projected to increase 6.2 percent per year from 2009 to $12.2 billion in 2014. Gains will be spurred by a recovery in the economy and manufacturing activity from the current downturn.
• Monolithic ceramic demand is forecast to rise 5.9 percent annually through 2014 to $10.4 billion, remaining the dominant product segment. Growth will benefit from strong advances in applications such as membranes and medical.
• Ceramic matrix composite (CMC) demand is expected to grow 7.9 percent per year through 2014 to $535 million, the fastest pace of any product segment. Advances will derive from the increased use of CMCs in extreme environment applications where the enhanced strength and durability of these materials provide performance advantages.
• Advanced ceramic demand in the electronic component market is forecast to rise 4.8 percent per year through 2014 to $3.2 billion, remaining the leading advanced ceramic market. Gains will be stimulated by a rebound in electronic component production from the declines of the historical period.
• Advanced ceramic demand in the transportation equipment market is forecast to advance 9.9 percent per year through 2014 to $1.6 billion, the fastest pace of any market segment. Gains will be spurred by increased shipments of aerospace equipment, stricter emission standards on diesel engines and a rebound in motor vehicle production from a low 2009 base.
• Among the leading suppliers of advanced ceramics to the US market in 2009 were Kyocera (Japan), Ceradyne and CoorsTek.
Advanced ceramic demand in the US grew 2.2 percent per year from 2004 to $9.1 billion in 2009. Demand is highly sensitive to conditions in the macroeconomy because original equipment manufacturer markets for products produced from advanced ceramics (e.g., motor vehicles, industrial machinery, aerospace equipment, and electrical and electronic equipment) tend to be highly cyclical. In March 2001, the US economy entered into a recession, which had a negative impact on manufacturing activity and demand for advanced ceramic products. Furthermore, shipments of electronic components (the largest market for advanced ceramics) fell 25.7 percent in 2001 and an additional 10.1 percent in 2002, driving down demand for advanced ceramics. As the use of advanced ceramics has continued to expand, the importance of the electronic component market has been reduced. Between 2003 and 2008, demand benefited from rising manufacturers’ shipments and increased requirements for military armor. Higher prices, due primarily to increases in raw material costs, further promoted market value gains. However, advanced ceramic demand experienced a sharp decline in 2009 as a recession that began in December 2007 adversely impacted manufacturers’ shipments.
Electrical Equipment Market: Advanced ceramic demand in the
electrical equipment market reached $1.6 billion in 2009 after annual gains of 1.8
percent from 2004. All uses of advanced ceramics are included in this market, such as those instances where electrical equipment is utilized in the assembly of
various machinery and transportation equipment. Among the leading
applications for advanced ceramics in the electrical equipment market in 2009
are insulators and permanent magnets. Other applications include wiring systems, igniters, heating elements, heat shielding components and seals.
Industrial Machinery Market: Demand for advanced ceramics in the
industrial machinery market grew 3.8 percent per year between 2004 and 2009 to $1.3 billion. The hardness characteristics of advanced ceramics make them
vital to this market, where they compete primarily with metals. In machinery,
advanced ceramics are used in the production of products that include wear
parts (e.g., bearings, seals and valves, dies, wire guides and pulleys) and cutting tools (such as tools and inserts for metal cutting and forming machinery).
Transportation Equipment Market: Advanced ceramic demand in the
transportation equipment market declined 1.6 percent annually from 2004 to $995 million in 2009. This market includes motor vehicles, aerospace
equipment, trains, ships, and military planes and ground vehicles. Advanced
ceramics primarily find use in engine components, with other applications being
catalytic converters, diesel particulate emission filters and ballistic armor.
Other Markets: Demand for advanced ceramics in all other markets, as
an aggregate, reached $2.7 billion in 2009 based on annual increases of 6.8
percent from 2004. Other markets include chemical and plastic, environmental, body armor, medical products, and food and beverage preparation. In 2009,
chemical and plastic was the leading subsegment, where advanced ceramics
primarily find use as catalysts, with smaller volume applications that include
filters and membranes. The body armor market experienced the fastest growth of any market during the 2004-2009 period, due primarily to strong requirements
of soldiers in military operations in Afghanistan and Iraq.
In general, regulatory and environmental forces have played a positive role with respect to overall advanced ceramic demand. For example, ceramic filters and membranes are used to remove pollutants from aqueous waste streams in water treatment facilities and remove particulate contaminants from gaseous emissions, as in diesel engines and fossil-fueled electric power plants. With respect to the manufacture of advanced ceramics, the process is largely benign, using minerals that tend to be radiologically and chemically inert, thus reducing the prospect of waste disposal problems. However, this is not universally true. For example, potassium titanate ceramics, which are often manufactured in whisker or fiber form, do pose inhalation risks to workers who are in constant proximity. There are also health concerns about the inhalation of beryllia ceramic particulates.
Regulatory & Environmental Factors
The passage of clean air and water legislation (such as the Clean Air Act and the Clean Water Act) has increased demand for advanced ceramics used in membranes and filters. The largest factor by far has been the passage of legislation requiring the use of catalytic converters on automobiles. These devices contain ceramic catalyst supports on which the active catalyst resides. The extension of these regulations to cover diesel engines has sparked demand for diesel particulate filters and other emission control devices. The Environmental Protection Agency has been phasing in regulations designed to reduce emissions from diesel engines of all types, both mobile and stationary. For example, Tier 4 emission requirements for motor vehicle diesel engines are scheduled to take effect in 2010 to further cut the amounts of particulates and nitrogen oxides emitted by diesel engines. In addition to environmental regulations, the advanced ceramic industry is impacted by other regulatory agencies such as the Food and Drug Administration (FDA). For example, in August 2009, the FDA’s Orthopaedic and Rehabilitation Devices Advisory Committee unanimously recommended the approval of Johnson & Johnson’s DePuy Orthopaedics subsidiary’s PINNACLE COMPLETE system, which is the first ceramic-on-metal hip bearing that is approved in the US.
Kyocera Corp. (NYSE: KYO) (TSE: 6971) AVX Corporat ion
Industry Leaders
6 Takeda Tobadono-cho 801 17th Avenue South Fushimi-ku, Kyoto 612-8501 Myrt le Beach, SC 29578 Japan 843-448-9411 81-75-604-3500 www.avx.com www.kyocera.co.jp Kyocera, a leading supplier of advanced ceramics to the US market in
2009, produces a wide range of components and fine ceramic products primarily
for the electronics industry. In FY 2009, Kyocera had sales of $11.2 billion, of
which $2.0 billion were in the US, and employed 59,515.
Kyocera participates in the US advanced ceramic industry via its Fine
Ceramic Parts Group, Semiconductor Parts Group and Electronic Device Group
segments. The Fine Ceramic Parts Group segment, which had FY 2009 sales of
$614 million, produces products from ceramic materials such as silicon nitride,
silicon carbide, zirconia and alumina. The segment includes the operations of
the Kyocera Industrial Ceramics subsidiary, which manufactures fine ceramics
and other products for automotive and industrial applications. Specific ceramic
products include cutting tools, engine and gas turbine parts, semiconductor wafer
processing products, thin film substrates, and seal, pump and valve components.
Kyocera’s Semiconductor Parts Group segment, which had FY 2009 sales of
$1.3 billion, produces ceramic and organic packages for semiconductor and
other electronic components. In the US, the segment manufactures and sells
these products through the Kyocera America subsidiary. According to Kyocera
America, the company is the largest producer of ceramic semiconductor
packaging in North America. The Electronic Device Group segment, which had
FY 2009 sales of $2.3 billion, manufactures electronic components and devices
for the communication and information sectors. The segment includes the
operations of AVX, a subsidiary that is 71.49-percent owned by Kyocera. AVX’s
products include multilayer ceramic capacitors and other passive ceramic
materials, which are engineered to offer high corrosion resistance and low
sodium content, and are typically used in extreme-duty semiconductor applications. Zirconia ceramics include DURA-Z partially stabilized zirconia,
which features high strength, and fracture and fatigue resistance. Carbide
ceramics include PURE SIC silicon carbide for extreme wear and semiconductor wafer manufacturing applications. STATSAFE ESD-safe ceramics, which are
designed for electronic and semiconductor end uses, are available in zirconia,
alumina and silicon carbide varieties. CoorsTek also offers CERAPURE ceramic
components for medical device applications and CERASHIELD ceramic armor components. In addition, the company is involved in the industry through the C5
Medical Werks subsidiary, which produces implantable ceramic medical
components (e.g., hip, spinal and dental) from materials such as alumina,
zirconia and alumina/zirconia composites. In November 2009, CoorsTek and Innovate! Technology formed a joint venture called EmiSense Technologies,
which will utilize ceramics in the production of smart emission sensors.