Smart coatings, i.e., coatings that respond “intelligently” to various mechanical, electrical, thermal and optical stimuli will present attractive prospects for the coatings industry over the next decade. Smart coatings have been a focus of the coatings R&D environment for several years, but are now quickly achieving functionalities sufficient to take them commercial. At the same time, more smart coatings ideas are starting to be investigated -- n-tech is hearing that when large coatings firms brief the R&D community on areas that they might fund, smart coatings are mentioned increasingly often. This is in line with n-tech’s latest research, which indicates that the market for smart coatings is already at $1.5 billion, can be expected to reach $8.0 billion by 2021 and then go on to almost $35 billion by 2025. This would put smart coatings at a share of just under 20 percent of the entire worldwide coatings market in 2025.

1. n-tech Research Article
Smart Coatings: The Next Big Opportunity in the
Coatings Industry
July 2016
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Smart Coatings: The Next Big Opportunity in the Coatings Industry
Smart coatings, i.e., coatings that respond “intelligently” to various mechanical, electrical,
thermal and optical stimuli will present attractive prospects for the coatings industry over
the next decade.
Smart coatings have been a focus of the coatings R&D environment for several years,
but are now quickly achieving functionalities sufficient to take them commercial. At the
same time, more smart coatings ideas are starting to be investigated -- n-tech is hearing
that when large coatings firms brief the R&D community on areas that they might fund,
smart coatings are mentioned increasingly often.
This is in line with n-tech’s latest research, which indicates that the market for smart
coatings is already at $1.5 billion, can be expected to reach $8.0 billion by 2021 and then
go on to almost $35 billion by 2025. This would put smart coatings at a share of just
under 20 percent of the entire worldwide coatings market in 2025. In Exhibit A, we provide
a graphic summary of our projections of smart coatings’ revenues of the next decade.
A Shifting Opportunity Landscape for Smart Coatings
One word of caution here: much of the dramatic growth that n-tech expects to see in the
smart coatings business in the next decade will come at the expense of existing products.
Smart anti-icing coatings can reduce the amount of antifreeze used and lower the amount
of corrosion that traditional anti-icing treatments cause. So at the right price these
advanced de-icing coatings would soon cause a decline in the market for traditional de-
icers.
As n-tech sees it, this kind of thing has profound consequences for the coatings industry.
It will certainly open up opportunities for start-ups. We already have SLIPS Technologies
(omniphobic coatings) and Autonomic Materials (self-healing coatings) pioneering on this
path. We anticipate to that it will not be long before venture capitalists will start to take a
lot more notice of smart coatings.
For the coatings industry establishment, the message of smart coatings is decidedly more
mixed. From our checks of the industry, many in the smart coatings community believe
that the large coatings and chemicals companies are dragging their feet on bringing smart
coatings to market due to fears of cannibalizing existing coatings lines.
Another view is that big coatings firms are just unwilling to fund external research and
want to do everything in house. While this view is more speculative, there is some logic
to it. n-tech believes that the arrival of smart coatings is going to be quite disruptive for
the large coatings makers. Best to own the IP of what will replace your product line than
license from a 3rd party.
We think the coatings suppliers may find some of their old lines quickly go out of date so
they may face risks and the need to invest in R&D that they didn’t quite expect or plan

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for. For some established coatings firms, the smart coatings revolution may actually
creep up on them and catch them unawares.
The Way We Are: The Smart Coatings Market in 2016
Although the smart coatings business will generate $1.5 billion in 2016, a lot of these
revenues at present come from very specialist applications.
n-tech has pegged more than $360 million revenues in 2016 from smart antimicrobials,
which expect to be used in applications such as preventing the spread of resistant
microbe and hospital acquired infections (HAIs) on surgical tools, implants and critical
surfaces in hospitals. There will be another $620 million or so in 2016 revenues from
smart anti-corrosion, ant-icing and anti-fouling coatings, which together n-tech is referring
to as smart protective coatings.
While these are undoubtedly large sums of money, the technological developments from
which they are derived seem less than revolutionary because the use of this current
generation of smart coatings is so narrow. Also, because the price of these coatings is
high, the comparatively large revenues mask a relatively low use of smart coatings in real
terms at the present time.
Smart Coatings Market Growth by 2021: Billion Dollar Plus Market Sectors
As n-tech sees things, five years from now the smart coatings revolution will be in full
swing. We anticipate that some of the larger coatings firms that are ignoring this trend
now will be rapidly forced to catch up either by overpaying for acquisitions or spending
large sums of cash to catch up. The cautionary tale of Kodak who ignored digitalization
and responded and too late applies.
A secondary – but very interesting – question is how the spate of mergers and acquisitions
that we are currently seeing in the coatings/specialty chemicals space will impact the
emergence of specialty coatings. Will this M&A activity speed up the adoption of smart
coatings on the grounds that management thinks coatings companies needs new product
strategies? Or will management within companies be too busy dealing with integration
issues or human capital departures to make novel products their priority?
In any case, we think by 2021, smart coatings will be mainstream. The anti-icing coatings
that we mentioned above will be generating well over $1 billion. But we think that cost
declines, performance improvements and technological evolution will have worked their
magic to “popularize” smart coatings and open up vast consumer markets to them.
Consider, for example, smart anti-corrosion coatings. This is a $240 million market today,
with most of these revenues coming from very demanding applications i.e., preventing
damage to offshore oil rigs. However, n-tech believes that by 2021, the price points for
smart anticorrosion coatings will have reached a point where high-end autos and trucks
are going to start using these coatings. By 2021 we see smart anti-corrosion markets as
generating about $920 million in revenues.

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Similarly with smart self-cleaning coatings. While currently a real product, they are mostly
low-performance and not especially long lasting. One can find such products in the
automotive aftermarket or in the niche market for residential self-cleaning windows. But
many of the products that are out there right now are little more than novelties. A close
look at the R&D going on in the self-cleaning field, however, has convinced n-tech that
we are on the cusp of major improvements in self-cleaning technology and we believe
that there are so many areas where a viable class of self-cleaning coatings could be
applied that we are seeing $1.7 billion in revenues from self-cleaning coatings in 2021.
But Not All Smart Coatings Will Be Winners
As all of this suggests, n-tech is quite bullish about the prospects of smart coatings.
However, not every smart coating can be a winner. In some cases, this is just because
the technology is so far from being commercialized that it might take a decade to generate
any revenues at all.
Solar paint is the best example here. The idea of solar paint is that you coat a surface,
slap on a couple of electrodes and you have an embedded photovoltaic panel capability.
There are some interesting experiments in this area too, but absent a genuine
breakthrough, we don’t see this idea making much money for the coatings industry for
quite some time to come.
And in other areas new functionalities may be better provided by means other than smart
coatings. For example, OLED technology may be a better way to go in many
circumstances than a color-shifting coating. Also, while electrochromic and SPD coatings
for smart windows are likely to be money-spinners, n-tech doesn’t see the other half a
dozen self-dimming windows coatings likely to make much money.
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
$Millions
©n-tech Research 2016
Smart Coatings Markets by Functionality
Camouflage
Solar paint
Smart anti-microbials
Color-shifting coatings
Other self-dimming
SPD
Electrochromic
SHM and smart skins
Anti-drag
Self-cleaning
Anti-fouling
Anti-corrosion

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See the n-tech Research report, “Smart Coatings Markets 2016-2025”
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5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
$Millions
© n-tech Research 2016
Total Market for Smart Coatings 2016-2025