Advanced Ceramics

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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

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ADVANCED CERAMICS

© 2010 by The Freedonia Group, Inc. Page 1

HIGHLIGHTS

• 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 CERAMICS


INDUSTRY OVERVIEW

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.

Market Size

Year Demand (mil $)

Annual % Growth

1999 82002000 9050 10.42001 7940 -12.32002 7465 -6.02003 7765 4.02004 8130 4.72005 8625 6.12006 9400 9.02007 10460 11.32008 10700 2.32009 9050 -15.4

Source: The Freedonia Group, Inc.

-20%

-15%

-10%

-5%

0%

5%

10%

15%

0

2

4

6

8

10

12Advanced Ceramic Demand Trends

billion $ % growth

ADVANCED CERAMICS


Demand for advanced ceramics in the US expanded 2.2 percent annually

between 2004 and 2009 to $9.1 billion. Advanced ceramics are defined as

higher value-added materials than traditional ceramics, exhibiting greater

hardness, improved resistance to heat and chemicals, and lower thermal and

electrical conductivity. As such, traditional ceramic products (e.g., flooring and

wall tiles, whiteware, pottery and china) are excluded. For the purposes of this

report, advanced ceramic products are defined as: monolithic ceramics, ceramic

coatings and ceramic matrix composites (CMCs).

Product Segmentation


Monolithic Ceramics: Monolithic ceramic demand advanced 2.1 percent

per year from 2004 to $7.8 billion in 2009. Monolithic ceramic products consist

entirely of ceramic powders that have been formed and fired to create the

desired product. However, because of shrinkage during firing and the inherent

difficulties in casting complex shapes, considerable machining (cutting, grinding

and polishing) is generally required to yield products with the necessary size,

shape and contour. In 2009, electrical and electronic parts accounted for over

half of total monolithic ceramic product demand.

Ceramic Matrix

Composites4.0%

Ceramic Coatings

9.5%

Electrical & Electronic

Parts

Catalyst Supports

Other Monolithic

Monolithic Ceramics

86.5%

Advanced Ceramic Demand by Product, 2009($9.1 billion)

53 %

18%

29%

ADVANCED CERAMICS


Electrical & Electronic Parts: Advanced monolithic ceramic demand in

electrical and electronic parts rose 0.2 percent annually during the 2004-2009

period to $4.1 billion. Ceramics are integral materials in a number of electronic

devices (semiconductors, integrated circuits and capacitors being the most

important) and electrical products (such as insulators and permanent magnets).

In electronics, the electrical and physical properties of ceramics make them ideal

for use as dielectric substrates upon which the active semiconductor or circuit is

built. Likewise, in most electrical applications, ceramics act as insulators due to

their electrical and thermal nonconductivity. Among the fastest growing

applications is the production of piezoelectric components. Piezoelectrics have

the capability to act as transducers, converting electrical power into mechanical

motion or vice-versa. Ceramics make up the majority of the piezoelectric devices

in use, although there are also polymeric components that perform the same

functions. Piezoelectric ceramics generally consist of lead zirconate titanate.

Catalyst Supports: Demand for advanced monolithic ceramics as

catalyst supports reached $1.4 billion in 2009 after annual growth of 1.9 percent

from 2004. Although there are a number of applications for ceramic catalyst

supports, the basic function is to provide structural support and high surface area

for a metal catalyst. Ceramics have evolved as the primary support material for

metal catalysts due to their high porosity, ability to tolerate high temperatures and

corrosive chemicals, and large surface area. Advanced ceramic supports are

utilized in catalytic systems for emission control, chemical synthesis, polymer

production and petroleum refining. The most widely used ceramic material in the

manufacture of catalyst supports is alumina, although other ceramics (such as

cordierites, titanates and zirconates) are also employed.

Other Monolithic Ceramics: Demand for all other monolithic ceramics,

as an aggregate, expanded 6.2 percent per year between 2004 and 2009 to $2.3

billion. Other monolithic ceramic products include filters, wear parts, body armor,

ADVANCED CERAMICS


engine parts, membranes, cutting tools and bioceramics. Filters (the leading

product in this subsegment in 2009 with 22 percent of demand) include pollution

control and process types. Body armor experienced the fastest growth (at 27.2

percent annually) of any advanced ceramic product during the 2004-2009 period.

Military conflicts in the Middle East (i.e., Afghanistan and Iraq), where troops

came in close contact with the enemy, fueled the need for personal ballistic

protection. In addition to body armor, other monolithic ceramic products that

experienced rapid growth between 2004 and 2009 were membranes (which are

most commonly used in either microfiltration or ultrafiltration applications) and

bioceramics, where monolithic ceramics are suitable for use in dental and

orthopedic implants due to their hardness, smoothness and biocompatibility

characteristics.

Ceramic Coatings: Demand for ceramic coatings grew 2.4 percent per

year during the 2004-2009 period to $860 million. Ceramic coatings consist of a

thin layer of ceramic material that is deposited in a molten state on a substrate of

metal, metal alloys or monolithic ceramics. The coating provides improved

resistance to wear, corrosion and temperature. Because it is difficult to mold

monolithic ceramics into complex shapes, ceramic coatings are used in a variety

of applications where the production of monolithic ceramics would be cost

prohibitive. Typical ceramic coating materials include ceramics based on

alumina, silicon carbide, titanium and zirconia. Among the leading ceramic

coating applications in 2009 were engine parts, cutting tools and wear parts.

Ceramic Matrix Composites: CMC demand advanced 3.7 percent per

year from 2004 to $365 million in 2009. CMCs were developed to provide

enhanced toughness to monolithic ceramics, which can be easily damaged

because of their known brittleness. As such, ceramic reinforcements -- usually

fibers or whiskers -- were added to a ceramic matrix to form a toughened CMC.

Major markets for CMCs include industrial machinery and transportation

equipment in applications such as wear and engine parts, and cutting tools.

ADVANCED CERAMICS


Demand for advanced ceramics in the US increased 2.2 percent per year

during the 2004-2009 period to $9.1 billion. The electrical, thermal and hardness

characteristics of advanced ceramic materials make them suitable for many

uses. In 2009, electronic components, electrical equipment, industrial machinery

and transportation equipment accounted for the majority of demand.

Market Segmentation


Electronic Component Market: Demand for advanced ceramics in the

electronic component market decreased 0.7 percent per year from 2004 to $2.5

billion in 2009. This market encompasses all advanced ceramics used in the

production of electronic components, such as those utilized in the assembly of

various equipment (e.g., motor vehicles and aerospace equipment). Advanced

ceramic materials employed in electronic components include alumina, silicon

carbide, ferrites, silicon nitride, aluminum nitride and boron nitride. Products that

utilize advanced ceramics include semiconductors and integrated circuit

packages (which accounted for the largest share of segment demand in 2009),

capacitors, and other components (e.g., resonators, inductors, klystrons,

magnetrons, connectors and traveling wave tubes).

27.7% 17.8%

14.0%

11.0%29.5%

Advanced Ceramic Demand by Market, 2009($9.1 billion)

Electronic ComponentsElectrical Equipment

Industrial Machinery

Transportation EquipmentOther

ADVANCED CERAMICS


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.

ADVANCED CERAMICS


Advanced ceramic demand advanced 2.2 percent annually between 2004

and 2009 to $9.1 billion. There are two major families of advanced ceramics:

oxides (e.g., alumina, beryllia and zirconate) and non-oxides (such as carbides

and nitrides). The common thread among oxides is the presence of oxygen in

conjunction with the base mineral element, such as in zirconia and oxygen to

form zirconium. Non-oxides utilize an element other than oxygen in their

manufacture. For example, carbides (such as boron carbide, silicon carbide,

titanium carbide and tungsten carbide) have a carbon constituent, while nitrides

(e.g., aluminum nitride, boron nitride and silicon nitride) utilize nitrogen. In 2009,

alumina (i.e., aluminum oxide) was the leading type of advanced ceramic,

followed by titanate, ferrite and other ceramic types. Alumina use benefits from

the material’s relatively low cost and favorable performance characteristics, such

as resistance to high temperatures, corrosion and abrasion; thermal conductivity;

and electrical insulation. Titanate ceramics are manufactured from the

combination of a variety of ceramic powders, all of which contain titanium. There

are two types of ferrite ceramics -- hard ferrites (which are permanently

magnetized) and soft ferrites (which are temporarily magnetic).

Material Overview


Alumina39%

Titanate19%

Ferrite10%

Other Types32%

Advanced Ceramic Demand by Material, 2009($9.1 billion)

ADVANCED CERAMICS


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.

ADVANCED CERAMICS


INDUSTRY TRENDS & FORECASTS

Demand for advanced ceramics is impacted by the overall performance of

the economy. In particular, the manufacturing sector affects demand because

advanced ceramics are utilized in the production of numerous products such as

electronic components, electrical equipment, aircraft and motor vehicles,

industrial machinery, chemicals and plastics. Beyond economic factors, markets

for advanced ceramics are also impacted by technological innovation, as

advanced ceramics replace other materials and new applications are developed.

Multinational dynamics create both threats (e.g., competition with foreign-based

producers) and opportunities (the opening up of offshore markets) for US-based

vendors of advanced ceramic products and advanced ceramic-using products

and systems. Other factors that impact advanced ceramic demand include

population levels, pricing trends, military activity, regulatory and environmental

issues, and competition from alternative materials (e.g., steel and titanium).

Market Environment

Item 2004 2009 2014 09/04 14/09

Gross Domestic Product 11868 14250 17900 3.7 4.7

Personal Consumption Expenditures 8285 10090 12310 4.0 4.1

Resident Population (million) 293.0 307.0 322.2 0.9 1.0

Manufacturers' Shipments 4106 4195 5320 0.4 4.9

Durable Goods 2160 1950 2525 -2.0 5.3

Nondurable Goods 1946 2245 2795 2.9 4.5


% Annual Growth

Key Indicators for Advanced Ceramics(billion dollars)

ADVANCED CERAMICS


Advanced ceramic demand in the US is projected to increase 6.2 percent

per year from 2009 to $12.2 billion in 2014. Monolithic ceramics will continue to

dominate advanced ceramics demand. However, CMCs and ceramic coatings

will achieve more rapid gains through 2014, due primarily to their favorable

performance characteristics (such as enhanced strength and durability).

Product Forecasts

Monolithic Ceramics: Monolithic ceramic demand is forecast to rise 5.9

percent annually between 2009 and 2014 to $10.4 billion, remaining the

dominant product segment. Gains will benefit from strong growth in applications

such as membranes and medical. In addition, demand will be driven by a

recovery in the production of many monolithic ceramic using products (such as

electronic and electrical products, machinery, and motor vehicles) from the low

levels of 2009. However, lower requirements for body armor will restrain

additional aggregate gains. In addition, competition from ceramic coatings and

CMCs will continue to rise.

Electrical & Electronic Parts: Demand for advanced monolithic ceramic

electrical and electronic parts is expected to expand 5.5 percent per year during

the 2009-2014 period to $5.4 billion. Gains will be fueled by a rebound in the

production of electronic and electrical products from the declines of the 2004-

2009 period. In addition, demand will be driven by expansion in the use of

electronic components in motor vehicles and machinery. Further promoting

gains will be rising demand for products such as insulators and permanent

magnets. The leading consumer of piezoceramics has historically been the US

military; however, piezoceramics are increasingly moving into commercial

applications, including fuel tank sensors for motor vehicles, transducers for

security sensors and components for electric motors. In addition, there is

considerable potential for growth in piezoelectric devices, not only in the

aforementioned applications, but also in the developing area of micromachines,

where small piezoelectrics could provide motive power.

ADVANCED CERAMICS


Catalyst Supports: Demand for advanced monolithic ceramics as

catalyst supports is projected to reach $1.9 billion in 2014 after annual increases

of 6.6 percent from 2009. Gains in catalytic converter applications will benefit

from rebounding motor vehicle production; however, this application has reached

maturity (all cars now include these devices), limiting further growth. Growth will

benefit from expanding chemical and plastic production, which will require

ceramic catalyst supports in process catalysts.

Other Monolithic Ceramics: Demand for all other monolithic ceramics,

as an aggregate, is forecast to advance 6.2 percent per year through 2014 to

$3.1 billion. Over the forecast period, filters will remain the leading product in this

subsegment, with gains boosted by strong demand for advanced ceramics in

particulate reduction filters for use on diesel engines. Monolithic ceramic

demand in wear part applications will be fueled by rising industrial machinery and

motor vehicle production. Demand for monolithic ceramic body armor is

expected to decline rapidly over the forecast period due to plans to draw down

troop levels in Iraq and Afghanistan, significantly lowering body armor

requirements. However, emphasis on improving the safety of US troops will

continue to provide opportunities for body armor through 2014. Between 2009

and 2014, membranes is expected to be the fastest growing monolithic ceramic

product, with demand growing 15.9 percent annually. Gains will be driven by

ceramics’ performance advantages, such as tolerance of high temperatures and

harsh chemicals. Monolithic bioceramics are projected to continue to experience

rapid growth through 2014 as an aging population will boost the demand for

monolithic ceramics in implantable devices (such as hip replacement systems

and dental implants).

Ceramic Coatings: Ceramic coating demand is expected to expand 7.7

percent annually from 2009 to $1.2 billion in 2014. Demand for ceramic coatings

in engine part applications will be stimulated by rising growth in the manufacture

of aerospace equipment and a rebound in motor vehicle production. In addition,

ADVANCED CERAMICS


the wider use of ceramic coatings on cutting tools to boost tool life will aid growth.

In wear part applications, ceramic coating demand will be spurred by their ability

to provide superior protection against corrosion and wear. Other potential growth

applications include building insulation, anti-corrosion and fire protection

coatings, and nanocrystalline ceramic coatings.

Ceramic Matrix Composites: Demand for CMCs is projected to grow 7.9

percent per year during the 2009-2014 period to $535 million, the fastest pace of

any product segment. Gains will derive from the increased use of CMCs in a

variety of extreme environment applications (such as ball bearings for corrosive

and high temperature environments), where the enhanced strength and durability

of these ceramics provide performance advantages. An acceleration in

transportation equipment production through 2014 will fuel CMC demand in

engine part applications. Carbon nanotubes are also finding greater use as

reinforcements in the production of CMCs due to their ability to significantly

increase the breaking resistance of CMCs, further boosting demand over the

forecast period.

Item 2004 2009 2014 09/04 14/09

Advanced Ceramic Demand 8130 9050 12200 2.2 6.2

Monolithic Ceramics 7060 7825 10420 2.1 5.9

Electrical & Electronic Parts 4075 4120 5380 0.2 5.5

Catalyst Supports 1275 1400 1925 1.9 6.6

Other Monolithic 1710 2305 3115 6.2 6.2

Ceramic Coatings 765 860 1245 2.4 7.7

Ceramic Matrix Composites 305 365 535 3.7 7.9

% Annual Growth


Advanced Ceramic Demand by Product(million dollars)

ADVANCED CERAMICS


Demand for advanced ceramics in the US is projected to grow 6.2 percent

per year between 2009 and 2014 to $12.2 billion. Gains will accelerate as

compared to the 2004-2009 period due to a recovery in the economy and

manufacturing activity from the current downturn. In addition, advanced

ceramics will continue to penetrate applications (such as capacitors, cutting tools,

orthopedic joint implants and membranes) where they are valued for their

favorable performance characteristics.

Market Forecasts

Electronic Component Market: Demand for advanced ceramics 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. In addition, the continued move toward miniaturization

will provide opportunities because advanced ceramics are among the preferred

materials for use in extreme environments, such as high performance and high

temperatures (in general, the environment of a component becomes more

extreme as the size of the component decreases).

Electrical Equipment Market: Advanced ceramic demand in the

electrical equipment market is expected to increase 6.4 percent annually from

2009 to $2.2 billion in 2014. Growth will benefit from rising electrical equipment

production levels. Demand for advanced ceramics in electrical insulators will be

aided by advances in the installation and maintenance of power transmission

equipment. Advanced ceramics used in permanent magnets will be boosted by

increased demand for small electric motors due to expanding production of

appliances and motor vehicles.

Industrial Machinery Market: Demand for advanced ceramics in the

industrial machinery market is projected to reach $1.8 billion in 2014 after annual

growth of 7.0 percent from 2009. Advances will be spurred by an acceleration in

machinery production over the forecast period. Ceramics’ use will continue to

ADVANCED CERAMICS


rise in various industrial machinery wear parts and cutting tools as end users

take advantage of the enhanced durability of these materials.

Transportation Equipment Market: Advanced ceramic demand in the

transportation equipment market is forecast to expand 9.9 percent per year

between 2009 and 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. Through 2014, additional gains will be limited by an

expected slowdown in the production of armored vehicles and aircraft due to a

deceleration in national defense expenditures.

Other Markets: Demand for advanced ceramics in all other markets, as

an aggregate, is expected to expand 5.3 percent annually during the 2009-2014

period to $3.5 billion. Through 2014, chemical and plastic will remain the leading

subsegment, with demand benefiting from rising plastic and chemical

manufacturing activities. Medical products are projected to post the most rapid

gains in this segment (with demand rising 9.4 percent annually) due to rising

demand for ceramics in joint implants and dental procedures.

Item 2004 2009 2014 09/04 14/09

Advanced Ceramic Demand 8130 9050 12200 2.2 6.2

Electronic Components 2605 2510 3180 -0.7 4.8

Electrical Equipment 1470 1610 2200 1.8 6.4

Industrial Machinery 1050 1265 1775 3.8 7.0

Transportation Equipment 1080 995 1595 -1.6 9.9

Other 1925 2670 3450 6.8 5.3

% Annual Growth


Advanced Ceramic Demand by Market(million dollars)

ADVANCED CERAMICS


INDUSTRY STRUCTURE

The US advanced ceramic industry includes firms ranging from relatively

small producers that specialize in a few product lines to multinational

conglomerates with a broad range of products. Barriers to entry are relatively

high in the industry, not so much because of the cost of raw materials, which are

generally inexpensive, but rather due to the potentially significant research and

development costs needed to develop new applications and products in order to

remain competitive. Manufacturing costs can also be significant, as the

machinery and equipment needed to form and finish advanced ceramic products

can be very expensive. In addition, convincing customers to make decisions to

switch to new advanced ceramic materials can be difficult, especially in

applications where the brittleness of ceramics has historically been a significant

hurdle to overcome.

Industry Composition

Among the leading suppliers of advanced ceramics to the US market in

2009 were Kyocera (Japan), Ceradyne and CoorsTek. Other suppliers

included Corning, Murata Manufacturing (Japan), NGK Insulators (Japan),

Saint-Gobain (France) and Vishay Intertechnology. Overall, companies that

have economies of scale, the resources to operate on a worldwide basis, and

technical expertise over a broad range of industries and applications are the

most likely to emerge as industry leaders. Smaller companies can also compete

by specializing in a limited number of product lines. For example, Pall is

primarily a filtration and water treatment technology company, rather than a

dedicated ceramic producer. However, in the area of ceramic membranes and

filters, it is a major factor. Acquisitions are conducted to expand a company’s

product lines and geographic markets, and to gain access to new technologies.

For example, in June 2009, BAE Systems (United Kingdom) completed its

acquisition of Advanced Ceramics Research, a producer of ceramic products

for military and commercial aerospace applications.

ADVANCED CERAMICS


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

components.

http://www.avx.com/�

http://www.kyocera.co.jp/�

ADVANCED CERAMICS


Ceradyne Incorporated (NASDAQ: CRDN)

3169 Red Hil l Avenue Costa Mesa, CA 92626 714-549-0421 www.ceradyne.com

Ceradyne, a leading supplier of advanced ceramics to the US market in

2009, is engaged in the production and marketing of advanced technical ceramic

products, powders and components for industrial, defense, commercial and

motor vehicle applications. In 2009, Ceradyne had sales of $400.6 million, of

which $264.8 million were in the US, and employed 2,040.

Ceradyne participates in the US advanced ceramic industry via its

Advanced Ceramic Operations, ESK Ceramics, Semicon Associates and Thermo

Materials segments. Through these segments, the company manufactures a

range of advanced ceramic products that are produced from ceramic materials

such as aluminum oxide, aluminum nitride, titanium diboride, silicon carbide,

silicon nitride, yttrium oxide, boron carbide and particulate composites. Many of

these materials are offered under the CERALLOY brand name. Ceradyne’s

Advanced Ceramic Operations segment had 2009 sales of $214.1 million and

manufactures ceramic products that include lightweight armor, orthodontic

brackets, bearings, and wear and engine parts. Specific products include

DEFENDER ceramic armor for applications such as body, aircraft and vehicle

protection. In 2009, ESK Ceramics had sales of $105.1 million and offers

ceramic powders and components such as TETRABOR boron carbide and

BORONID boron nitride powders. The Semicon Associates segment had 2009

sales of $7.7 million and manufactures products that include ceramic-

impregnated dispenser cathodes and samarium cobalt magnets. The Thermo

Materials segment, which had 2009 sales of $66.1 million, produces fused silica

ceramic components for industrial applications, including crucibles used to

produce polycrystalline silicon solar cells; tempering rolls for flat glass furnaces;

and ceramic missile radomes.

http://www.ceradyne.com/�

ADVANCED CERAMICS


CoorsTek Incorporated 16000 Table Mountain Parkway Golden, CO 80403 303-271-7000 www.coorstek.com

CoorsTek, a leading supplier of advanced ceramics to the US market in 2009, is a privately held integrated manufacturer of ceramics and other advanced

materials and related components for the semiconductor, medical, automotive,

aerospace, power generation, electronics and other industries. In 2009,

CoorsTek had sales of approximately $400 million and employed 2,360. CoorsTek participates in the US advanced ceramic industry through the

production of high-purity technical ceramics and related components. Among the

company’s ceramics are alumina, zirconia, carbide and electrostatic discharge

(ESD)-safe types. Alumina ceramics include PLASMAPURE varieties, which are designed for use in electronic, semiconductor and optical applications. In

addition, CoorsTek offers PLASMAPURE-UC ultra-pure alumina 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.

http://www.coorstek.com/�

ADVANCED CERAMICS


BAE Systems (LSE: BA)

Additional Major Companies Cited www.baesystems.com

Corning (NYSE: GLW) www.corning.com

Murata Manufacturing (TSE: 6981) www.murata.com

NGK Insulators (TSE: 5333) www.ngk.co.jp

Pall (NYSE: PLL) www.pall.com

Saint-Gobain (EPA: SGO) www.saint-gobain.com

Vishay Intertechnology (NYSE: VSH) www.vishay.com

http://www.baesystems.com/�

http://www.corning.com/�

http://www.murata.com/�

http://www.ngk.co.jp/�

http://www.pall.com/�

http://www.saint-gobain.com/�

http://www.vishay.com/�

ADVANCED CERAMICS


RESOURCES

Ceramic Industry

Trade Publications www.ceramicindustry.com

Chemical & Engineering News http://pubs.acs.org/cen

Chemical Week www.chemweek.com

ICIS Chemical Business www.icis.com

Association of American Ceramic Component Manufacturers

Associations http://aaccm.org

United States Advanced Ceramics Association www.advancedceramics.org

The American Ceramic Society http://ceramics.org

Freedonia Group studies in the area of this report include #2632

Related Freedonia Studies

Membrane Separation Technologies (April 2010; $4,900), #2574 Battery &

Fuel Cell Materials (November 2009; 253 pages; $4,700), #2524 Filters

(August 2009; 333 pages; $4,800), #2502 World Fuel Cells (May 2009; 419

pages; $5,800) and #2464 Diesel Engines and Related Parts (February 2009;

260 pages; $4,700). These and a wide variety of other studies are available from

The Freedonia Group by contacting customer service at 800.927.5900,

440.684.9600 or [email protected]. For information on any Freedonia

study please visit our website at www.freedoniagroup.com.

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or

transmitted in any form or by any means, electronic, mechanical, photocopying, recording or

otherwise, without prior permission of The Freedonia Group, Inc.

http://www.ceramicindustry.com/�

http://pubs.acs.org/cen/�

http://www.chemweek.com/�

http://www.icis.com/�

http://aaccm.org/�

http://www.advancedceramics.org/�

http://ceramics.org/�

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