FREEDONIA FOCUS

ON

Advanced
Ceramics

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 CERAMICS

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.

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INDUSTRY OVERVIEW
Market Size
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.

Advanced Ceramic Demand Trends

12 15%

10% Demand Annual %

10 Year
5%
(mil $) Growth
8 1999 8200
0%
6
2000 9050 10.4
-5% 2001 7940 -12.3
4 2002 7465 -6.0
-10%
2003 7765 4.0
2 -15% 2004 8130 4.7
0 -20%
2005 8625 6.1
2006 9400 9.0
2007 10460 11.3
2008 10700 2.3
billion $ % growth
2009 9050 -15.4

Source: The Freedonia Group, Inc.

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Product Segmentation
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).

Advanced Ceramic Demand by Product, 2009

($9.1 billion)

Ceramic Electrical &

Coatings Electronic
53 %
9.5% Parts
Monolithic
Ceramics
86.5% Catalyst
18% Supports
Ceramic
Matrix
Composites 29% Other
4.0% Monolithic

Source: The Freedonia Group, Inc.

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.

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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,

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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.

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Market Segmentation
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.

Advanced Ceramic Demand by Market, 2009

($9.1 billion)

Electronic
17.8% Components
27.7%
Electrical Equipment

Industrial Machinery
14.0%

29.5% Transportation
Equipment
11.0%
Other

Source: The Freedonia Group, Inc.

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).

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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.

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Material Overview
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).

Advanced Ceramic Demand by Material, 2009

($9.1 billion)

Titanate
Alumina 19%
39%
Ferrite
10%
Other
Types
32%

Source: The Freedonia Group, Inc.

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Regulatory & Environmental Factors

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.

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.

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INDUSTRY TRENDS & FORECASTS

Market Environment
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).

Key Indicators for Advanced Ceramics

(billion dollars)

% Annual Growth
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

Source: The Freedonia Group, Inc.

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Product Forecasts
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).

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.

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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,

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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.

Advanced Ceramic Demand by Product

(million dollars)

% Annual Growth
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

Source: The Freedonia Group, Inc.

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Market Forecasts
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.

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

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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.

Advanced Ceramic Demand by Market

(million dollars)

% Annual Growth
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

Source: The Freedonia Group, Inc.

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INDUSTRY STRUCTURE
Industry Composition
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.

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.

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Industry Leaders
Kyocera Corp. (NYSE: KYO) (TSE: 6971) AVX Corporation
6 Takeda Tobadono-cho 801 17th Avenue South
Fushimi-ku, Kyoto 612-8501 Myrtle 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.

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Ceradyne Incorporated (NASDAQ: CRDN)

3169 Red Hill 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.

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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.

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ADVANCED CERAMICS

Additional Major Companies Cited

BAE Systems (LSE: BA) 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

© 2010 by The Freedonia Group, Inc. Page 20

ADVANCED CERAMICS

RESOURCES
Trade Publications
Ceramic Industry www.ceramicindustry.com
Chemical & Engineering News http://pubs.acs.org/cen
Chemical Week www.chemweek.com
ICIS Chemical Business www.icis.com

Associations
Association of American Ceramic Component Manufacturers http://aaccm.org
United States Advanced Ceramics Association www.advancedceramics.org
The American Ceramic Society http://ceramics.org

Related Freedonia Studies

Freedonia Group studies in the area of this report include #2632
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 info@freedoniagroup.com. For information on any Freedonia
study please visit our website at www.freedoniagroup.com.

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© 2010 by The Freedonia Group, Inc. Page 21