It wasn’t until 2004 that graphene, a material that is tougher than diamond, more conductive than copper and more flexible than rubber was successfully isolated. The allotrope of carbon consisting of a single layer of atoms arranged in a two-dimensional honeycomb lattice nanostructure was described as a “wonder material”.

However, in the 18 years since the material’s isolation at the University of Manchester in 2004, it has found few commercial applications. That saw graphene written off as hype in many quarters. However, the problem with graphene wasn’t that it was a solution looking for a problem.

As one of the most conductive materials known to man, while being both extraordinarily tough and flexible, graphene always had the potential to revolutionise electronics. The problem has always been that it is extremely difficult to make. Especially in commercial quantities.

Simon Thomas, co-founder and chief executive of Paragraf, a promising graphene start-up, explains:

“….people realised it’s pretty difficult to make. They had the applications, but couldn’t make the graphene itself; the cart came before the horse. People started thinking, well, if we can’t make it in a way that can be used in electronics, what can we use it in, because this is a wonder material! It went from being a revered electronic material to a pair of underpants.”

The “underpants” comment refers to an event at the House of Commons attended by Thomas that featured an underwhelming presentation of different graphene applications. Infusing underpants with graphene’s antimicrobial qualities could supposedly improve hygiene

Thomas, an engineer and physicist, recollects,

“I thought, this can’t be serious. I was close to walking out of the room.”

That was in 2018. In the 6 years since, Thomas’s start-up Paragraf has developed new ways to produce graphene wafers that can be used as the base component for semiconductor processing. As a result, Thomas says, “we’ve started to see the electronics thing come back. You will start to see a lot of graphene electronic devices coming to the market.”

Paragraf was founded in 2017 to commercialise a new way to make graphene developed in 2015 by a University of Cambridge research project where Thomas worked with Ivor Guiney and Professor Sir Colin Humphreys. The trio beat other university companies and tech giants including IBM, Samsung and Intel to develop a technique able to form graphene wavers of up to eight inches in diameter.

Graphene’s commercial applications

Some of the most notable commercial applications of graphene developed by Paragraf include:

Chemical and electrical sensors – graphene products can increase sensitivity by a factor of more than thirty.

Prototype Covid test – a graphene layer in the test gives a level of conductivity that allows for results as accurate as PCR tests to be delivered in less than a minute.

Medical tests – other rapid tests being developed by the start-up include one to determine if patients need to be prescribed antibiotics and one for early-stage cancer detection.

Magnetic field sensor – Paragraf’s first commercial product, its graphene-based magnetic field sensors are already being used in electric vehicles and by the aerospace sector as well as in quantum computing. Rolls-Royce and Switzerland-based Cern,  The European Organization for Nuclear Research, are both customers.

However, Paragraf’s primary commercial goal remains to integrate its graphene products into electronics and particularly microchips. To that end, the company’s graphene is being overlaid on silicon wafers which means the semiconductor industry won’t have to change anything around their supply chains and manufacturing processes.

Thomas, who has a background in the semiconductor industry, says that the chips currently used in smartphones, EVs and other high tech devices are already stretching the capacity of silicon. As such, new breakthroughs in processing power are likely to require new materials, like graphene.

The supply chain crisis that has led to a severe global shortage of semiconductors has slowed Paragraf’s progress and made finding a manufacturing partner difficult. And while Thomas expects things to get worse before they get better, delaying the manufacture of consumer electronics like smartphones further over the next couple of years.

But within 3 or 4 years he expects the chip drought to have turned into a glut that will make finding a manufacturing partner easy. In the meanwhile, the company is investing in its own manufacturing facility. Thomas explains the logic with:

“For the early volumes, we have to do this ourselves. If we can show other fabs that a small company can make devices that are competing with what they’re doing, imagine what they could do with their infrastructure. It’s about getting over that hill of acceptance.”

Can you invest in graphene?

A recent market intelligence report covering the global graphene market estimated its value at $388.8 million in 2021 and expects it to increase to a little over $4 billion by 2028 at a CAGR of 39.8%.

The report highlights potential applications of graphene in the creation of next generation electronics such as bendable smartphones, wearables, transistors, capacitors, semiconductors and sensors. It can be used as a coating to improve current touch screen technology.

It’s fair to say graphene production and the manufacture of graphene products is still a very early stage industry. The companies developing it are mainly all start-ups and relatively small, making them inherently risky investment prospects.

High net worth and sophisticated investors might consider keeping an eye out for the private investment rounds of graphene start-ups like Paragraf, which earlier this year raised $60 million through a series B venture financing round. Investors included Amadeus Capital, also an early backer of Oxford Nanopore, which operates an early-stage EIS fund.

There are a handful of publically listed graphene-focused start-ups, however, they are all small or microcaps and have generated little in the way of revenues to date. As such, while the potential of graphene means they all have to be considered as having significant potential upside, they all represent a high risk profile at this stage of their development.

But four that are worth tracking are:

Versarien

Listed on London’s AIM exchange, Verarien has a market cap of a little under £37 million. The advanced engineering materials group offers its clients a range of engineering solutions, including graphene and owns specialist graphene subsidiaries including 2-DTech Limited, Cambridge Graphene Limited, AAC Cyroma and Versarien Graphene Inc., which all have different areas of expertise within graphene development and manufacturing.

Haydale Graphene Industries

Also listed on the AIM exchange, 2010-founded Haydale Graphene Industries is worth just £12.89 million. A graphene and nanomaterial company, Hardale is working on a range of graphene-based inventions it hopes will revolutionise the aerospace, automotive, medical, energy, and printing industries.

Applied Graphene Materials

AIM-listed and founded in 2010 again, Applied Graphene Materials has a current market cap of just under £11 million. The company is a self-proclaimed world leader in the development and application of graphene nanoplatelet dispersions for customers in the coatings, composites and functional materials sectors but like other start-ups in the graphene space is still to achieve serious commercial traction and revenues.

Directa Plus

Also listed in London, 2003-founded Directa Plus is the biggest of the four graphene companies here with a market cap of £59.41 million. The company describes itself as

“one of the largest producers and suppliers worldwide of graphene nanoplatelets-based products for use in consumer and industrial markets.”

The company has filed a patent for graphene-enhanced golf balls and says it is working with major partners in the field the application of graphene in footwear, both in linings and in outsoles.

The company has also developed a graphene-based product called GRAFYSORBER®, marketed as ideal for tackling environmental emergencies, including both historical and recent pollution and the removal of oil and hydrocarbons in many industrial remediation activities.