ATP Working Paper Series
Working Paper 05–01
The United States has continued to lead in developing new technologies and is the major source for new concepts in battery, fuel cell, and other budding technologies supporting the nation's energy and portable communications future. Asian and European companies, however, are developing the manufacturing expertise to commercialize many of these technologies.
In the area of advanced rechargeable batteries, and other areas as well, the Advanced Technology Program (ATP) has funded projects that were technically successful, but where the out-look for U.S. companies' becoming major commercial players in high-volume applications is not promising now. U.S. companies have opted out of many markets. ATP seeks to better understand the factors affecting commercialization of technology as a means of:
This study uses the case of lithium-ion (Li-ion) batteries to seek a better understanding of industry factors that affect the introduction of new rechargeable batteries and similar types of technologies into the marketplace.
Li-ion batteries power the devices of the digital revolution— including telephones, music players, digital cameras, and notebook computers. Today's typical mobile phone owes its size and weight reductions largely to the advent of the Li-ion rechargeable battery.
Over the past 10 years, the market for Li-ion systems has grown from their commercial introduction with minimal production in 1992 to over $3 billion in 2003. This technology sparked the expansion of cellular telephones and notebook computer applications. Production of Li-ion cells originally centered in Japan, but new manufacturers with significant production capability have now appeared in China and Korea .
U.S. researchers were once on the leading edge of key technical developments enabling the Li-ion battery systems in use today. The National Electronics Manufacturing Initiative (NEMI) roadmap studies recognized advanced rechargeable batteries as a critical component in the growth of portable electronic devices. The U.S. battery industry was aware of the importance of this emerging technology, but did not try to compete with stronger players overseas. In spite of the rapid growth of this important market segment, the United States has no large volume producers of this technology. There are several reasons for this.
Why are there no volume Li-ion manufacturers in the United States?
Factors Affecting U.S. Production Decision
Several East Asian countries, including China, South Korea, Taiwan, and Malaysia, as well as Japan, have internal structural advantages for domestic companies over what U.S. companies experience at home; these encourage commercialization of new technology. Some European countries have also developed such advantages, but Japan is the archetypical example. These structural advantages include:
American companies sometimes move production to East Asia to take advantage of government incentives or lower labor costs. This inevitably results in an eventual transfer of technology to the host countries—product as well as production technology. Batteries are only one example. Two others considered in this study were fuel cells and electronic chips and components. Fuel cells have a short window of opportunity to begin manufacture in the United States . Manufacture of electronic components, such as displays, will likely follow the course of IC chips and Li-ion batteries to Asia .
These factors should be kept in mind when ATP evaluates the likelihood that new battery and related technologies will be commercialized in the United States . These are the factors that have demonstrated the most leverage in U.S.-firm decision-making. Although Japan has lately been suffering economic malaise, it is a misperception that the advantages that Japan enjoyed though the 1980s no longer apply.
The United States still leads in developing new technologies and is the major source for new concepts in battery, fuel cell, and display technologies. The United States is an incubator for new technologies relating to the electronics industry, while the Asian and European companies develop the manufacturing expertise. There could be a tendency in the future for technological development to follow manufacturing in moving to East Asia as a natural consequence of Asian companies' development of manufacturing expertise.
Date created: July 21,
NIST is an agency of the U.S. Commerce Department