Surface science: new technologies show the most promise.

Surface science instrumentation includes five major technologies that probe the surface or a thin surface layer of samples. Previously, IBO included only four technologies in this segment, but we now have added research light microscopy as an obvious complement to the other methods discussed in this section. Just as light microscopes provide an image of the sample, most of these techniques can be used to scan across a planar surface and build up an image using software techniques to convert analytical data into appropriately color-coded information. Light microscopes are a staple of laboratories in many disciplines and industries, and thus the addition of this $1.3 billion market has significantly altered the landscape of this segment when compared to our previous forecasts. Many surface science techniques are focused on semiconductor and materials science applications, but several also have important uses in life science research. Of these, scanning probe microscopy (SPM) and confocal microscopy stand out. In total, the $3.25 billion surface science market should grow 5.3% in 2006.

As previously mentioned, research light microscopes are now a market covered by IBO. Many of the major optical microscope suppliers are familiar names in the laboratory world, and adding these products will help produce a more balanced picture of the overall laboratory market for surface science. Within this segment, compound microscopes and stereomicroscopes are the two major product segments, either of which can be augmented by digital cameras for image capture. The total market for these scopes was approximately $1.28 billion in 2005. The market is characterized by a strong component composed of replacement sales. Consequently, overall growth in this segment will be in the low single digits.

Before the addition of research light microscopes, electron microscopes formed the largest individual market within surface science, with sales over $1.1 billion in 2005. Scanning electron microscopes (SEMs) have wide applications in a variety of fields, while tunneling electron microscopes (TEMs) and focused ion beams (FIBs) are more limited to semiconductor and metallurgical applications. However, FIBs, which have only been commercially available for a decade or so, are becoming more versatile. All together, electron microscopy is forecast to grow at 7.5% for 2006.

Business developments have recently transformed the confocal microscopy market, with acquisitions affecting the top suppliers. In 2004, Carl Zeiss acquired Bio-Rad's confocal business (see IBO 5/31/04), and, in late 2005, Danaher acquired Leica Microsystems (see IBO 7/15/05). An evaluation of these and other business developments in this market have prompted IBO to increase significantly our previous estimate of the size of this market.

Technical developments also continue to transform the technique. Although multiphoton laser scanning microscopes continue to experience growing demand in life science applications, spinning disk technology is making something of a resurgence. Systems incorporating Nipkow disks and similar scanning head technologies are overcoming some of the problems that limited their applications in decades past.

SPM includes several related techniques, of which atomic force microscopy (AFM) is the most important. SPM continues to exhibit the best growth in surface science, due to hot applications in nanotechnology and the life sciences. Another strong source of demand is the semiconductor industry, which should provide relatively stable demand through 2006, contributing to an overall growth rate of 8.6%.

Surface analyzers encompass a range of surface probing technologies (Auger, SIMS, ESCA, EPMA) that are typically carried out under vacuum conditions. Although many of the applications for these instruments involve conducting metals or semiconducting materials, secondary ion mass spectroscopy (SIMS) is being increasingly used as an analyzer for biological samples, though these applications are still a minor part of the whole market. The total surface analyzer market should grow around 4.5% in 2006.

2005 Surface Science Market by Product Type

Initial Systems   73%
After-market      12%
Service           15%

Note: Table made from pie chart.

2005 Surface Science Supplier Market Shares

JEOL      12%
Hitachi   11%
Olympus   10%
Leica      9%
FEI        6%
Others    52%

Note: Table made from pie chart.

2004-07 Total Surface Science Instrumentation Market

$Millions

2004   3093
2005   3253
2006   3425
2007   3607

Note: Table made from bar graph.

Surface Science Instrumentation Market Leaders

Light Microscopy      Olympus, Leica (Danaher)
Electron Microscopy   Hitachi, JEOL
Surface Analyzers     Ulvac-PHI, Cameca
SPM                   Veeco, Omicron Nano
Confocal              Carl Zeiss, Leica (Danaher)

Surface Science Instrumentation 2005-06

                      Market Share   Growth Rate

Light Microscopy           39.2%          2.2%
Electron Microscopy        35.7%          7.5%
SPM                         9.1%          8.1%
Surface Analyzers           8.9%          4.5%
Confocal Microscopy         7.1%          8.6%
Total                     100.0%          5.3%