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Monday, June 29, 2020

Moore’s Law states that the number of transistors on a microchip or processing power doubles about every 18 months.  Although the exponential nature of Moore’s Law is unlikely to last forever, it isn’t going to get shut off like a spigot either. Consumers are far too demanding for more computation power, often in smaller and smaller devices. These are trends that you can take to the bank.

To that point, Thermal Interface Materials (TIM) aren’t the sexiest segment in technology, but they absolutely are part-in-parcel to the success of many different applications, whether it’s your iPhone, a Tesla, or electronics on spacecraft and satellites. A TIM is a material that acts as an interface sandwiched in between two surfaces transferring heat from its source (i.e. computer chip) to a heat sink’s surface for heat dissipation. With demand for more power in miniaturized products, engineers are constantly challenged to find the delicate balance between high performance (generates more heat) and heat management, which if not done properly degrades performance.

You may not think much about it, but if you’ve ever had a laptop on your legs and it felt like it was burning you, then you experienced just how much heat can be produced in a relatively small device.

That’s one application in a single market segment. In IDTechEx’s granular look at the TIM market, analysts saw it necessary to break the market down into 51 specific sub-segments – consumer electronics and telecom being two of the largest – in order to provide clarity on just how robust the oft-overlooked TIM market is.

In their report, the industry experts at IDTechEx determined that the emergence of next-generation technologies in consumer electronics, 5G, electric vehicles, etc. will demand usage of a new class of TIMs, including advanced carbons. Carbon has long been proven to have properties that mitigate excessive temperature rise and deliver value in heat dissipation, but to that purpose has historically been mostly relegated to niche markets, such as aerospace. Carbon is also highly electrically conductive, which makes it ideal for applications like 5G and cloud computing that may require electromagnetic or EMI shielding properties.

The emerging market opportunities have mind-numbing scale. The space industry, to which KULR is a mainstay, is forecasted to grow from current $350 billion to $1 trillion by 2040.  Consider revenue in consumer electronics is expected to grow from $242.3 billion in 2017 to $450.4 billion by 2024 and that the 5G infrastructure market size is forecasted to be worth $496.6 billion by 2027 with a CAGR of a stunning 106.4%. If Covid-19 taught us nothing, it is about the value of cloud computing, a market growing at 14.9% annually expected to reach $266 billion by 2027.

KULR Technology Group (OTCQB:KULR) is targeting these markets and more with its carbon TIM and heat sink (including KULR’s Thermal Runaway Shield) solutions. The Company is considered to be both an emerging player and industry leader in carbon-fiber based thermal management technologies.  The Company has over two decades experience deploying its solutions in numerous aerospace applications, with the latest being a heat sink for the Mars 2020 Rover. Customers and partners include the likes of NASA, Boeing, U.S. Air Force, Lockheed Martin, Ball Aerospace and Leidos.

In addition to its passive propagation resistant battery/energy storage technologies, KULR offers a suite of products that include a variety of thermal interface materials and heat sink solutions for electronics applications in large consumer facing markets that include consumer electronics, 5G infrastructure/communications, cloud computing, and E-mobility (electric transportation).

KULR’s “secret sauce” is its proprietary carbon fiber technology that has positioned the company as a leader in the accelerating trend towards more mainstream usage of carbon in technology. In short, technology that has been validated under some of the harshest conditions known to man is coming to Main Street.

The potential applications are nearly endless for KULR. Their ARA thermal capacitor is a carbon fiber heat sink utilizing phase change material (PCM) to absorb or provide heat, reducing system temperature excursions, which subsequently extends the life of products while eliminating the need for active cooling (e.g. a fan). Further, its low mass saves on product weight, which can be an important criterion for electronics manufacturers. Uses here range from compact devices to high power lasers to batteries in space.

The San Diego-based company’s product bag also contains a thermal interface material called URSA Fiber Thermal Interface (FTI) material. This high-performance product is flexible allowing for compliant (form-fitting) application and has high thermal conductivity at relatively low contact pressures (contact pressure can put physical stress on a chip).  It’s a little techie, but the combination of high-thermal conductivity, high electrical conductivity, flexibility, being light-weight and requiring low contact pressures is what makes these products unlike most all conventional TIMs used in electronics.

Importantly, KULR technology increases product performance and reliability and is cost-effective. The growing trend for more advanced high-performance thermal management solutions along with cost-effectiveness is a recipe for broad product adoption.

The company's goal is to leverage their long-standing relationship with the US Department of Defense and NASA, further strengthen their research and development (“R&D”) with government funding, increase industry awareness of their world-class battery safety and electronics thermal management technologies, and expand their channels into mass commercialization. The company is forecasting 200%+ growth year over year for Q2’2020.

The technology and battery industries are starting to understand what KULR is bringing to the table.  So is the investment community. On June 4, shares – which were trading on relatively low volume – touched a low of 55 cents. Fast forward a few weeks and volume has increased dramatically while the price per share made a new 52-week high at $3.70. Shares closed today at $1.92 (June 29).

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