Market Research: Global Market for Germanium and Germanium ... · Thus, there are several germanium...

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Euroresearch & Consulting LLC

Market Research: Global Market for Germanium and Germanium Products.

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CONTENTS

CHAPTER 1. GENERAL REVIEW OF THE INDUSTRY. ......................................................... 5

1.1. HISTORIC, PRESENT AND ESTIMATED CORRELATION OF GLOBAL GERMANIUM DEMAND AND SUPPLY. ................................................................................................................... 5

1.2. ANALYSIS OF PRICES ON GERMANIUM............................................................................ 13

1.3. GENERAL SIZE OF THE MARKET AND PRINCIPAL SEGMENTS OF GERMANIUM CONSUMPTION AND GERMANIUM CONTAINING PRODUCTS. ........................................... 31

1.4. THE MAIN TRENDS OF GERMANIUM PRODUCTION AND CONSUMPTION. ............. 38

1.5. THE PRINCIPAL FACTORS HAMPERING INDUSTRY DEVELOPMENT AND MARKET GROWTH. .......................................................................................................................................... 47

1.6. THE ANALYSIS OF THE IMPACT OF ACTUAL AND POTENTIAL ECONOMIC SANCTIONS ON THE INDUSTRY. ................................................................................................. 48

CHAPTER 2. THE PRINCIPAL FIELDS OF GERMANIUM APPLICATION: ANALYSIS OF MAJOR TRENDS AND AVENUES. ........................................................................................... 50

CHAPTER 3. THE ANALYSIS OF THE INDUSTRY OF PRODUCTION OF GERMANIUM AND ITS DERIVATIVES ACCORDING TO PORTER 5 COMPETITIVE FORCES MODEL. ............................................................................................................................... 53

3.1. THREAT OF NEW ENTRANTS. .............................................................................................. 53

3.2. THREAT OF SUBSTITUTE PRODUCTS. ............................................................................... 53

3.3. BARGAINING POWER OF CUSTOMERS. ............................................................................ 53

3.4. BARGAINING POWER OF SUPPLIERS. ................................................................................ 54

3.5 INTENSITY OF COMPETITIVE RIVALRY. .......................................................................... 54

CHAPTER 4. MAJOR CONSUMERS OF GERMANIUM (ANALYSIS ACROSS THE INDUSTRIES). 55

CHAPTER 5. KEY PARTICIPANTS OF VARIOUS SECTORS OF THE WORLD GERMANIUM MARKETS. ................................................................................................................ 62

1. Asturiana De Zinc S.A. ............................................................................................................... 65

2. Teck Cominco Limited................................................................................................................ 68

3. War Eagle Mining Company, Inc. .............................................................................................. 72

4. OZ Minerals ................................................................................................................................ 74

5. OJSC "Germanium" .................................................................................................................... 76

6. Chemical and technical developments Ltd.................................................................................. 79

7. Gelest, Inc.................................................................................................................................... 81

8. Indium Corporation (Germanium Corporation of America). ...................................................... 83

9. Recylex S.A. (Metaleurop S.A.) ................................................................................................. 85

10. N.V. Umicore S.A. ...................................................................................................................... 88

11. Lattice Materials Corporation ..................................................................................................... 92

12. Novotech, Inc. ............................................................................................................................. 94

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13. 5N Plus ........................................................................................................................................ 96

14. Yunnan Chihong Zinc-Germanium Co., Ltd. ............................................................................. 99

15. Yunnan Metallurgical (Group) General Company.................................................................... 101

16. China Germanium Co., Ltd. ...................................................................................................... 102

17. Axt, Inc. ..................................................................................................................................... 104

18. Germanium & Applications LLC .............................................................................................. 108

19. Soitec S.A. ................................................................................................................................. 111

20. Japan Algae Company Ltd. ....................................................................................................... 114

21. International Isotopes, Inc. ........................................................................................................ 115

22. William Rowland Ltd. ............................................................................................................... 118

23. GFI Advanced Technologies, Inc.............................................................................................. 120

24. Applied Materials, Inc. .............................................................................................................. 121

CHAPTER 6. THE ANALYSIS OF INDIVIDUAL GERMANIUM MARKETS ................... 124

6.1 THE UNITED STATES............................................................................................................ 124

6.2 CANADA .................................................................................................................................. 136

6.3 JAPAN ...................................................................................................................................... 141

6.4 EUROPE ................................................................................................................................... 145

6.5 FRANCE ................................................................................................................................... 152

6.6 GERMANY ............................................................................................................................... 156

6.7 ITALY ....................................................................................................................................... 160

6.8 THE UNITED KINGDOM ....................................................................................................... 163

6.9 SPAIN ....................................................................................................................................... 167

6.10 RUSSIA ..................................................................................................................................... 170

6.11 BELGIUM ................................................................................................................................. 174

6.12 REST OF EUROPE .................................................................................................................. 179

6.13 ASIA-PACIFIC ......................................................................................................................... 182

6.14 CHINA ...................................................................................................................................... 188

6.15 REST OF ASIA-PACIFIC ........................................................................................................ 194

6.16 LATIN AMERICA ................................................................................................................... 197

6.17 REST OF WORLD ................................................................................................................... 200

CHAPTER 7. ANNEX. LAUNCH OF NEW PRODUCTS. ....................................................... 203

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THE MAIN CONCLUSIONS After the analysis of the world germanium market the following conclusions can be made concerning the results of its development: There are two possible variants of the market development: basic scenario and conservative

scenario. Basic scenario envisages the annual average growth of the global germanium production in the amount of +1.72% a year, while the conservative scenario does not envisage any market growth at all.

In our understanding, the current crisis processes in the world economy are unlikely to produce any negative impact on the germanium market. We should not expect that recession in certain economies will curb the demand/supply in germanium and its derivatives.

Both under basic and conservative market development scenarios, in the future the global prices on Ge and its derivatives are likely to inch up in the amount of PPI inflation index. Also, +/- 20% annual seasonal fluctuations in the demand in Ge and its derivatives will be observed.

In the future we are going to see the ultimate fields of Ge applications expanding, but we should not expect serious changes that may lead to substantial redistribution of the market.

We should also expect tougher competition between Ge and other substitute materials in the fields of ultimate application. But these changes will be local and are not going to bring about substantial demand in Ge consumption.

Sanctions imposed against Russian Federation are not going produce any significant impact on the domestic germanium market.

From the point of Porter 5 forces model, the market is going to shift to the side of producers and their impact. Partially, it happens, because the resource is limited, the market structure is oligopolistic and there are a great number of consumer companies in various industries.

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CHAPTER 1. GENERAL REVIEW OF THE INDUSTRY.

1.1. HISTORIC, PRESENT AND ESTIMATED CORRELATION OF GLOBAL GERMANIUM DEMAND AND SUPPLY.

GENERAL DATA ABOUT GERMANIUM (GE) Germanium is a chemical element with symbol Ge and atomic number 32. It is a lustrous, hard, grayish-white metalloid in the carbon group, chemically similar to its group neighbors tin and silicon. Purified germanium (Ge 99.9999%) is a semiconductor, with an appearance most similar to elemental silicon. Like silicon, germanium naturally reacts and forms complexes with oxygen in nature. But, unlike silicon, it is too reactive and is found in the Earth crust only in compounds. Due to its low content in the crust of Earth and geochemical resemblance to a number of wide-spread elements, Germanium demonstrates limited ability to produce the minerals of its own, penetrating to the crystalline grid of other minerals. That is why native germanium minerals occur very seldom. Almost all of them are sulfosalts: germanite Cu2 (Cu, Fe, Ge, Zn)2 (S, As)4 (6 - 10% Ge), argyrodite Ag8GeS6 (3,6 - 7% Ge), canfeldite Ag8 (Sn, Ge) S6 (up to 2% Ge), and other rare minerals (ultrabasite, ranerite, franckeite). At room temperature germanium is proof against the action of air, water, alkali solutions, low-concentration hydrochloric and vitriol acids. At the same time it is easily soluble in aqua regia and alkali solution of hydrogen peroxide. It is slowly oxidized by azotic acid. GERMANIUM PRODUCTION. The main mass of Germanium is dispersed in the crust of Earth in a great number of rocks and minerals. For instance, in some sphalerites its concentration is several kg per ton. In enargites it is up to 5 kg/t, in pyrargyrite it is up to 10 kg/t, in sulvanite and franckeite its concentration is up to 1 kg/t, hundreds and dozens of g/t in other sulfides and silicates. Germanium occurs in the deposits of many minerals, in iron ores, in some oxide minerals (chromite, magnetite, rutile, etc.) in granites, diabases and basalts. Besides, germanium is present in almost all silicates, in certain fields of coal and oil. There is a substantial amount of Ge in zinc, lead, copper-zinc ores (as isomorphic impurities) and minerals (in the form of intergrowth of Ge-minerals in concentrating minerals). Such dispersion of Ge is explained by the fact that it can behave both like chalcophilic, lithophilic and siderophile element. In industry germanium is mainly obtained from the side products of non-ferrous ores products (zinc blende, zinc-copper-lead polymetal concentrates. As a raw they also use ash from coal combustion (the method is typical of Russia and China), gasifiers dust and coke plants waste. The cost of germanium is a driven power for its production from by-products and waste of other industries. The share of Ge recovered from scrap has already reached 30–40 % and will keep on growing stimulated by the Waste Electrical and Electronic Equipment Directive (WEEE Directive).

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THE MAIN STAGES OF PRODUCING GE AND GE CONTAINING PRODUCTS. They take germanium containing sulfide zinc or lead ores or coals, in which germanium is present within the range from thousandths to hundredths of a percent, to successively receive: Ge concentrate (from 5 to 30 % Ge), germanium tetrachloride (GeCl4), its oxide, poly and monocrystals. The by-products of this technological chain include goods of various applications. Figure 1.1. The main stages of general production of Ge and Ge containing products1.

GeCl4 is used as a component for production of glass in optical fiber equipment (fiber optic communication line). GeO2 with the purity of up to 99,999% is used in catalysts for polymerization of PET plastics (Poly Ethylene Terephalate resins). BGO (Bi14Ge3O12) is applied in the production of crystals for scintillation detectors of high-energy photons. Poly and monocrystal windows and lens, produced from Ge monocrystals grown by Czochralski method, are applied in night infrared imaging. Semi-conducting properties of germanium are applied in electric devices and solar inverters, as well as Si-Ge compounds. To some extent it is applied in the production of luminous colors, metallurgy and medicine. Thus, there are several germanium markets: its dioxide of various purity for various applications, tetrachloride, zone-refined polycrystalline ingots, monocrystals, optical blanks and substrates. PRODUCTION OF GE DURING SULFIDE ORES CONVERSION. A wide-spread method of germanium production is based on simultaneous extraction of germanium from sulfide zinc, lead-zinc and sometimes copper-inc ores. During hydrometallurgy method of zinc ore production, Ge remains in dump leaching cakes of zinc calcine. During the production of lead, Ge is simultaneously received from sublimates during slag fuming. During the production of copper, Ge is extracted from the dust of mine and reverberatory melting, dust of converters and sublimates during slag fuming.

1 Source: Analysis of Euroresearch and Consulting working group.

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For example, during oxidizing roasting, germanium is oxidized to GeO2, which reacts with the oxides of the calcine and concentrate, producing germanites and silicon germanites, and remains in the calcine. The latter is leached with sulfuric acid and Ge is dissolved. After solution neutralization, germanium remains in the cake, which is subjected to waeltz - reduction roasting. Waeltz oxide (in which germanium may be contained with indium, thallium, cadmium, etc) is subjected again to acid leaching and then treated with CaO (MgO) to precipitate and concentrate germanium. PRODUCTION OF GE DURING COAL COMBUSTION. During industrial coals combustion their mineral components are distributed between slag, remaining in the combustion chamber, and fly ash (ash carryover), carried along by the combustion gases. Practically all germanium (from 70 to 95% depending on the combustion mode) contained in coal turns into gaseous germanium monoxide and then, as long as the combustion product cools down, it condensates on fly-ash in the form of GeO2, germanites and silicon germanites. The principal amount of Ge precipitates on the particles of ash, which should be caught, to the maximal extent possible, in filters and electrical filters. In any case, the concentrates are further treated with hydrochloric acid or chlorine, followed by distilling off germanium tetrachloride from hydrochloric acid solutions and its refining distillation, GeCl4 hydrolysis for production of GeO2 and GeO2 hydrogen reduction, if it is necessary to obtain "metal Ge". The obtained Ge globule is subjected to zone refining. GLOBAL GERMANIUM PRODUCTION. Rare earth elements including germanium belong to the types of mineral raw having strategic importance for the industrialized nations of the world community. In 1990 the total resources of germanium as a chemical element contained in zinc deposits were assessed at 120 thousand tons, and in coals at 4.5 thousand tons. Semi-industrial production of Germanium dioxide was started by Eagle-Picher (the USA) approximately in 1941, and in 1948 the production of GeO2 in the world reached 460 kg. After that the production of Ge in the world was ever growing. The ups and downs of hopes on the growth of mono germanium production in 1995-2000 were related to the projects of global satellite telephone communication like Iridium, Inmarsart or ISO Global. They envisaged launching to the orbit a great number of satellites with strong on-board power. Thus, for instance, one PAS-5 satellite constructed by Hughes Space and Communication Co. to this end required 15 thousand GaAs double-layer batteries with the efficiency of 21.6% on Ge substrate with the diameter of 100 mm. It was calculated that the first stage of implementation of Iridium project would require 18 tons of Ge monocrystals of perfect structure. While they were expecting orders, the producers started collecting material, which prompted the growth of prices on the market, which is in fact rather small. Iridium system was launched in 2001, but in a limited scope. Currently, the growth of this sector is supported by the development of satellite television and high-speed Internet. GLOBAL GERMANIUM MARKET.

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The global germanium market is extremely dynamic and changing. The supplies of germanium largely depend on zinc mining industry, while the demand in the mineral varies depending on changes in the branches of industry and its final consumption. China is a recognized leader in germanium production and consumption. There are several big companies producing germanium raw on its territory:

• Yunnan Chihong Zn & Ge Co., up to 40 tons a year • China Germanium Co., Ltd., up to 40 tons a year • Tongli Germanium Co., Ltd., up to 10 tons a year

In China there are ore fields, at which the production of germanium is possible. The fields are mainly located in: brown coal mines near Lincang, Yunnan Province; coal mines near Xilinhaote, Inner Mongolia Province.

The total amount of the reserves is 3500 tons and the potential reserves are 9600 tons. The deposits of Germanium in the Yunnan province make up 33.77% of all reserves in China. Today, most of the Chinese germanium and its products are exported to the USA, Germany and Japan. America is a major exporting market of the Chinese germanium. 60% of germanium varieties exported from China consists of germanium dioxide. Most of it is exported to Japan. In 2011-2013 polycrystal zone-refined germanium was playing a substantial part in the export structure. Yet, its role diminished during the last years giving way to other varieties of germanium. Table 1.2. Global production of the natural* germanium across the countries of the world in 2013-2014, in tons2.

2013 2014 The USA 4,7 4,8

China 105 110 Russia ~ 3** ~ 3**

Other countries 43 40 Total 158 160

The general analysis of the germanium market in China shows that in 2014 the total amount of natural Ge was just 110 tons (without its secondary conversion) including 31.4 tons or 28.5% for domestic consumption. The amount of export is 78.6 tons or 71.5%. The experts of Asian Metal agency predict that in the future, in 2015, the export of germanium from China is going to rise by 5.4% and reach 82.8

2 Source: Assessment of Euroresearch and Consulting working group, which used the basic scenario of the future market development, the data of the U.S. Geological Survey, as well as reports of the companies present at the market. * Natural germanium is germanium obtained from germanium ore. Germanium obtained from waste, iron bar, scrap is called a secondary product. ** The assessment can differ from the assessment of other sources.

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tons. As far as inner consumption is concerned, its level is going to increase by 5.1% and reach 33 tons in 2015 and 44.6 tons in 2020.3 Though the USA is rich in germanium reserves, its production output is extremely low, and the country mainly depends on import. In spite of rich germanium reserves, the level of American germanium production makes up ~2.6% of global amount due to limited development of local fields. In the USA the sulfide zinc ores and by-product germanium concentrate is produced at 3 mines. This is Red Dog Mine, Alaska, the biggest zinc mine in the world, Gordonsville in Tennessee and Pend-Orielle in Vermont. In 2004 Economic Geology published data on the content of Ge in the ores of Red Dog Mine, which is 106 g/t. It means that 8 thousand tons of Ge is produced. As a strategically important material, germanium was included in the list of the USA National Defense Strategy (NDS): in 1984 in the amount of 30 thousand tons of zone-refined ingots, in 1987 - 146 thousand kg and in 1991 - 68198 kg. Every year NDS sells, via the Defense Supply Agency, part of its germanium reserves, about 4000-8000 kg a year, at the open market, on the tender basis. These sales are not only a good price indicator for the market participants, but are also an important factor of global prices formation. The general level of germanium consumption (not production) in the EU countries is assessed at 26.6 tons in 2014 and it is predicted to increase with the average growth rates of 2.5% till the level of 31.03 tons in 2020. Among the principal consumers of germanium in Europe there is France with 22.76%, Germany with 18.71% and England with 14.4%. In its turn Russia occupies the 4th position with 9.7% or 2 577 kg of Ge. Yet, the Russian market of germanium consumption ranks 1st in the EU in terms of growth: the level of consumption grows with the average rate of 3.3% up to the level o 3.2 tons in 2020. In Russia all industrial reserves are concentrated in three principal regions: Maritime Territory, Sakhalin and Chita regions. The largest explored reserves of Ge in the coals of Russia include: Pavlovskoye Field (Maritime Territory) - the content of Ge is 300 g/t, Tarbagatay (Buryatia) - 72 g/t, Novikovskoye (Sakhalin) -200-350 g/t, Shkotovskoye (Maritime Territory) has extremely high content of Ge, but the reserves are

located on the depth of 500m under Peter the Great Bay in the Sea of Japan. Practically all natural germanium in Russia is produced from Pavlovskoye Field. The other deposits of germanium are currently not developed or their use is low.4 The USSR developed two technologies of germanium production: from over-resin waters of coke plants and the ashes of Ge-containing coals. In the first variant, they make use of the property of tannin to connect even the smallest amounts of germanium. The first domestic GeО2 was developed in 1941.

3 Note: The forecast is made within the basic scenario of the market development. 4 Source: Analysis of Euroresearch and Consulting working group, data of on-depth interviews.

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After that they started using the second method. The chain of Ge production was geographically dispersed. The coal produced at Novikovskoye and Tarbagatay fields was burnt at Chita TPP-2, where the ash was caught. Then it was moved to the Urals, to Mednogorsk Copper and Sulphur Combined Works or to Uzbekistan to Angren Chemical and Metallurgy Works, where the enriched concentrate was produced, which was processed at Germanium state enterprise in Krasnoyarsk (from 1961 through 1998, Krasnoyarsk Plant of Non-Ferrous Metals) or at Zaporozhie Titan and Magnesium Combined Works. These enterprises produced zone-refined germanium-, its dioxide, mono and polycrystals of optical blanks, etc. After the collapse of the USSR there was no production of germanium from 1994 to 2001. In Russia there are two major germanium producers: OJSC "Germanium" and Germanium & Applications LLC. As far as OJSC "Germanium" is concerned, the company makes part of 5 biggest enterprises in the world. It produces secondary germanium, processes waste and purchases raw all over the world (for instance, it buys scrap, mineral waste in Finland)5… The market experts assessed the level of secondary germanium production at ~7.5-8 tons in 2013. Thus, practically all natural raw in Russia is produced by Germanium & Applications LLC, which uses the ores of Pavlovskoye Field (up to 2.5-3 tons in 2013)6. The export from the RF is carried out only by two companies: OJSC "Germanium" and Germanium & Applications LLC. The total amount of export is assessed at ~600 kg a month or ~7200 kg a year, which is equal to 17 million USD a year (including germanium products in various forms). This figure includes a high level of secondary Ge production. The share of the USA in the Russian export is assessed at ~60%. But, ultimately it is higher, as indirect trade flows go through Israel and Singapore to the USA. As a result, we receive even 85%, which makes the American market very important. The second position in the Russian export is occupied by the UK and the third one by South Korea. The analysis of the possible impact of sanctions on the export of Russian germanium is provided in clause 1.6. It should be noted that before 2013 the share of export in the sales of Germanium & Applications LLC was 92%. Starting 2013, the company has experienced the growth of Russian consumption. During the last two years the growth of domestic consumption amounted to 40%. OJSC "Germanium" has a similar situation. Besides these two companies, Russian market has no other Germanium producers. Yet, there are various dealers. The probability of emergence of new Ge producers in the RF is assessed by the experts as low. As far as the import is concerned, only little amount of ready-made germanium is imported, mainly as a substrate for photovoltaic devices or Ge-crystals for production of various sensors. Among the consumers we should point to Saturn (Krasnodar) and Quant (Moscow), various R&D institutes in Russia. There is no serious import of ready-made products. Yet, there is a substantial import for the producers of secondary Germanium (for instance, for OJSC "Germanium").

5Note: Ge received by secondary processes is not included in the U.S. Geological Survey. 6Source: Analysis of Euroresearch and Consulting working group.

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Diagram № 1.3. Global germanium production in 2000-2012, in tons7.

Diagram № 1.4. The forecast of the global germanium production for 2013-2012, basic and conservative scenarios8.

In compliance with the conservative scenario of the industry development, the global level of germanium production is likely to remain unchanged during the next 6 years, staying on the level of ~ 205 tons (natural and secondary Ge). In compliance with the basic scenario, the level of germanium production is going to grow up to 235 tons before 2020 (of which the natural germanium accounts for

7 Source: Analysis of Euroresearch and Consulting working group, U.S. Geological Survey, series of on-depth interviews. Notе: There are many various approaches to defining GE market. In this research we use the statistics of U.S. Geological Survey and Global Industry Analysts, Inc. We evaluate the global market of secondary germanium production at 32.5%. 8 Source: Analysis of the working group, U.S. Geological Survey, series of on-depth interviews.

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177.6 tons). The further analysis of separate world markets is supplied in Chapter 6. The data of Global Industry Analysts Inc. correspond to the basic scenario of germanium global consumption market. The expected consumption level in various sectors of ultimate use (application) will bring about the market expansion. We should also note that the share of secondary germanium produced from recycled or used products, including metal bar/ scrap, will be growing during the next decade.

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1.2. ANALYSIS OF PRICES ON GERMANIUM In late 1990s Germanium was one of the first electronic equipment material, which experienced the ups and downs in the amount of production and prices. After that it was followed by gallium, indium, selenium, tellurium, etc. The market optimism reached its peak in 1995-1999, then it was a long decline in the interest, when the market was depressive. From 1945 to 1949 the global production of germanium amounted to several hundred kg a year, while the prices were very high. In 1950s, when the germanium transistors appeared, the production was growing by priority rates, the prices started dropping and reached their minimal level in 1966, which was 175 USD/kg. In early 1980s the prices rise was explained by new growth in the demand in germanium in various industries: infrared equipment, production of catalyst agents, and in the second half of 1990s in optical fiber equipment and solar elements for the satellites. In 1996-1998 the prices reached their maximal level (Ge - up to 2000 USD/kg, GeO2 - 1200 USD/kg. Two markets were highly ranked at that time: optical fiber transmission systems, where GeCl4 is necessary and satellite telephone communication, which requires a great number of Ge substrates for satellites on-board power. Further events demonstrated that both markets were overestimated and in 2002-2003 the prices collapsed to 400 USD/kg. After that a long period of their recovery began. Diagram № 1.5. Historical changes of the global average prices on Ge in 1959–20059

2008-2009

9Source: Analysis of the working group, * The average prices on Ge is the average cost of Ge in various forms. US Geological Survey Publications // http://minerals.usgs. gov., Germanium // Mineral Commodity Summaries. U.S. Bureau of Mines Bull. 1995., Gallium, germanium and indium // United States Mineral Resources: Professional Paper. 2004. № 820., Historical Statistics for Mineral Commodities in the United States: Open File Report OF-01-006. Vers. 6.4. 2003.

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The decline of the world economy started in 2008 and continued through 2009. The market prices on germanium were falling throughout the entire 2009 due to low global consumption. The free market price for germanium dioxide published by Metal-Pages was 920 USD/kg in the beginning of the year and fell by 37% to reach 580 USD by the end of the year. Free market price for metal germanium was 1425 USD/kg in the beginning of the year and fell by 34% to reach 940 USD by late 2009.

2010 Almost every year starting 2000, the average price on metal germanium fluctuated within the range of over 20% above or below the level of the previous year. In 2010 free market price for germanium dioxide published by Metal-Pages was 580 USD/kg in the beginning of the year and rose by 24% to reach 720 USD by the end of the year. Free market price for metal germanium was 940 USD/kg in the beginning of the year and rose by 28% to reach 940 USD by the end of the year. Factors, which contributed to higher prices on dioxide germanium, included export tax for 2010 for germanium dioxide produced in China and exported to the global markets as well as shut-down of the Chinese dioxide germanium plant due to environmental problems in early 2011. The Chinese government tries to limit the export of raw and promote the export of a great number of ready-made products, such as germanium ingots an optical lens by restoring taxes on these products. In response to growth of prices on germanium dioxide, some domestic germanium consumers found it more profitable to buy germanium in pure metal form rather than oxide. The prices growth was also stimulated by the decision of the Chinese government as of 2011 to include germanium in strategic reserves of rare metals, which potentially decreased the amount of delivery. 2011 The prices kept on rising through the first half of 2011. Free price on germanium dioxide in 2011 published by Metal-Pages was 720 USD/kg and more than doubled by June to reach 1450 USD. The rise in prices was related to a combination of factors including export tax, plant shut-down and limitation of potential reserves in China. By the end of the year prices on germanium dioxide fell to 1250 USD. Free market price for metal germanium was 1250 USD/kg in the beginning of the year and rose to 1650 USD in the second quarter of 2011 and reached 1450 USD/kg by the end of the year. At the end of the year the germanium in oxides was more expensive than its metal form.

2012 In the beginning of 2012 the price on germanium dioxide was 1250 USD and dropped almost to 900 USD by the spring of 2012 to reach 1360 USD/kg at the end of the year. The prices on metal and dioxide germanium experienced a sharp rise in the third quarter and remained on high level throughout the entire fourth quarter of 2012. The announcement that China is going to buy germanium for its national reserves brought about the rise in prices and decline in the production levels of three principal Chinese manufacturers, which referred to the environmental policy of the government.

2013

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Prices on germanium dioxide were relatively stable within the first three quarters of 2013 remaining close to the level of 2010 and being almost twice higher than the level of 2010. In the beginning of the year the price for metal germanium was 1640 USD/kg, in May it grew up to 1800 USD, while in late September it was already 1875 USD. During the current price level, some producers found the metal Germanic is cheaper than dioxide, due to lower cost per unit. This, as well as the policy in respect of the Chinese national reserves, must have led to higher prices on germanium. In the future under both scenarios of the market development the prices on Ge will be growing in the amount of PPI inflation index. Thus, almost every year there will be a seasonal +/- 20% fluctuation in the demand in Ge and its derivatives.

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Diagram 1.6. Dynamics of prices on Ge Metal FOB China USD/kg from 01.2004 through 09.201410.

10 Source: data according to the quotations of Bloomberg.com * Hereinafter FOB - (Free On Board — international trade Incoterms term used for definition of the party, which has to pay transport expenses and /or definition of the liability for the cargo during its transfer from Buyer to Seller . FOB means that the "the cargo is shipped on the vessel of the customer". Indication s on FOB conditions in the contract mean that the seller shall pay for the delivery of goods till the moment of shipment plus the shipment on the board itself. It is also responsible for clearing the goods from fees (during export delivery). The Buyers shall pay for the transportation, insurance, expenses for unloading and delivery to the point of destination. The transfer of risks is going on at the moment, when the cargo crosses the board of the vessel.

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Diagram 1.7. The dynamics of prices on Ge Metal FOB China USD/kg with 01.2004 through 12.2017 with the forecast11.

11 Source: data according to the quotations of Bloomberg.com

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Diagram 1.8. The dynamics of prices on Ge Metal Russia FOB USD/kg from 09.2012 through 09.201412.


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Diagram 1.9. The dynamics of prices on Ge Metal Russia FOB USD/kg from 09.2012 through 09.2019 with the forecast13.


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Diagram 1.10. The dynamics of prices on Ge Metal Europe USD/kg from 12.2005 through 09.201414.


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Diagram 1.11. The dynamics of prices on Ge Metal Europe USD/kg from 01.2006 through 09.2019 with the forecast 15.


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Diagram 1.12. The dynamics of prices on Ge Metal US USD/kg from 07.2009 through 09.201416.


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Diagram 1.13. The dynamics of prices on Ge Metal US USD/kg from 01.2010 through 09.2019 with the forecast 17.


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Diagram 1.14. The dynamics on prices on GeO2 China FOB USD/kg from 01.20014 through 09.201418.


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Diagram 1.15. The dynamics of prices on GeO2 China FOB USD/kg from 01.2004 through 12.2017 with the forecast 19.


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Diagram 1.16. The dynamics of prices on GeO2 Russia FOB USD/kg from 09.2012 through 09.201420.


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Diagram 1.17. The dynamics of prices on GeO2 Russia FOB USD/kg from 09.2014 through 12.2019 with the forecast21.


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Diagram 1.18. The dynamics of prices on GeO2 US USD/kg from 07.2009 through 09.201422.


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Diagram 1.19. The dynamics of prices on GeO2 US USD/kg from 07.2009 through 09.2019 with the forecast 23.


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Table 1.20. The forecast of the average global prices on germanium and its derivatives in 2013-2023 in USD/kg24.

Title/Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

GeO2 1 290 1 342 1 395 1 451 1 509 1 569 1 632 1 698 1 765 1 836 1 910

Ge Metal 1 900 1 976 2 055 2 137 2 223 2 312 2 404 2 500 2 600 2 704 2 812

24 Analysis of Euroresearch and Consulting working group, data of on-depth interviews. 2014-2023- forecasts.

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1.3. GENERAL SIZE OF THE MARKET AND PRINCIPAL SEGMENTS OF GERMANIUM CONSUMPTION AND GERMANIUM CONTAINING PRODUCTS. Germanium and its compounds are applied in high-tech fields of industry, technology and medicine. It is used for the production of diodes, triodes, crystal detectors and power rectifiers. Monocrystalline germanium is also applied in health-monitoring instruments and instruments measuring the voltage of static and alternating magnetic fields. Optics made of germanium is applied in night vision devices. It is used to produce substrates for photoelectric converters applied in sun batteries. In light equipment the germanium is used as a reagent for the production of luminous colors, in chemical industry it is applied as a catalyst, in metallurgy it serves for the production of special alloys, in medicine it makes part of bioactive supplements and anticancer drugs. Many alloys including germanium, GeO2 glass types and other germanium compounds are also suitable for practical application. Before 1970s, the principal field of germanium application was electronics (diodes and transistors from spacious germanium monocrystals), which occupied up to 80% of total Ge consumption. Then, a priority was given to silicon and by 1986 the share of germanium in electronics shrank to 3%. Yet, for many years the principal field of its application was infrared equipment, especially in the military sector. After the end of the "cold war" this segment started shrinking. Table 1.20. Global demand in germanium across the principal consumption segments, in millions of USD, 2000-200925.

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Polymerization catalysts 17,4 14,2 12,6 11,1 15,1 18,5 27,6 30 32,4 28,9 Communications 3,4 2,8 2,6 1,7 2,7 3 6,7 4,1 5,5 5,3 Electronic components 22,8 17,8 17 16,4 18,9 21,6 30,3 28,8 29,6 31,7 Fiber optics 52 37 34,3 33,2 36,4 51,2 56 63,5 60,6 56,9 Infrared optics 28,5 25,4 26,3 24,9 38,5 44,1 60,4 93,3 90,4 75,8 Sun energy 5,9 5,6 5 4,4 8,3 11,4 21,8 42,6 58,1 49 Other 32,7 25,8 22 18,7 21,4 26,1 38,4 47,5 55,7 34,4

Total 162,7 128,6 119,8 110,4 141,3 175,9 241,2 309,8 332,3 296,6

25Source: Analysis of Euroresearch and Consulting working group, data of Dedalus Consulting, http://www.dedalusconsulting.com/

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Table 1.21. Global demand in germanium across the principal consumption segments, in millions of USD, 2010-201826

2010 2011 2012 2013 2014 2015 2016 2017 2018 Polymerization catalysts 36 38,6 40,2 44,5 48,5 52 52,2 57,2 63,3 Communications 8,1 7,2 7,7 9,2 10,2 11,5 12,4 13,5 15,2 Electronic components 33,4 37,9 43,2 50,4 59,1 66,7 70,1 68,9 75,4 Fiber optics 60 68,9 76,8 91,1 107,6 116,8 121,4 124,2 137,7 Infrared optics 75,2 84,4 96 113,9 138,1 153,4 158,4 184,1 207,9 Sun energy 57,3 70,2 84,3 106,6 128 151,2 153 138,7 161,6 Other 50,6 56 63,5 75,2 91 101,2 96,7 96,7 105,9

Total 320,6 363,2 411,7 490,9 582,5 652,8 664,2 683,3 767 Table 1.22. Global demand in germanium across the principal consumption segments, in millions of conventional units*, 2000-200927.

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Polymerization catalysts 21312 20492 21023 23137 26871 28556 34844 36167 37800 36214

Communications 3928 4044 4213 4587 5289 5644 6764 7058 7423 7651 Electronic components 21160 21008 23340 28335 28779 29759 33548 34141 34779 33721 Fiber optics 64089 55694 59648 62988 67271 70971 74861 79553 84889 8954 Infrared optics 29795 35616 45663 57683 78135 90053 100935 109903 112978 110220 Sun energy 7296 12701 17167 28347 38260 35676 34504 40220 43055 53824 Other 39533 38632 43171 47416 50262 53724 55499 57940 61694 63341

Total 187113 188187 214225 252493 294867 314383 340955 364982 382618 313925

Table 1.23. Global demand in germanium across the principal consumption segments, in millions of units, 2010-201828.

2010 2011 2012 2013 2014 2015 2016 2017 2018 Polymerization catalysts 39140 42146 45173 47797 51291 54535 58827 64032 69794

Communications 8306 9056 9887 10715 11660 12693 13854 15098 16502 Electronic components 35195 38120 41550 45158 49276 53727 57653 62987 69225

Fiber optics 95523 101296 108354 115665 12424 132971 141869 152328 16339 Infrared optics 121362 127347 133762 141154 148974 155662 163223 170564 180123 Sun energy 55903 64214 72985 82666 93269 108557 121186 137269 154856 Other 67987 73347 78788 85420 87154 97123 103174 109281 115829

Total 423416 455526 490499 528575 454048 615268 659786 711559 622668

26 Source: Analysis of Euroresearch and Consulting working group, data of Dedalus Consulting, http://www.dedalusconsulting.com/. It corresponds to the basis scenario of the industry development. 27 Analysis of Euroresearch and Consulting working group, data of Dedalus Consulting, http://www.dedalusconsulting.com/ Note: * Hereinafter we use the system of analysis and comparison in conventional units developed by Dedalus Consulting. 28 Analysis of Euroresearch and Consulting working group, data of Dedalus Consulting, http://www.dedalusconsulting.com/. It corresponds to the basis scenario of the industry development.

http://www.dedalusconsulting.com/


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POLYMERIZATION CATALYSTS. GeO2 is applied as a polymerization catalyst on the last stage of polymerization of PET, a wide-spread plastic applied for the production of bottles, cover-up, packing for food products and many other things. GeO2 was applied in Japan to this end for many years. The USA considered GeO2 too expensive and applied Sb2O3 or antimony triacetate (Sb(CH2COO)3) instead of it. Only in 1997 the US Geological Service adopted a separate statistical column for the use of GeO2 as a catalyst. Before that it fell under the category "miscellaneous goals". The researches are currently held to check out the use of germanium compounds as catalysts for fluorination of various hydrocarbons. The customers are especially interested in the production of HFC, environmentally friendly cooling substances, which replaced CFC. The synthesis simulated by Germanium, occurs at lower temperature and pressure than it happens under current conversion conditions, is likely to reveal energy saving and highly selective properties. The synthesis of by-products is reduced to the minimum. COMMUNICATION SYSTEMS. The industry of communication systems may be divided on a provisional basis on two sectors: wired and wireless. As far as wired communication systems are concerned, they will be discussed later. In its turn, during the last years, the global market of wireless equipment (including 4G, Wimax, WLAN, etc.) was growing with the average annual rate of 7-8% in monetary terms. In the future it will continue its development due to the following factors: - Higher rates of installing equipment on such markets as China, India and South America. - Decline in demand on the outdated 2G and 3G equipment and infrastructure, which currently makes a substantial part of the global demand. - The growth and distribution of the demand in 4G equipment, which currently makes 10% of the entire market. ELECTRONIC COMPONENTS Electronic components play an important part in evolution of innovative technologies, which changed the world in the 21 century, including telephones and computers, which radically changed the sphere of communications and information technologies, reciprocally. Germanium is applied for the production of electronic devices due to its semiconducting properties. It became the first semiconductor, which proved its commercial efficiency. Most of transistors and diodes applied in the early XXI century were manufactured of silicon. This was explained by easy manufacturing, better thermal properties and higher maximal working temperature of such devices (150° C and 100° C, reciprocally), as compared to their analogues from germanium. Though the germanium diodes are not that efficient as silicon ones, in some schemes they are more preferable, as they start conducting under low voltage (from 0.2 to 0.3 volts (V), as compared to 0.6 V).

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During the last years the interest to germanium as a material for electronic devices has revived due to the development of successful methods of growing superfine epitaxial layers of germanium on silicon substrate. At the moment, microscopic bipolar impulse transistors containing silicon and germanium, make part of telephone, computer and laser chips. Such transistors work five times faster than silicon ones and two times faster than high-speed transistors of indium phosphate. Besides, they consume substantially less power than standard transistors. Chips with silicon and germanium alloy are believed to ideally suite broadband pocket communication devices and processors of electric signal related to fiber optic cables. Monocrystalline germanium is also used as a substrate for epitaxial deposits for gallium arsenide (GaAs) and gallium arsenide phosphide applied in light diodes, laser diodes and photo electric sun elements. The use of germanium as a component of light diodes shrank, as in many branches of industry they were replaced by liquid crystal diodes. FIBER OPTICS Fiber optics is a flexible transparent fiber made of pressurized glass and plastic, which is used in many devices due to various advantageous properties. The transfer of such data via photons is not related to such problems as electromagnetic interferences and noises in schemes that are located close to each other. Most part of the used optical fiber is used in broadband internet and telecommunication access, O&G industry, networks with private data. The core of optical fibers consists of SiO2 + GeO2 providing for full inner reflection on the shared boundary and low loss of energy on the wavelengths in 1.3 and 1.55 microns. SiO2 + GeO2 compound is received by precipitation of gaseous mixture of oxygen with SiCl4 + GeCl4 compound. In general, the optical fiber transmission system was rapidly developing from 1998 through 2001 and rose by 350% during that period. Yet, the prospects of fiber optics consumption growth were overestimated, which later brought about a certain decline. Telecommunications and broadband access to the Internet will be a great part of the global market of optical fiber and will stimulate its worldwide demand. The developing regions of the Asian-Pacific Rim, Latin America, Western and Eastern Europe experience a surge in these technologies. Medical fiber optics is a new ultimate germanium consumption market. During the last two years the world medical industry experienced a shift towards the use of electronic components and designs, which have already changed the sphere of telecommunications and segments of consumer electronics. One of the reasons of this continuing trend is the growing demand in portable, miniature and similar devices, capable of performing surgical and diagnostics operations. Besides, the key demographic trends such as the growth in the number of population and senior citizens all over the world require higher quality of medical aid. In this context, medical professionals increasingly frequently address modern patient monitoring methods, for instance, biomedical devices, for effective diagnostics, monitoring and treatment procedures. This necessity promoted to the forefront the growing popularity of fiber optical technologies in medical devices for the efficient diagnostics,

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monitoring and treatment. Due to its physical properties, the optical fiber technology becomes an integral part of medical devices production segment. Due to its characteristics, the optical fiber is used in such sectors as heart and intensive therapy, ophthalmology, gastroenterology, dermatology, neurology, angiology, oncology, dental solutions, surgery and orthopedics. INFRARED OPTICS. The ability of materials of oxide germanium and metal germanium to transfer radiation, close to infrared spectrum, in the range of 1600-18000 nm, has been for long applied in the night vision systems. Germanium is easily processed in infrared windows and lens. Its high refracting factor and low chromatic dispersion allows using simple, sometimes not corrected lens in infrared systems. In addition, germanium is mechanically firm, sound and has good thermal conductivity. These are valuable properties for reflecting devices, most of which are developed for military targets and security surveillance systems. The abovementioned passive devices or thermal cameras are sometimes called front imaging thermal systems (FITS). FITS devices produce an image by detecting temperature contrasts between the object and its environment. They are operational in full darkness. Smoke and fog are not an obstacle for them. FITS military systems based on germanium are used in night vision devices such as glasses, binoculars, gunsights, surveillance cameras and missiles with infrared (thermal) guidance heads. Its properties are also used for civil objectives such as detection of bearings overheating, fire extinguishing during intense fumigation, search for tourists lost in the wilderness, monitoring the temperature of stones in the mines, satellite maps, medical diagnostics, detection of mistakes in structural materials. New non-military applications include promising driving navigation systems for the conditions of poor visibility. Germanium is also applied in the lens of infrared lasers, especially in industrially important CO2 lasers applied for cutting, drilling and welding materials. The experts point out that the peak of consumption coincides with active military activities. On the other part the consumption decreases after the end of military campaigns in Iraq and Afghanistan and antiterrorist operations in various parts of the world. During most of the 80s the military demand stimulated the growth of germanium consumption, but after 1989, the consumption slumped and reached 3-4 tons in late 90s. The civil market of night vision cameras and other devices compensates for the decline in demand by military sector. According to the latest available data, in 2013 the sales at the market of infrared thermal cameras were about 7 bn USD. The military and other governmental units occupied about 85% of this market, while the commercial devices provided for the rest 15%. SOLAR ENERGY. In 2012 the world market of alternative solar technologies was assessed at 12.6 bn USD. By late 2018 this market is predicted to exceed 22.8 bn USD with the average growth rate of 10.5% during five years.

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Germanium sun batteries are used in space and earth systems. The demand in satellites was on a rise during the last years due to commercial, military and scientific application. It was found that almost 400 000 germanium substrates were applied in space industry every year and most of the satellites were empowered by sun batteries using germanium. Germanium substrates are smaller and lighter and are more efficient in converting light into energy. On the output they are more powerful than the most wide-spread alternative wafers produced of silicon. Germanium wafers are included in the construction units of multilayer (often referred to as multi-junction) sun batteries. Super fines layers, combining such materials as gallium, indium, phosphide and gallium arsenide are located on the surface of germanium wafers. Each of them catches a certain aspect of the sun spectrum and turns it into electricity. The efficiency of sun energy conversion by multi-junction batteries usually exceeds 25%. At the moment three-junction batteries are the most wide-spread ones. Yet, technological developments allowed including more layers and transitions in one battery and increasing its production capacity. Multi-junction sun batteries using germanium wafers and germanium layers are usually more expensive in production than other technologies, such as cadmium telluride, polycrystalline silicon, thin-film wafers of diselenide of copper / indium / gallium, but they are evidently more efficient in converting sun energy into electricity. Some other producers of germanium wafers, multistage sun batteries and solar systems concentrated their investment and research activity in the development of earth solar market. For instance, Sectorlab Inc. (subsidiary of The Boeing Co.), located in Sylmar, California, started adapting space solar technologies to earth application back in 2001, and managed to convert the concentrated sunlight into electricity with the efficiency of 41.6%29. OTHER. Detection of nuclear radiation Highly purified germanium with low concentration of impurity sites producing deep levels is used for manufacturing detectors of γ-radiation and X-radiation. The principle of the detectors work is based on interaction of radiation with the material of the sensitive section of the detector, where free charge carriers are produced and detected. Monocrystals BGO - Bi14Ge3O12 are also used for registration of X-radiation. They are demanded by nuclear physics, higher energy physics, computerized medial tomography, low-background spectrometry, etc. The leading producers of BGO crystals include Crismatec (France) and Chingha Ceramics Institute (China). In Russia the technology is developed by the Institute of Non-Organic Chemistry at the Siberian Department of the Russian Academy of Science (Novosibirsk). Medicine. Polymers containing Germanium are effective in treating autoimmune diseases. Antitumor activity of organogermanium compounds of 2- carboxyethyl germanium oxide has been applied in medical practice since 1968.

29 Source: Spectrolab Inc., 2010; Umicore s.a., 2010a, p. 52

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Plant and animal breeding Compositions containing germanium enhance the growth of plants. Colloid germanium is added to animal feed. Cosmetics and perfumery. GeO2 complexes with oxide and polycarbonate acids are effective as deodorants. Dioxides and germanates are added to the creams, ointments and lotions. Colloid germanium enhances blood circulation. Luminous colors. Germanate and sodium fluorine germanate are used for the production of luminous colors, while germanium dioxide is applied for the production of luminous colors, activate oxides of barium and zinc. Lightly doped germanium monocrystals are applied in tension sensors. Optics. GeAsSe and GeSbSe compounds are unused for the production of special glasses with required rate of refraction and absorption. Metallurgy As a doping agent, Germanium is used to enhance the firmness and anti-corrosion resistance of Al-Zn-Mg-Cu alloys. Alloys of Ni and Cr containing 28-57 % of Ge are not oxidized in the air and retain high firmness under the temperature of up to 1000 °С. Germanium in the form of undoped monocrystals is applied for manufacture of X-ray monochromators. The reflective capacity of its (111) planes allows receiving monochromators resistant to γ-radiation. Jewellery industry. Germanium is increasingly frequently applied in the alloys of precious metals. For example, it prevents pure silver allows from gradual etching. It also improves some other properties of silver. Pure silver alloy, registered as Argentium trade mark, contains 1.2% of germanium.

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1.4. THE MAIN TRENDS OF GERMANIUM PRODUCTION AND CONSUMPTION. This table represents the principle events at the germanium market. Table 1.24. Retrospective of germanium application in various fields from 1948 through 2000. 30.

WWII Germanium diodes are produced for their use in radar systems. 1948 Diodes, triodes (transistor), optical glass, luminous colors are developed. 1949 Infrared range lens are invented. 1951 Junction transistors are developed. 1953 Semiconducting tetrodes and pentodes are created. 1954 Big industrial rectifiers made of germanium are used. 1957 Germanium transistor was included into the printed circuit. 1960 Germanium tunnel diode was invented.

1965 Polymerization catalysis used on a wide scale in Japan. Germanium is used as a gallium doped monocrystal in detectors of nuclear radiation.

1972 Germanium/platinum catalyst for oil reforming is patented. 1975 Germanium is used in light emitting diodes.

1978 Liquid crystal diodes ouster light diodes. Developments are carried out to use germanium in the production of fiber optics.

1983 Multimode fiber replaced mono-mode ones in fiber optics. 1997 Polymerization catalysis used on a wide scale in the USA.

INDUSTRY NEWS. Germanium Producing Company Founded in Kunming. May 2014. Yunnan Lincang Xinyuan Germanium Industrial Co. Ltd. is the sole leading germanium producing company carrying out its recovery and conversion, integration of R&D efforts into deep conversion practices and owing a germanium production chain in China. This is the only key enterprise of germanium production with a state-run high-tech facility in Yunnan, supported by the Ministry of Science and Technology and the first high-tech enterprise in Yunnan province included in the list of small and medium businesses with A-class shares during the last two years. The company invested resources into the foundation of Kunming Germanium Hi-tech Co. Ltd., and allocated money for implementation of a project on industrialization of high-tech products containing germanium, such as germanium-based optical lens of infrared range, which is carried out by sections B-5-5 and B-5-8 of its high-tech industrial base in Kunming. The cost of the project is 1.83 bn RMB. Its implementation required the area of 155 thousand hectares. After the launch of the project the annual income of the company will be 3.5 bn RMB. with the annual income tax of 1.5 bn RMB.


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The project on industrialization of germanium infrared optical lens and highly efficient solar elements of germanium monocrystal were included into the list of key construction projects of Yunnan Province. The corporation is going to include Yunnan Zhuyie Association project into the industrial chain on germanium production in China and is going to make it the leading enterprise in the field of germanium-based products. Air Liquide Completes a Deal on Acquisition of Voltaix Inc, an American Producer of Electronic Materials. September 2013. This acquisition complements the Air Liquide ALOHA (TM) product line of advanced precursors, and brings together synergies in molecule discovery and scale up, contributing to accelerate the introduction of a broader portfolio of new high-tech materials to semiconductor manufacturers and therefore enabling the increase in computing power and connectivity. Founded in 1986, Voltaix is a manufacturer of materials used in the production of semiconductor devices and advanced solar cells, with expertise and global capabilities in silicon, germanium, and boron chemistries. It operates manufacturing facilities in the U.S. in Branchburg (New Jersey), High Springs (Florida) and Portland (Pennsylvania) and in South Korea in Sejong-si (South Chungcheong Province). The company employs 185 people worldwide. Michael J. Graff, Senior Vice-President Americas and a member of Air Liquide’s Executive Committee, commented: “This acquisition combines the resources and expertise of our two companies and creates synergies and growth opportunities to expand our markets and product offerings for semiconductor manufacturers around the world and to meet the growing consumer demand for increasingly powerful flat screens, tablets and smart phones. We welcome our new employees and look forward to continuing to provide customers with the highest levels of products, services, quality and reliability at the forefront of innovation.” Peter de Neufville, Chairman of Voltaix Board and John de Neufville, Founder and Chairman of Voltaix’s Executive Committee, commented: "We are pleased to know that the legacy of what we have built at Voltaix, as a result of the contributions of so many talented and dedicated individuals, will now continue under the stewardship of Air Liquide, a company similarly committed to innovation and the needs of customers." Air Liquide is the world leader in gases, technologies and services for Industry and Health, and is present in 80 countries with more than 50,000 employees. Oxygen, nitrogen, hydrogen and rare gases have been at the core of Air Liquide’s activities since its creation in 1902. Using these molecules, Air Liquide continuously reinvents its business, anticipating the needs of current and future markets. The Group innovates for the good of society while delivering growth and consistent performance. Innovative technologies that curb polluting emissions, lower industry’s energy use, recover and reuse natural resources or develop the energies of tomorrow, such as hydrogen, biofuels or photovoltaic energy… Oxygen for hospitals, home healthcare, fighting nosocomial infections… Air Liquide combines many products and technologies to develop valuable applications and services not only for its customers, but also for society.

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In 2012 the profits of the Group amounted to 15.3 bn Euro, of which 85% was earned outside France. Air Liquide is entered into the list of Paris Euronext stock exchange (section А), аnd indexes CAC 40 and Dow Jones Euro Stoxx 50. Source: Air Liquide. GigOptix Inks Approves Agreement with IBM. June 2012. GigOptix, Inc, a leading supplier of semiconductor and optical components that enable high speed information streaming, today announced it has signed a license agreement with IBM to leverage IBM's silicon germanium (SiGe) millimeterwave transceiver technology with GigOptix's growing E-band wireless solutions portfolio including its newly released advanced E-band power amplifier. Internet traffic from mobile devices is forecasted to exceed traffic from wired devices by 2016. The ubiquitous use of mobile devices such as smartphones and tablets, coupled with the increased use of cloud enabled services, is forcing network operators to upgrade not only their optical networks to 40Gbps and 100Gbps links but also their wireless networks to higher capacity gigabit and multi-gigabit links to satisfy mobile users' growing demands for data. "We are very excited about the opportunities that IBM's SiGe millimeterwave technology enables," commented Andrea Betti-Berutto, Senior Vice President and Chief Technology Officer of GigOptix. "SiGe enables much lower power, smaller size and much higher levels of integration to the current gallium arsenide (GaAs) solutions in the market." IBM's SiGe technology, which was developed and enabled by contributions from researchers at IBM's Haifa Research Lab in Israel, provides GigOptix with a proven, scalable and highly integrated silicon germanium platform which the company intends to leverage in a number of innovative directions. Leveraging IBM's expertise and many years of development experience provides GigOptix with the opportunity to bring to the market a unique innovative, full suite of technology to enable transforming cost efficient and revolutionary integrated E-band transceiver products. "Coupling IBM's SiGe with GigOptix's millimeterwave packaging and high power GaAs amplifiers will enable the high spectral efficiencies and data rates being demanded by network operators on their wireless mobile backhaul networks," Betti-Berutto added. "We feel that GigOptix is uniquely positioned in the data communication market offering a complete bundled solution for both high speed optical networks and now high speed wireless E-band links." EJL Wireless Research, in its most recent report, forecast E-band point-to-point radio links as being one of the fastest growing segments in the wireless mobile backhaul market. About GigOptix, Inc. GigOptix is a leading fabless supplier of semiconductor and optical components that enable high speed information streaming and address emerging high growth opportunities in the communications, industrial, defense and avionics industries. The Company offers a broad portfolio of Drivers, TIAs and TFPS optical modulators for 40G and 100G fiber-optic telecommunications and data-communications networks as well as high performance MMIC solutions that enable next generation wireless microwave

http://www.gigoptix.com/

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systems up to 90GHz. GigOptix also offers a wide range ASIC solutions represented by ChipX production line. Source: GigOptix, Inc. Indium Acquires New Manufacturing Facility in New York, May 2012. Indium Corporation has acquired a new manufacturing facility, located at 5836 Success Drive, Rome, NY, USA. The plant is currently being outfitted to expand production capacities of Indium Corporation's range of compounds, including indium, gallium, germanium and tin-based materials. The company's expansion addresses its growing global success with supplying materials to industries such as solar photovoltaic, flat panel display, semiconductor, optical fiber, LED, and others. Indium Corporation is installing state-of-the-art manufacturing equipment, processes, and analytical capabilities to address the world's demand for high-performance materials. The enhanced capabilities will enable Indium Corporation to convert a wider range of feed materials into high-purity compounds and provide recycling of customers' reclaim streams. According to Claire Mikolajczak, Indium Corporation's Director of Metals and Compounds, "This major expansion enables us to simultaneously enhance our process efficiencies, product quality, and product range. We will soon be able to deliver a very large share of the world's demand for high quality compounds." Greg Evans, Indium Corporation President, added: "We have committed to our markets that we will raise the bar with regard to capacity, quality, and service. Our new facility addresses each of these issues and even allows us to partner with new customers on their challenging future requirements. We look forward to these new opportunities." The new plant is sized to accommodate future expansion of upstream and downstream processes to improve its costs and performance. Indium Corporation Facilities Engineer, Paul C. Ragusa, CPE, said, "Our 11th plant is Indium Corporation's largest facility in the world. It is designed to address the continuous growth and technical development of the company to suit evolving market needs." Indium Corporation is a premier materials supplier to the global electronics, semiconductor, solar, thin-film, and thermal management markets. Products include solders, blanks and fluxes; brazes; sputter targets; indium, gallium, germanium and tin compounds, and high purity metals and Reactive NanoFoil®. Founded in 1934, Indium Corporation has global technical support and factories located in China, Singapore, South Korea, the United Kingdom, and the USA. Read more detailed information about Indium Corporation at www.indium.com. Umicore to Consolidate Germanium Optics Production in Quapaw. December 2011.

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Umicore announced its intention to consolidate the production of its germanium-based optics products at its facility in Quapaw, Oklahoma. It is anticipated that optics production at the Olen site in Belgium would be phased out during the coming 18 months with all production moving to Quapaw. Umicore has undertaken actions to minimize the impact on its employees at the Olen site. A re-employment plan has been developed in order to secure alternative employment at the Olen site for the 89 fixed-contract workers affected by this move. All temporary workers will be offered alternative employment possibilities elsewhere in Umicore's Belgian operations. In total, 1,033 people are employed by Umicore at the Olen site. The market for optics products, which are used in thermal imaging devices, is based predominantly in the United States. The market has seen a decline in demand over several years and this has made it necessary to reduce capacity and to consolidate production in the site that is closest to Umicore's customer base. Umicore profile. Umicore is a global materials technology group. It focuses on application areas where its expertise in materials science, chemistry and metallurgy makes a real difference. Its activities are centered on four business areas: catalysis, energy materials, performance materials and recycling. Each business area is divided into market-focused business units offering materials and solutions that are at the cutting edge of new technological developments and essential to everyday life. Umicore generates the majority of its revenues and dedicates most of its R&D efforts to clean technologies, such as emission control catalysts, materials for rechargeable batteries and photovoltaics, fuel cells, and recycling. Umicore's overriding goal of sustainable value creation is based on an ambition to develop, produce and recycle materials in a way that fulfils its mission: materials for a better life. The Umicore Group has industrial operations on all continents and serves a global customer base; it generated a turnover of € 9.7 billion (€ 2.0 billion excluding metal) in 2010 and currently employs some 14.400 people. For more information visit www.umicore.com Sparton Energy Signs Memorandum on Understanding with Voltaix. September 2011.

Voltaix, LLC, announced today that they have executed a Memorandum of Understanding (the “MOU”) with Sparton Energy, Inc., for the purchase of all germanium production from the Huajun Mine in Yunnan Province, China. The MOU contemplates an investment by Voltaix of approximately $US4.2 million dollars in a series of advances related to development of the Huajun operations. “We are pleased to have reached this important strategic relationship with Sparton,” said Mark Wilkinson, Executive Vice President of Voltaix. “As the world’s leading germanium producer,

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securing our germanium supply is critical. This relationship allows us to continue to provide our customers with the highest levels of supply chain security by giving Voltaix an exclusive source of significant germanium reserves. This also represents a win for the local workers at Huajun, who will be re-employed once the germanium mining license is granted.” Sparton President, Lee Barker, stated: "Sparton is delighted to establish this unique long term relationship with Voltaix and become a supplier of one of the primary components necessary for its leading edge technology products. Local germanium concentrate prices at Lincang have almost doubled within the past year, and we look forward to resuming production of this specialty metal." General Terms. The MOU contempla tes deliveries of germanium dioxide (GeO2) by Huajun to Voltaix over the life of the Strategic Supply Agreement (the “SSA”). The advances are to be recouped through deliveries of GeO2 pursuant to the SSA. The price for this product is based on a blended formula related to actual conversion and refining costs and local market pricing for GeO2. The advances are to be used for several purposes, including additional safety upgrades and efficiency improvements that will increase production rates. Huajun Operations. The Huajun Mine is in the final stages of having a new mining license issued. At full capacity, the mine employs approximately 400 people. The mine has completed all necessary safety and security upgrades to meet new Chinese regulatory requirements and reactivation of the operations will begin immediately after the new mining license is received. The mine has a 7 year history of no major accidents. About Sparton. Sparton is a Canadian exploration, development and production company, establishing strategic relationships in order to advance its various mineral properties. The Company has a portfolio of production and development projects with germanium, gold, vanadium and uranium. For further information, visit www.spartonres.ca. About Voltaix. Voltaix manufactures specialty materials that enhance the performance and manufacturability of semiconductors and photovoltaics. Utilizing exceptional expertise in silicon, germanium and boron chemistry, our products are custom designed for the most demanding applications, including:

• Advanced DRAM computer memory • Silicon-Germanium (SiGe) transistors for wireless communications chips • Strained silicon for high speed logic computer chips (CPUs) • Copper-enabling low-K dielectrics for computer chips • High efficiency thin film silicon solar cells

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Voltaix materials enable logic chips to compute more quickly and solar cells to absorb a broader portion of the solar spectrum, and they improve manufacturability by minimizing defect formation and increasing machine throughput. Voltaix is the world leader in the manufacture of a number of electronics products, including germanium, diborane, trisilane, and trimethyl boron. The company uses proprietary synthesis, refining, and packaging technology developed in-house. It also designs and builds its own equipment for use in its manufacturing operations. The company, founded in 1986, employs approximately 100 people at its sites in North Branch, NJ and High Springs, FL. Intel Capital, Novus Energy Partners, and Mission Point Capital Partners are investors in Voltaix. Source: Voltaix, LLC. TECHNOLOGICAL INNOVATIONS OF THE LAST YEARS

Silicon-Germanium Chips Set New Speed Record. February 2014. A research collaboration consisting of IHP-Innovations for High Performance Microelectronics in Germany and the Georgia Institute of Technology has demonstrated the world's fastest silicon-based device to date. The investigators operated a silicon-germanium (SiGe) transistor at 798 gigahertz (GHz) fMAX, exceeding the previous speed record for silicon-germanium chips by about 200 GHz. Although these operating speeds were achieved at extremely cold temperatures, the research suggests that record speeds at room temperature aren't far off, said professor John D. Cressler, who led the research for Georgia Tech. Information about the research was published in February 2014. "The transistor we tested was a conservative design, and the results indicate that there is significant potential to achieve similar speeds at room temperature – which would enable potentially world changing progress in high data rate wireless and wired communications, as well as signal conversion, imaging, sensing and radar applications," said Cressler, who believes that these results also indicate that the goal of breaking the so called ‘terahertz barrier'. The tested transistor itself could be practical as is for certain cold-temperature applications. In particular, it could be used in its present form for demanding electronics applications in outer space, where temperatures can be extremely low. Silicon, a material used in the manufacture of most modern microchips, is not competitive with other materials when it comes to the extremely high performance levels needed for certain types of emerging wireless and wired communications, signal conversion, radar and other applications. Certain highly specialized and costly materials – such as indium phosphide, gallium arsenide and gallium nitride – presently dominate these highly demanding application areas.

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In SiGe technology, small amounts of germanium are introduced into silicon wafers at the atomic scale during the standard manufacturing process, boosting performance substantially. The result is cutting-edge silicon germanium devices. Such designs combine SiGe's extremely high performance with silicon's traditional advantages – low cost, high yield, smaller size and high levels of integration and manufacturability. All these properties make silicon with added germanium highly competitive with the other materials. "When we tested the IHP 800 GHz transistor at room temperature during our evaluation, it operated at 417 GHz," Cressler said. "At that speed, it's already faster than 98% of all the transistors available right now." Scientists develop Germanium thin films for flexible electronics. September 2013 Researchers have developed a new technique to produce thin films of germanium crystals - key components for next-generation electronic devices such as advanced large-scale integrated circuits and flexible electronics, which are required for gadgets that move or bend. Unlike conventional methods, the new approach does not require high temperatures or other crystals to act as seeds to grow the germanium crystal. And, the researchers say, the new method can be used to produce germanium films with a very large area. "This is the realization of the dreams of crystal-growth researchers," says Taizoh Sadoh of Kyushu University. "This unique method will open new ways to create advanced flexible electronics." Sadoh is an author of papers describing the new work. Charged particles move through germanium more readily than they do through silicon, making germanium a good material for electronics. In particular, it is a promising material for the thin-film transistors that are needed for flexible electronics. However, for use in flexible electronics, the germanium would have to be grown on malleable materials, which tend to soften at temperatures above 300° Celsius. The challenge, said Sadoh, is to grow germanium at lower temperatures. Using gold as a catalyst, Sadoh and his colleagues were able to grow germanium crystals at a temperature of about 250° Celsius. They were also able to grow them in such a way that their crystal structure has the proper orientation and electrical properties necessary for technological applications. Self-assembled germanium/silicon (Ge/Si) waveguide heterojunction photodiodes. September 2013. A novel technique using surface tension to locally bond germanium (Ge) on silicon (Si) is presented for fabricating high performance Ge/Si photodiodes. Surface tension is a cohesive force among liquid molecules that tends to bring contiguous objects in contact to maintain a minimum surface energy. We take advantage of this phenomenon to fabricate a heterojunction optoelectronic device where the lattice constants of joined semiconductors are different. A high-speed Ge/Si heterojunction waveguide photodiode is presented by microbonding a beam-shaped Ge, first grown by rapid-melt-growth (RMG)

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method, on top of a Si waveguide via surface tension. Excellent device performances such as an operating bandwidth of 17 GHz and a responsivity of 0.66 and 0.70 A/W at the reverse bias of 24 and 26 V, respectively, are demonstrated. This technique can be simply implemented via modern complementary metal-oxide-semiconductor (CMOS) fabrication technologies. Germanium is an attractive semiconductor utilized in many of the state-of-the-art electronic and optoelectronic devices. The hole mobility of Ge which is about 4 times greater than that of Si, which makes Ge an ideal candidate for fabricating high-speed electronics devices operated beyond 100 GHz. In addition, the ability of monolithically integrating Ge with Si allows producing active photonic devices such as photodetectors, modulators and light emitters. However, direct heterogeneous epitaxial growth of Ge on Si is difficult due to the large lattice mismatch (4.2%). Alternatively, the Ge/Si integration can be achieved using wafer or die bonding of Ge on Si wafer. However, removing the bonded Ge substrate raises a cost issue. More significantly, this approach may be applicable to other material systems such as GaAs and GaSb III-V compound semiconductors and thus opens up new opportunity for making various hybrid heterojunctions on silicon. Germanium transistor could increase speed of computers. January 2013. Researchers from the Massachusetts Institute of Technology’s (MIT’s) Microsystems Technology Laboratories (MTL) have developed a type of transistor that is twice as fast as previous experimental models and almost four times as fast as the best commercial equivalent. The new p-type transistor is made from germanium, alloys of which are already found in commercial microchips, so germanium transistors could be easier to integrate into existing chip-manufacturing processes than those made from more exotic materials. The transistor could solve some of the problems of computer technologies due to its small size. High-purity germanium detectors for homeland security. February 2012. High-purity germanium (HPGe) detectors are the recognized gold standard for detection and identification of characteristic gamma rays from nuclear or radiological sources. No other detector comes close to matching their extremely high resolution and sensitivity. However, until recently, their use outside the laboratory has been limited. A number of challenges had to be overcome before they could be deployed routinely in the field. These included the need for cryogenic cooling, the size and weight of the portable HPGe systems, the need for rugged packaging for extreme environments and the need for expert interpretation of the data. Today, rugged, low-power, lightweight and highly reliable HPGe systems are available off-the-shelf. Ruggedized mechanical cooling systems have eliminated the need for liquid nitrogen. Thanks to improvements in data conversion hardware and software, the task of analysis has been transferred to the instrument. Built-in software, in most cases, can automatically analyze and interpret the data, without expert assistance, and can alert the operator if a threat exists.

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Today, rugged self-contained HPGe detector systems can go anywhere in the field to search for and identify suspect sources, such as weapons-grade plutonium or radiological dispersal devices (dirty bombs.) A built-in computer automatically sorts the signals into a gamma-ray spectrum, analyzes it for known nuclides and displays the results. All this is now packaged into a small-held unit. The detector systems can then be unplugged from the external power source and operated independently for greater than three hours. They typically weigh between 7 and 12 kg, depending on detector size and optional neutron detectors. With the addition of two small three-pound batteries, which can be attached to a belt, the systems can now operate continuously in the field for more than 20 hours. It doesn’t take a highly trained analyst to interpret the data in the field. Portable HPGe detector systems are designed for non-technical users. Built-in software can analyze the gamma-ray spectrum reliably and compare the results to a catalog of characteristic peak energies, in order to identify the nuclides in the source. Nuclides found are displayed on the screen and alarms can be set for specific sources. There is a mono button to push for ID and a mono button to search for special nuclear material. HPGe detectors are cost effective. They can greatly reduce false alarms, which otherwise would cost additional time and expense to investigate. Moreover, they can detect weak signals from dangerous radiological or nuclear devices which would be missed altogether by other detectors. HPGe systems have now been widely deployed within various military organizations, customs and border patrol, and in other fields.

1.5. THE PRINCIPAL FACTORS HAMPERING INDUSTRY DEVELOPMENT AND MARKET GROWTH. GERMANIUM SUBSTITUTES. Up to date chemical industry has synthesized the substances that are similar to germanium and that can replace it in its principal characteristics. Some of them are described below. New synthesized zinc sulfide. It was specially designed to create an environment necessary for production of long-range infrared spectrum used in thermal image cameras. The producer announced that it can replace the germanium containing optics. In the future zinc sulfide can ouster germanium, which is more expensive and seldom occurs in natural condition. However, at the moment it lags behind germanium in a number of parameters; Researches are also conducted in respect of silicon, which is less expensive for production of electrical equipment. Though several metal compounds including gallium, indium, selenium, tellurium can replace germanium in electrical devices, this element is still more reliable. It is irreplaceable in the production of HF applied electronics and economical light diodes. There is also a good potential in investigating titan, which can become a good alternative for Ge as a polymerization catalyst.

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Since quartz fibers of doped germanium are used as a standard of optical fibers, its other compounds have similar properties for replacing this element in similar environments. At least two compounds perfectly suite the transfer of infrared rays in optical environment. Specialists believe that powder-air glass or polymer fibers have big potential for certain types of telecommunication applications. Several semi-conductors, mainly silicon and other semi-conducting compounds, such as gallium arsenide and indium antimonide are quire ready to compete with germanium and may replace it in most of semi-conducting components. The possibility that these elements will actually ouster germanium from any of the described areas will be largely defined by useful physical properties of these components, simplicity of their synthesis and production as well as actual cost. Researches in this field continue… In general, at the moment there is a number of compounds and elements with the properties similar to that of germanium. Yet, they can not replace it, as the products currently produced from germanium have target physical and chemical properties.

1.6. THE ANALYSIS OF THE IMPACT OF ACTUAL AND POTENTIAL ECONOMIC SANCTIONS ON THE INDUSTRY. The timeline of introduction of sanctions against Russian citizens and companies was widely covered by the media. Starting March 17, 2014, the USA and EU, disagreeing with the actions of Russia during the Ukrainian crisis, imposed sanctions in respect of high-ranking Russian politicians. The sanctions have integrated nature and envisage a number of measures against certain citizens of Russia and Ukraine and a number of international legal sanctions and economic measures. At first, the USA and EU imposed only sanctions related to suspension of international cooperation in various sectors, but then "due to the gravity of the situation", the sanctions were expanded to personal and sectoral sanctions, which made Russia take responsive measures.

March 2014: Suspension of cooperation with the Russian Federation in certain spheres: defense complex, investment cooperation, space exploration. Endorsement of the list of persons, in respect of whom "personal" sanctions were introduced, including: the ban on entrance to the USA and EU, freezing foreign assets, the ban for the residents of the USA and EU on entering any contract relations with persons, subject to sanctions. March 2014 – July 2014: Recurrent expansion of the list of persons, subject to "personal" sanctions. July 2014 – August 2014:

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The USA and EU introduce sectoral sanctions in respect of Russia in the fields of finance, O&G, energy service, defense industry and civil aviation. It should also be noted that from March through August 2014 the Russian Federation adopted a number of response measures and sanctions. These measures of personal and sectoral nature were mainly related to agriculture, international trade and civil aviation. Thus, it is evident that currently Russia, the USA and the countries of the EU are under threat of further escalation of sanction policy, which now, in fact, turn to be reciprocal.

In our understanding, the industry in question will be influenced by the following factors:

- Limitations on export of germanium and germanium containing products from Russia, but only for a number of countries taking part in the sanctions.

It should be noted here that probability of imposing sanctions on the export of Ge and final Ge-containing products is extremely low due to a number of factors.

First, the products from the Russian Federation are competitive in terms of price, as compared to the products from other countries. For instance, additional customs fees on the products from China were introduced by the USA long time ago, which make them more expensive.

Second, in case of such limitations, it will be possible to use trade schemes via dealers in other countries. Though it may increase the price of final products, the experts estimate that it is unlikely to spark off refusal from cooperation. Why should the USA buy Chinese germanium, encumbered by special customs fees, instead of Russian one? Besides, if such a situation hypothetically arises, other suppliers are likely to raise their delivery rates in an attempt to make profit.

In any case, expenses from such activities will be incurred by the buyers, the USA, in the first place. Thus, the probability of such export limitations and bringing down the competitive ability of Russian germanium and final germanium containing products at the global market is estimated as low.

- limitations related to import of germanium and final Germanium containing products to Russia for countries participating in the sanctions.

On the other part, given that basic scenario predicts future growth of Germanium consumption in Russia with the average rate of 3.3% in volume terms, we can expect further increase of investment into domestic Ge-manufacturing industry.

Thus, we can assess the influence of sanctions on the industry as moderate.

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CHAPTER 2. THE PRINCIPAL FIELDS OF GERMANIUM APPLICATION: ANALYSIS OF MAJOR TRENDS AND AVENUES.

This figure demonstrates the principal fields of GeCl4 application. The figure suggests that the main amount of GeCl4 is used for production of optic fiber (about 56%).

Figure 2.1.

This figure reflects the principal fields of GeО2 use. The figure suggests that the main amount of GeО2 is applied for production of infrared optics (about 41%), catalysts (about 18%) and in solar energy (24%).

Figure 2.2.

This figure reflects the principal fields of SCG use. The figure suggests that the principal amount of SCG is used for the production of infrared optics (about 41%), electronics (about 14%) and in solar energy (31%).

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Figure 2.3.

This figure reflects the principal fields of ZRG use. The figure suggests that the principal amount of ZRG is used for the production of infrared optics (about 17.5%), electronics (about 37.6%) and catalysts (12%).

Figure 2.4.

This figure reflects the principal fields of using infrared optics. The figure suggests that the principal amount of infrared optics is used in the defense industry and communications.

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Figure 2.5.

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CHAPTER 3. THE ANALYSIS OF THE INDUSTRY OF PRODUCTION OF GERMANIUM AND ITS DERIVATIVES ACCORDING TO PORTER 5 COMPETITIVE FORCES MODEL.

Let us suggest the analysis of the market from the point of Porter 5 forces model:

• Threat of new entrants.

• Threat of substitute products.

• Bargaining power of customers.

• Bargaining power of suppliers.

• Intensity of competitive rivalry.

3.1. THREAT OF NEW ENTRANTS.

The entrance of a new company to the market of manufacturing and conversion of Ge and its derivatives requires high capital expenses related to production, management, replacement and modernization of production.

Besides, difficulties related to access to new fields may be an obstacle for the entrance of new producers to the market. The resources of germanium can be found only in certain regions of the world. These regions may be isolated, located far from the power lines and transport infrastructure. The development of these fields may turn out prohibitively expensive and may make this business less luring for the potential new participants.

In general, the threat of emergence of new players on the market is not high.

3.2. THREAT OF SUBSTITUTE PRODUCTS.

As it was mentioned above, during the last years the trend of combining Ge with other metal or replacing it by analogues was on a rise due to the growth of Ge prices. Yet, as far as the use of Ge in the industry is concerned, it is hard to find a similar metal with the same target properties. While the other metals can be substantially cheaper, and have better quality is some aspect, the productivity of ready-made product may decrease as a result of using the substitutes of germanium products.

In general, the threat of substitute products is estimated as not high, but it is likely to increase as a result of technological development of the consumption industries.

3.3. BARGAINING POWER OF CUSTOMERS.

The final market of germanium and germanium containing products is assessed by the experts as diversified and fractured. Thus, there are a great number of various companies consuming germanium and final germanium containing products.

Yet, it is hard to replace germanium during the production of final products. Many industries haven't found a substitute to this element yet. Besides, the governments of many countries create special

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strategic reserves of this metal on their territory. In general, this characterizes the influence of the buyers on the market as not high.

It should be noted that the level of germanium production from secondary raw is very high in some countries, and its average global level in 2014 was 30%. To some extent, it raises the independence of the buyers.

3.4. BARGAINING POWER OF SUPPLIERS. The production of germanium is a very labor and energy intensive process, that is why the key suppliers include power supplying companies. In most of the countries, the power market is controlled by a small number of big, vertically integrated companies, which makes their influence rather significant. The raw and equipment are also very important for germanium production, which makes the manufacturers weaker. Yet, the equipment for germanium production is highly specialized, and the producers of such equipment would find it hard to get alternative buyers. It makes their market significance a little bit weaker. On the other hand, the producers rely for a long time on supplier of specialized equipment thereby increasing their market power. In general, the bargaining power of suppliers is assessed as significant, but moderate.

3.5 INTENSITY OF COMPETITIVE RIVALRY.

The market of Ge products is an oligopoly with a little number of producing companies. More than 90 companies from about 30 companies trade in Ge raw. About 20 companies from over 10 countries manufacture Ge and Ge-containing products.

A great number of companies on the market have geographically diversified resource base. Such diversification decreases the level of competition. The cost of production expenses is also very high for the existing producers, as expansion requires not only substantial investment on the first stages, but also a great amount of time, since the result may be seen only in several years.

In general, the level of competition may be assessed as average.

CONCLUSION:

In general, the analysis of the market, in compliance with Porter 5 forces model shows that due to partial oligopoly on the market, little volume of trade and limited resource base, the market balance is a little bit shifted towards producers.

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CHAPTER 4. MAJOR CONSUMERS OF GERMANIUM (ANALYSIS ACROSS THE INDUSTRIES).

The major product consumers include the following sector: military-industrial complex, power and energy sector, communication and industry. The detailed level of demand across the industries is supplied below. Table. 4.1. The level of demand in germanium products across final consumer industries, 2000 – 2009, million USD31.

Branches 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Military-industrial complex 232,5 253,4 320,3 401,2 501,2 621,6 785,9 989,5 1290,8 1528,3

Power and energy 106,6 116,2 147,1 183,7 229,2 283,3 358,1 456 598,6 704,1 Electronics 92,8 98,9 120 142,2 168,7 197,6 238,6 290,2 362,1 410,3

Industry 75,2 81,8 103,1 127,1 156,3 191,2 238,2 298,8 364,9 403,7 Medicine 110,5 120,9 153 189,6 234,3 280,9 343,8 421,8 537,3 622,4

Communications 78,3 85,4 107,6 133,1 163,5 199,8 249 312,2 405,3 476,1 Other 71,4 69 76,1 75,8 69,1 62,1 43 25,3 17,4 10,7 Total 873,9 941,8 1174,3 1436,4 1751,5 2119,8 2614,7 3249,8 4175 4859,7

Table 4.2. The level of demand in germanium products across final consumer industries, 2010 – 2018 million USD 32.

Branches 2010 2011 2012 2013 2014 2015 2016 2017 2018 Military-industrial complex 1813,1 2212,5 2661,3 3424,6 4363,4 5230,8 5373,7 5480,1 6121

Power and energy 853,8 1079 1405,8 1949,8 2687,7 3475,5 3868,8 4251 5125,7 Electronics 476,4 606,9 766,4 1034,9 1401 1759,4 1908,3 2042,7 2375,6

Industry 459,6 544,2 652,6 859,6 1130,6 1397,4 1466,7 1540,6 1756,2 Medicine 715,3 853,3 1026,4 1303,1 1662 1977,9 2000,6 2029,6 2222,6

Communications 576,2 726,9 919,7 1232,2 1653,3 2074,3 2227,8 2377,7 2767,9 Other 75,1 171,7 305,2 449,6 696,8 955,4 1040,7 1160,7 1351,7 Total 5823,3 7273,5 9143,2 12203,6 16282,5 20346,2 21755,4 23133,4 26846,4

31Source: Analysis of Euroresearch and Consulting working group, data of Dedalus Consulting,, http://www.dedalusconsulting.com/ 32Source: Analysis of Euroresearch and Consulting working group, data of Dedalus Consulting, http://www.dedalusconsulting.com/. It corresponds to the basis scenario of the industry development.


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Diagram 4.3. The level of demand in germanium products across final consumer industries, 2000 – 2009, million USD.33

33Source: Analysis of Euroresearch and Consulting working group, data of Dedalus Consulting, http://www.dedalusconsulting.com/

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Diagram № 4.4. The level of demand in germanium products across final consumer industries, 2010 – 2018 million USD. 34

34Source: Analysis of Euroresearch and Consulting working group, data of Dedalus Consulting, http://www.dedalusconsulting.com/. It corresponds to the basis scenario of the industry development.


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The highest share of demand, both in cost and natural units in 2000-2018 belonged to the military-industrial complex. The level of final applications grows in the course of time (2010-2018, CAGR$ = 16.5%). Some experts relate this fact to the increase of defense budget of a number of countries and expansion of the fields of germanium application in defense industry. The power and energy trend also retained its ascending trend throughout the entire period under review from 2000 throughout 2018 (CAGR$ for 18 years = +24%). This budget growth may be explained by the growing use of germanium in power and energy sector and global development of the power industry. In the future, in 2014-2018, the level of germanium application is going to demonstrate high growth level in electronics (this sphere is extremely wide, ranging from consumer to industrial electronics) and medicine. The same situation is observed in the consumption of Ge in industry and communications. The experts relate this phenomenon to the new substitutes of germanium capable of its consumption, on the one hand (the replacements are local) and stable, not revolutionary, technological demand in it in these industries, on the other hand. The category "Other application" demonstrates non-standard dynamics. The consumption of the products revealed mixed trends from 2000 through 2007, which is explained by the limited set of application fields. As for 2008-2009, we observed a minimal level of germanium application in this field due to a negative impact of the crisis on final industries (for more details address chapter 1.3.).

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Table 4.5. The level of demand in germanium products across final consumer industries, 2000 – 2009, million units35. Branches 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Military-industrial complex 0,25 0,31 0,43 0,62 0,87 1,22 1,58 2,04 2,65 3,21 Power and energy 0,14 0,17 0,24 0,34 0,47 0,67 0,86 1,10 1,44 1,72

Electronics 0,12 0,14 0,2 0,26 0,35 0,47 0,58 0,72 0,89 1,02 Industry 0,13 0,17 0,23 0,33 0,45 0,63 0,8 1,02 1,24 1,39 Medicine 0,14 0,18 0,25 0,35 0,48 0,67 0,86 1,1 1,42 1,62

Communications 0,10 0,12 0,17 0,24 0,34 0,47 0,6 0,76 0,98 1,17 Other 0,10 0,11 0,14 0,16 0,18 0,18 0,15 0,08 0,04 0,09 Total 0,98 1,21 1,66 2,29 3,15 4,32 5,43 6,82 8,65 10,22

Table 4.6. The level of demand in germanium products across final consumer industries, 2010 – 2018, million units 36. Branches 2010 2011 2012 2013 2014 2015 2016 2017 2018

Military-industrial complex 3,79 4,45 5,12 5,92 6,83 7,92 8,58 9,28 10,01 Power and energy 2,07 2,52 3,03 3,65 4,40 5,34 6,04 6,82 7,66

Electronics 1,18 1,43 1,74 2,12 2,55 3,11 3,52 4,01 4,49 Industry 1,58 1,81 2,07 2,44 2,89 3,44 3,81 4,21 4,64 Medicine 1,85 2,13 2,43 2,78 3,17 3,64 3,88 4,17 4,4

Communications 1,41 1,71 2,06 2,48 2,99 3,62 4,09 4,62 5,2 Other 0,27 0,51 0,86 1,22 1,7 2,27 2,83 3,4 4,11 Total 12,15 14,58 17,3 20,61 24,52 29,33 32,74 36,5 40,51

35Source: Analysis of Euroresearch and Consulting working group, data of Dedalus Consulting, http://www.dedalusconsulting.com/. Note: Here we use the system of analysis and comparison in conventional units developed by Dedalus Consulting. 36Source: Analysis of Euroresearch and Consulting working group, data of Dedalus Consulting, http://www.dedalusconsulting.com/. Note: Here we use the system of analysis and comparison in conventional units developed by Dedalus Consulting. The data correspond to the basic scenario of the industry development.



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Diagram 4.7. The level of demand in germanium products across final consumer industries, 2000 – 2009, million units.37

37Source: Analysis of Euroresearch and Consulting working group, data of Dedalus Consulting, http://www.dedalusconsulting.com/. Note: Here we use the system of analysis and comparison in conventional units developed by Dedalus Consulting


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Diagram 4.8. The level of demand in germanium products across final consumer industries, 2010 – 2018, million units38

38Source: Analysis of Euroresearch and Consulting working group, data of Dedalus Consulting, http://www.dedalusconsulting.com/. Note: Here we use the system of analysis and comparison in conventional units developed by Dedalus Consulting. The data correspond to the basic scenario of the industry development.


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CHAPTER 5. KEY PARTICIPANTS OF VARIOUS SECTORS OF THE WORLD GERMANIUM MARKETS.

This scheme supplies the principal trends in production and use of germanium and products of early germanium conversion. Figure 5.1. The principal trends in germanium production and use39.

39 Source: Analysis of the working group

Raw Early conversion

GeCl4

Optic fiber Catalysts Electronics

Other

GeO2

IR Optics PET Communications

Ge

GPP

Metallurgy,

production of alloys, Optic covers

Traders, trade activity

Monocrystal

Devices

Optics, PV, solar energy

Electronics

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The research analyzes the activity of the following key germanium market participants.

Table 5.2. Key participants of the various sectors of the world germanium market40.

№ Company Group 1 Asturiana De Zinc S.A. Supplier of raw for germanium production 2 Teck Cominco Limited Supplier of raw for germanium production 3 War Eagle Mining Company, Inc. Supplier of raw for germanium production 4 OZ Minerals Supplier of raw for germanium production 5 OJSC "Germanium" Initial and/or secondary production of germanium in various forms 6 Chemical and technical developments Ltd. Initial and/or secondary production of germanium in various forms 7 Gelest, Inc. Initial and/or secondary production of germanium in various forms 8 Indium Corporation (Germanium Corporation Of America). Initial and/or secondary production of germanium in various forms 9 Recylex S.A. (Metaleurop S.A.) Initial and/or secondary production of germanium in various forms 10 N.V. Umicore S.A. Initial and/or secondary production of germanium in various forms 11 Lattice Materials Corporation Initial and/or secondary production of germanium in various forms 12 Novotech, Inc. Initial and/or secondary production of germanium in various forms 13 5N Plus Initial and/or secondary production of germanium in various forms 14 Yunnan Chihong Zinc-Germanium Co., Ltd. Initial and/or secondary production of germanium in various forms 15 Yunnan Metallurgical (Group) General Company Trader (included in the group due to the Holding structure) 16 China Germanium Co., Ltd. Initial and/or secondary production of germanium in various forms 17 Axt, Inc. Initial and/or secondary production of germanium in various forms 18 Germanium & Applications LLC Initial and/or secondary production of germanium in various forms 19 Soitec S.A. Manufacturer of germanium - based products 20 Japan Algae Company Ltd. Manufacturer of germanium - based products 21 International Isotopes, Inc. trader 22 William Rowland Ltd. trader 23 GFI Advanced Technologies, Inc. trader 24 Applied Materials, Inc. Consumer of germanium - based products

40 Source: Analysis of Euroresearch and Consulting working group,

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The geography of their location is extremely varied and covers practically all regions of the globe. The detailed description of the above companies is supplied below. The germanium market players included in the list are characterized according to the following key features:

• Current production line; • The planned release of new products in the future; • Production technology and business model; • The volume of sales; • Share.

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1. Asturiana De Zinc S.A. The company makes part of international industrial and financial Glencore holding. The company joined the holding in 2002. Today it is a public company holding firm positions in zinc sector. At the moment its principal activities include

production, conversion and sales of zinc and its alloys, as well as zinc oxide. To be more detailed, the company produces:

• Zinc Z1 99.995% (the content of pure zinc is 99.995%); • Zinc alloys and alloys for galvanization (plant alloys with various contents of aluminum made

in compliance with the order of the customer); • Sulphur acid; • Zinc oxide and liquid sulphur dioxide; • Lead concentrate; • Lead ore.

It is impossible to assess Asturiana De Zinc S.A. separately from its group of companies. Since Glencore has a great number of assets all over the world, the production of metals and chemical raw is delegated to a separate business unit Glencore Xstrata, which engulfs metal and mineral production assets. The group is also engaged in the production of energy intensive raw (coal, butter, etc.) and agricultural products. The total amount of employees is 200 000 people in 50 countries. Figure 5.3. Structure of Glencore Group activity41.

Asturiana De Zinc itself, apart from production of zinc and related products, renders consultation services and technical aid in the form of development, design and construction, launching new industrial and mining sites and running old enterprises. The company successfully implements projects in Brazil, Canada, China, Spain, USA, India, Italy, Peru, Portugal, Norway and South Africa.

41 Source: data of the company's consolidated financial statements.

Name in English: Asturiana De Zinc S. A. Country: Spain Founded: 2002 The nature of participation at the market: Supplier of raw for germanium processors Net profit in 2013: 56 million Euro

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The principal sectors of zinc and zinc products application include construction (45%), transport (25%), consumer goods (23%), engineering (7%). Diagram 5.4. Structure of zinc consumption42

The company has the following production structure. Diagram 5.5. The structure of Asturiana De Zinc production43

The dynamics of the principal company's industrial parameters are represented at the diagram below. During the last 3 years the level of the company's prime cost has grown from 63% to 66%. It should be noted that the company's expenses on raw, related to production and procurement of zinc raw, are growing. During the same period the level of net profit in gross revenues has fallen from 12% to 7%. Diagram 5.6. The principal financial rates of Asturiana De Zinc S. A.44

42 Source: data of the company's consolidated financial statements. 43 Source: data of the company's consolidated financial statements. 44 Source: data of the company's consolidated financial statements.

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Zinc is the 3rd world's most used non-ferrous industrial metal after aluminum and copper. The metal acquired great popularity, mainly, as a means of protection from corrosion. About half of the entire world's zinc is used for covering metal products, the process, which is known as zinc-coating. Zinc market currently experiences pressure due to the augmenting stocks, which are assessed at 4 million tons worldwide. Its mining and production expenses are expected to grow within a year, which is going to produce a positive impact on prices. The situation with extra production stocks is not likely to level off before 2015. This is explained by the fact that the planned shutdown of several big production mines including Australian Century (its production output is 510 thousand tons a year) and Perseverance (135 thousand tons a year) was put off till 2016. Thus, major zinc fields include Australia, China and Peru.

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2. Teck Cominco Limited Teck is a major Canadian resources conversion company, which specializes in the production and development of mineral resources such as copper, steelmaking coal and zinc. The company is also developing energy solutions for materials.

The company owns and develops 14 fields in Canada, the USA, Chile and Peru. It also has a wind power facility in Canada. Teck Group is working in 4 sectors and is a Canadian leader for all of them: Copper The company owns 5 copper fields in Canada and South America. According to the data of the company, 65% of all copper produced in the world is meant for electronics applications. In 2013 the company produced 364 thousand tons of copper from the following fields:

• Quebrada Blanca, Chile; • Carmen de Andacollo, Chile; • Antamina, Peru; • Highland Valley Copper, Canada; • Duck Pond, Canada.

The company's optimization plans include expansion of the existing copper mines. At the same time in 2013 it launched a unit for the production of copper concentrate. In addition, the company is actively investigating the opportunity of developing additional mines in Canada, Chile, Mexico, USA, Namibia, Peru, Turkey and Australia. Currently, there is active growth of the demand in copper. About 70% of copper produced by the company is sold to Asia. Such a demand is also stimulated by the growing popularity of green technologies, for instance, hybrid cars, which require 13-23 kg more copper than usual cars. Steelmaking coal Teck Cominco Limited is the world's largest exporter of seaborne steelmaking coal. Steelmaking coal is an essential ingredient in the production of steel, which is necessary for building major infrastructure sites of our life. 0.7 tons of steelmaking coal is necessary for the production of 1 ton of blast-furnace steel. Coal is produced from 5 fields in Coal Mountain, Cardinal River, Fording River, Line Creekmines and Elkview in Canada. 95% of its products are transported by railroad to the coast of British Columbia,

Name in English: Teck Cominco Limited Country: Canada Founded: 1986 The nature of participation at the market: Supplier of raw for germanium processors Net profit in 2013: 9,4 billion $

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the most southwestern state in Canada and shipped from there to Asia, Europe and South America. Its largest markets include Japan, Korea and Taiwan. Zinc The company is one of the world’s largest producers of zinc, capable of producing 600,000 tons of zinc in concentrates, and 290,000 tons of refined zinc, per year. The group owns two fields in Canada and Peru and conduct partial mining in the state of Washington, the USA. Researches in China demonstrated that the use of chemical fertilizes on the basis of zinc may increase up fertility up to 40%. That is why the company started cooperation with the Chinese Ministry of Agriculture for supply of zinc products. Energy solutions

Teck is oriented on sustainable development of new sources of energy for satisfaction of global demand. Today the company is oriented on sustainable development of the new sources of energy for satisfaction of global demand. The company implements 3 projects involving oil sands located in Canada. At the moment it is possible to deliver pure energy to 35 000 houses located in the county, where the project is implemented.

Starting 2011, the company has been investing into wind power energy. The project is located in Alberta, Canada.

The company believes that oil sands have big potential. That is why Canada's Oil Sands Innovation Alliance was founded. Up to now, it has accumulated 560 solutions and technologies amounting to 900 million USD.

The financial data of the company are submitted in the chart below.

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Diagram 5.7. The principal financial data of Umicore Group for 2009-201345

The net financial result in 2013 was 1.01 billion $, which means that net profit dropped by -45%, as compared to 2009, or by -64%, as compared to 2011. Two main trends are observed: decline in profits and increase in expenses by -13% and 22%, reciprocally. The volume of the manufactured products is submitted below. Table 5.8. The volume of manufacture across the product groups in 2009-2013, thousands of tons 46

Sectors 2009 2010 2011 2012 2013 Copper and alloys 308 313 321 373 364 Steelmaking coal 18 930 23 109 22 785 24 652 25 662 Zinc and alloys 711 645 646 598 623 Lead and alloys 205 182 170 183 183 Molybdenum 4 4 5 6 4 Accrual rate, % - 20% -1% 8% 4% Total 20 158 24 253 23 927 25 812 26 836

The average accrual of production capacity in natural units (CAGR) during the last 5 years is 7.4%.

45 Source: data of the company's consolidated financial statements. 46 Source: data of the company's consolidated financial statements.

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Diagram 5.9. Structure of Teck Cominco Limited's revenues across the categories of products in 201347

Steelmaking coal dominates in the revenues providing for 44% of the total income. Then comes copper with 27%. The company also develops such products as molybdenum, gold, etc, which in total provide for 5% of the revenues or 469 million $.


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3. War Eagle Mining Company, Inc. War Eagle is engaged in the development of fields and mineral resources for the production of germanium, zinc and lead. The firm is headquartered in Vancouver, Canada. It owns Tres Marias field in Mexico, where it develops germanium and zinc. The

first production of germanium was started in 1949. From 1949 to 1992 the company mined and processed 135 thousand tons of ore. 1 tons of such ore contains 20% of zinc, 10% of lead and 300 g/t of germanium. Then the production and conversion of ore was suspended until 2009 due to environmental reasons. Yet, in 2009 a new field was discovered, which provided for the opportunity of producing 7% of zinc and 37g of germanium per 1 ton. It allowed the company conversing up to 350 tons of zinc and 0.2 tons of germanium a year. The preliminary analysis of the site conducted in 2009 was very favorable and reassuring for preparation of the construction works. Due to economic reasons and remote location of the mine, in 2013 it was decided to sell it to a Mexican company, ready to start the development of metals on the field for their further sale on the territory of the country. The cost of deal is 2.5 million $. During this period the company is not going to receive any profit beside this deal or even suspend activity. Another sphere of the company's activity is production of tantalum, lithium and tin. About 60% of the isotopes of these elements are produced in Australia. The other part is concentrated in Canada. War Eagle Mining Company manages this field, but in fact it is sold to MAC. And finally, the company carries out administrative management of a gold mine located in Canada. It is also being prepared for sale. Thus, the principal activity of the company is focused on one time deals related to rare metals fields. The expenses include costs on their temporary management during downtime and other administrative costs. The financial statements of the company report the following financial results submitted in the diagram below.

Name in English: War Eagle Mining Company, Inc. Country: Canada Founded: 1984 The nature of participation at the market: Supplier of raw to the processors of Germanium Net profit in 2013: - 0.1 million $

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Diagram 5.10. Dynamics of the financial results of the company in 2013-2014, $48

The location of germanium development is spotted on the figure below. Figure 5.11. Map of germanium field location in Mexico.49

48 Source: data of the company's consolidated financial statements. 49 Source: Analysis of Euroresearch and Consulting working group.

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4. OZ Minerals

This Australian group of companies was founded as a result of a merge of 2 mining companies, Zinifex Limited, incorporated on the basis of bankrupt Pasminco and Oxiana Limited. This is how OZ Minerals was created in 2008. OZ Minerals Limited is the 3rd largest Australian mining company. It ranks second worldwide in

terms of zinc production.

Apart from zinc, the company produces copper, lead, gold and silver. OZ Minerals is a public company, its shares are traded on ASX stock exchange. It is headquartered in Melbourne, Victoria. OZ Minerals produces mineral on the territory of Australia and Asia and takes part in the development of new fields worldwide.

Diagram 5.12. The dynamics of the financial results of OZ Minerals in 2009-2013, in million rubles50.

The principal mining production projects:

1. Century mine is located in the north-west of Queensland. Zinc, lead and silver are produced in this open mine. Century is the world's second largest zinc production mine. It produces 500 thousand tons of zinc a year.

2. Golden Grove field is located in Western Australia, approximately 450 km north-east of the city of Pert. Zinc, copper, lead, gold and silver are produced here in the open mine. Prominent Hill field is located in the central part of South Australia, 650 km north-west of Adelaida. Copper, gold and silver are developed in open careers.


Name in English: OZ Minerals Country: Australia Founded: 2008 The nature of participation at the market: Supplier of raw for production of germanium Net profit in 2013: -294 million $

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3. Rosebery is located in the northwestern section of the Australian state and island of Tasmania. Zinc, copper, lead, gold and silver are produced in the underground mines. The filed is very old, it has been operating since 1936.

4. Carrapateena, a copper and gold production project, was acquired in May 2011. It keeps on demonstrating high productivity.

5. Sepon is located in Laos, Savannakhet Province, OZ Minerals owns 90% of the project, the rest 10% belongs to the government of Laos. The field has been operating since 2002. Open-pit mining provides for the production of copper, gold. The area of the development includes 1250 km². About 65 thousands tons of copper a year is produced in Sepon.

As we have mentioned earlier, zinc and copper ores are key sources for the production of germanium. The structure of production and mining by OZ Materials across the types of products is submitted below.

Diagram 5.13. The structure of profits of OZ Materials group in 2013 across the types of products is submitted below.

As of late 2013, market capitalization of the group amounted to 955.9 million $. The forecast of the group development for the following years includes:

1. A focus on copper production (production increase by 100-150 thousand tons); 2. Increase of expenses for the development of new fields; 3. Creation of a portfolio of investment projects.

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5. OJSC "Germanium" The enterprise was founded in 1991, in compliance with the order of Krasnoyarsk Plant of Non-Ferrous Metals on the basis of germanium production workshop launched in 1961. Starting from 1999, it was considered to be a unitary enterprise. OJSC "Germanium" controlled by Rostec state company (100% of shares) was founded on

December 27, 2010. On June 27, 2013, a controlling interest in the company was transferred to Russian Electronics OJSC. As of December 31 2013, Russian Electronics OJSC owned 90.3134% of shares. The rest 9.6857% of shares belonged to the Federal Agency on Management of State Property. The company walked a long and difficult way from importing products to the domestic market to exporting a wide range of products to the market of Russia and other countries (the USA, Israel, Japan, markets of Europe and Asia). According to internal assessments, the share of its products on the world markets amounts to 10-15% (yet, in our assessment, this figure does not correspond to reality). The maximal committed capacity of OJSC "Germanium" is 30 tons a year. According to expert assessments, in 2014 the launch of various forms of germanium from secondary sources was 7.5-8 tons (approximate evaluation). The assortment range of the company is strictly limited. Moreover, the data specified in the table, are applicable for many other enterprises of the industry. Table 5.14. Current production line of OJSC "Germanium"51.

Assortment of manufactured products

Description Purpose

Germanium tetrachloride - GeCl4

Colorless transparent fluid Used for production of pure germanium

Germanium dioxide - GeO2 White powder

Preliminary product for production of pure germanium. It is used for production of optical fibers

Polycrystal zone-purified germanium

White-silver ingots

Optical coatings, growing monocrystals, production of alloys, receiving powder germanium

Metal germanium Powder and granules Components of infrared optics - entrance windows, lens, monochromators and other


Name in English: OJSC "Germanium" Country: Russia Founded: 1991 The nature of participation at the market: Initial and secondary germanium conversion (Ge,GeO2, GeCL4) Germanium turnover in 2013: up to 7.5-8 tons. Net profit in 2013: 1.7 million $

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Assortment of manufactured products Description Purpose

devices

Monocrystal germanium Czochralski method

Blanks for windows and lens of infrared optics, electronic components (diodes, transistors, bolometers, photo electric converters, substrates for epitaxy)

Blank s for optical components Round, rectangular, spherical forms

Components of infrared optics - entrance windows, lens, monochromators and other devices

The destination of all these products is extremely varied. Yet, further assortment development is currently impossible due to limited application and demand at the market. The company's production technology includes highly effective hydrometallurgical minerals separation, turning the valuable component into solution, methods of selective separation of a valuable component from impurity elements, receiving a certain type of products and refining of industrial waste. The applied technology allows conversion various materials: production waste, ash from coal combustion, germanium concentrates, containing 2% of germanium and more; secondary raw of various origin. The technological manufacturing process includes six conversion stages. Receiving ready-made projects is possible at five of them. The enterprise has a series of devices for growing monocrystals. The obtained monocrystals correspond to the enhanced optical and structural requirements and material purity standards. The enterprise has highly accurate equipment for mechanical treatment of germanium allowing the manufacture of various pre-forms (lens, flat, round and rectangular substrates). The financial state of the company is rather stable. Table 5.15. Report on profits and losses of OJSC "Germanium"52.

Item 2009 2010 2011 2012 2013 Profits and losses from standard operations Revenues from sales (VAT and excise duties excluded)

400 582 000 302 042 000 512 405 000 456 645 000 624 953 000

Cost of sold goods, products, works and services

283 718 000 231 745 000 387 163 000 384 078 000 506 537 000

Gross profit 116 864 000 70 297 000 125 242 000 72 567 000 118 416 000 Commercial expenses 21 790 000 14 481 000 20 726 000 10 764 000 11 220 000


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Item 2009 2010 2011 2012 2013 Administrative expenses 21 566 000 23 867 000 28 171 000 36 732 000 33 330 000 Profit (loss) form sales 73 508 000 31 949 000 76 345 000 25 071 000 73 866 000 Operational incomes and expenses Interest receivable 258 000 366 000 364 000 601 000 698 000 Interest payable 30 000 Other incomes 111 737 000 66 667 000 144 848 000 122 110 000 65 606 000 Other expenses 116 450 000 70 387 000 150 640 000 138 914 000 68 792 000 Non-operational incomes and expenses EBT 69 053 000 28 595 000 70 917 000 8 868 000 71 348 000 Current income tax 13 548 000 8 327 000 16 049 000 -4 486 000 -13 473 000 Extraordinary incomes and expenses Deterred tax liabilities 314 000 Net profit (loss) 55 502 000 21 427 000 55 616 000 4 430 000 56 058 000

The reference to the company is provided by such reputed source as the U.S. Geological Survey in the report about global germanium market, according to ENF Solar (http://www.enfsolar.com/).

http://www.enfsolar.com/

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6. Chemical and technical developments Ltd. Chemical And Technical Developments Ltd was founded in the south of England near Salisbury in Wiltshire 25 years ago. The principal type of activity is production and supply of pure non-organic substances. The clients of the company encompass electronics, optical and optoelectronics,

chemicals, universities and research laboratories, defense and aerospace concerns, metal conversion companies. The assortment of products includes: - Germanium dioxide (white powder, packaging: 1 or 2 kg, in plastic bottles); - Germanium tetrachloride (clear liquid, packaging: 2.5 liter glass); - Tungsten oxychloride (red crystal powder, packaging: 1 or 2 kg, in glass bottles); - Cesium nitrate (white powder, packaging: 1 or 2 kg, in plastic bottles); - Other transition metal and lanthanide compounds (Dysprosium, Gadolinium, Neodymium, Praseodymium, Samarium, Scandium, Lanthanum, Tantalum, Yttrium) The business model of Chemical And Technical Developments Ltd is based on collecting and conversion industrial metal bar and production waste containing germanium or germanium dioxide. A range of technological processes provide for germanium of high purity. The suppliers of metal bar include producers of infrared lens and other components of infrared systems, as well as producers of powders and pastes, containing germanium dioxide. The company also buys materials and compounds containing gallium and indium.

Name in English: Chemical And Technical Developments Ltd. Country: the UK Founded: 1999 The nature of participation at the market: early germanium conversion (Ge,GeO2, GeCL4) Germanium turnover in 2013: ~ 1,6 tons Net profit in 2013: 10 million $

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Figure 5.16. The layout of Chemical And Technical Developments Ltd location (plan view)53.

53 Source: Google Maps.

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7. Gelest, Inc. Gelest, Inc., headquartered in Morrisville, PA, USA, was founded in 1991 as a manufacturer of organo-silicon and metal-organic materials for commercial production. Initially the company offered several hundred items of high-tech materials, while today the scope of its products includes several thousand trade names. Gelest, Inc. offers the most comprehensive selection of

silane, silicone, and metal-organic materials in the world. Figure 5.17. Exterior view of Gelest, Inc. plant54

Opening a new chemical plant in 2007 was a landmark step in the activity of the company. The production capacity of a new high pressure reactor is 1000 pounds per square inch. In 2008 the company extended its capacity on manufacturing products from organic metals. In 2011, a logistics facility with the total area of 154 square feet was launched in Frankfurt for storing extremely dangerous products. The headquarter of the company and the principal production are located in Morrisville. The facility occupies the area of 3.2 hectares out of 8.9 hectares available. The principal production has 8 sections and includes reactors 100-liter glass reactors and glass-lined reactors from 50-gallon to 1,000-gallon capacity, high-pressure reactors, distillation equipment, and continuous polymerization units..

54 Source: The company's corporate site.

Name in English: Gelest, Inc. Country: США Founded: 1991 The nature of participation at the market: Early germanium conversion (GeO2, GeCL4) Germanium turnover in 2013: ~ 1 ton Net profit in 2013: 12.5 million $

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The principal clients of the company include companies of microelectronic industry, optical diagnostics, pharmaceutical and space industry. The company works in close cooperation with Columbian University in the field of asymmetric induction reactions and with the University of Illinois in the program of silicon cross-compounds. The production assortment range includes the following groups of goods: - Silanes (Compounds of silicon and hydrogen). [Application: applied in various reactions of organic synthesis (receiving valuable organic-silicon polymers, etc.), as a source of pure silicon for microelectronic industry. Monosilane is widely used in microelectronics and finds wider application in the production of crystal and thin-film photo converters on the basis of silicone, LCD, substrates and technological layers of integral schemes]; - Silicones (Oxygen containing high-molecular organic-silicone compounds) [Application: Silicones have a number of unique properties and combinations, absent in any other available substances. The scope of their application is wide]; Metal organics (germanium, indium, other). It should be noted that the company is a global leader in the field of silicone products. The company has representative offices in Europe, the UK and Asia. Table 5.18. Representative missions of the company as of 201455

Name of the representative mission Country Gelest Ltd. The UK Gelest Inc. Germany AZmax Co. Ltd. Tokyo Office Japan Gulf Chemical Singapore Gautavik International India A Meryer Chemical Technology Shanghai Company China

The production of germanium occupies a small share in the revenues of the company. According to our assessments, this share does not exceed 10%.56 The company's sales in 2013 amounted to 12.5 million USD.

55 Source: Data of the company's consolidated financial reports. 56 Source: Data of the working group.

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8. Indium Corporation (Germanium Corporation of America). The company was founded in 1934 and today it has several production assets worldwide: China, Singapore, South Korea, the UK and the USA. The company is still operational. At the moment the company is one of the leading suppliers of the materials for the markets of electronics, semiconductors, solar energy, thin-film technology and thermal management. The

assortment of products includes solder materials for soldering hard metals, low-melting solder, solder blanks. The company is also engaged in refining of hard metals, such as gallium, germanium and indium. A wider list of manufactured products includes:

• Solder material • Low-melting solders; • Engineering solder materials; • Electrode wire; • Liquid solder materials; • Materials for semi-conductors; • Metals and compounds • Solar energy materials; • Solder paste; • Semiconductor solder paste; • Germanium; • Gallium; • Tin; • Indium; • Thermal interface materials

At the moment the company plans to extend its activity to the markets of Europe and the USA. In 2013 it acquired non-organic production assets in New York, the USA. The other promising fields for the company include developments in nano-technologies for thermal protection of electronic components. From 2008 through 2013 the company received several Intel and Samsung awards as the best supplier. The map of the territorial presence of the company is presented at a figure below.

Name in English: Indium Corporation (Germanium Corporation Of America) Country: США The nature of participation at the market: Early germanium conversion (Ge,GeO2, GeCL4) Founded: - Germanium turnover in 2013: (1.3) tons Net profit in 2013: ~10 million $

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Figure 5.19. The scheme of Indium structural units57.

The key facilities on production of germanium and related products are located in Chicago, the USA.

57 Source: The company's corporate site.

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9. Recylex S.A. (Metaleurop S.A.) The company is a specialist in the production and secondary conversion of lead, plastic and zinc as well as products from special metals, necessary for micro electronics industry. Back in 1881 Peñarroya founded a company, which specialized in mining and later in

metallurgy. PPM Pure Metals GmbH, subdivision of Metaleurop S.A., produces GeCl4 for optical fiber applications, 7 types of GeO2 (amorphous, technical, electronic, BGO-grade, etc.) with the purity from 99.5% to 99.999%, as well as zone-purified ingots. The raw (apart form the purchased one) includes concentrates received from zinc plant in France. The general volume of production of all types of Ge-products ranges within a range of 40-45 tons a year, including 7 tons of ingots a year. In the 20th century the company became a symbol of industrialization. Then, in 1988 this hydrometallurgical merged Preussag, a company, engaged in the production and conversion of non-ferrous metals. That is how Metaleurop group was founded. In 2007 Metaleurop changed its name for Recylex in order to position itself as a key player at the market of the renewable energy. At the moment Recylex group includes over 10 plants and 3 representative missions in Germany, France and Belgium employing over 700 people. According to the data of the company, 74% of the group sales are related to the conversion of lead, while only 3% is connected with the conversion of polypropylene. For reference, 80% of the lead produced worldwide is meant for the production of various batteries (cars, machines and equipment, converters). 60% of them are the products of secondary lead conversion, which makes it a leader in this field. The group of companies includes two managing companies located in Germany, 3 companies engaged in conversion of zinc, situated in France and Germany, 3 companies involved in the conversion of lead, 2 plastic conversion plants in Gemany and France, and 1 PPM PURE METALS Gmbh enterprise, which specializes in conversion special metals such as germanium, arsenic and gallium located in Germany. The scheme of the holding is presented at the figure below.

Name in English: RecylexS. A. (MetaleuropS. A.) Country: France Founded: 1988 The nature of participation at the market: Early germanium conversion (Ge, GeO2, GeCL4) Germanium turnover in 2013: 6 tons Net profit in 2013: -39 million Euro

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Figure 5.20. The scheme of Recylex S.A holding.58

In 2013 the share of special metals in the structure of the company's sales was 5%. Germanium occupied some 555 of this share, which accounted for 12.1 million Euro. According to market prices it means about 6.3 tons of germanium. Table 5.21. The structure of sales by Recylex S. A. in 2013 across the products59

Item Share, % Amount, million Euro Lead 74% 324,3 Polypropylene 3% 13,1 Zinc 18% 78,9 Special metals including 5% 21,9 Germanium 55% 12,1 Arsenic 20% 4,4 Gallium 10% 2,2 Other 15% 3,3

Thus, the company is a global leader in the secondary lead conversion. Yet, the financial state of the company described by the data in the chart below is characterized as negative.

58 Source: Data of the company's consolidated financial reports. 59 Source: Data of the company's consolidated financial reports.

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Diagram 5.22. The principal financial parameters of Recylex S. A. for 2010-2013, million Euro60

The level of the company's net profit deteriorates from year to year: -9% of cost-effectiveness in 2013, while the share of property in total revenues grew from 71% to 82% during 4 years.

60 Source: Data of the company's consolidated financial reports..

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10. N.V. Umicore S.A. N.V. Umicore S.A. is an international company engaged in the production of high-tech materials and secondary raw conversion headquartered in Belgium. The group was founded more than 200 years ago, in 1805. Initially, it was engaged in zinc production. In 1968 after a number of merges the company was privatized by the state. Yet, in

1989 it was transformed into a big industrial company and in 2001 changed its name for Umicore. The group is oriented to 4 fields:

• Catalysis (methods of accelerations of chemical reactions and materials necessary for that); • Materials for energy industry; • Materials for power and high technologies; • Renewable raw and its conversion.

The company has a separate market oriented business unit for each direction. In total, the company encompasses practically all continents of the Earth employing 14,000 people. At the moment, Umicore group of companies is one of the major industrial groups engaged in supplies of high-tech materials (the revenues in 2013 is 9.4 billion Euro). The company has a special internal system of stimulating new developments, which encourages bold scientists proving a chance to absolutely everybody to contribute to the research activity. In 2013 the expenses on R&D amounted to 141 million Euro, which is equal to 6% of the group revenues. The structure of the group featuring types and fields of activity and the products on offer are presented at the figure below.

Name in English: N.V. Umicore S. A. Country: Belgium Founded: 1968 The nature of participation at the market: Early and secondary germanium conversion (Ge, GeO2, GeCL4, crystals) Germanium turnover in 2013: 14 tons Net profit in 2013: 185 million Euro

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Figure 5.23. Structure of Umicore Group across the types of activity61.

The figure suggests that the highest share in the company's revenues is occupied by the production of energy materials and other special materials (76% of the incomes of the company). The principal financial indicators of the company's activity are presented at the diagram below. Diagram 5.24. The principal financial indicators of Umicore Group in 2009-201362

The level of cost-effectiveness according to net profit rose from 1% to 2% during the last 5 years. The revenues of the company saw ups and downs bottoming at 9.9 billion Euro in 2013, yet the total growth during 5 years reached 41% The group is very concerned with the problems of energy saving, that is why it is oriented on the production of clean and harmless materials, such as materials for lithium-ion batteries necessary for


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the production of electrical vehicles. The company is also trying to arrange the production of 26 elements from the table of chemical elements, including precious elements. This is the vision of the company ending 2015. The distribution of revenues across the region, where the group's enterprises are located, is presented on the diagram below. Diagram 5.25. Revenues of Umicore across the regions in 201363

More than half of the revenues is provided by the European markets, then comes Asian division with 24% and North American one with 16% The geographical distribution of industrial enterprises and research centers is presented at the figure below. Half of the companies are located in Europe, about a quarter is situated in Asia, the other companies are distributed among other continents.

63Source: Data of the company's consolidated financial reports.

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Figure 5.26. Geographical distribution of Umicore Group enterprises64

The financial analytics of the company's activity is submitted below. The energy materials, to which germanium belongs, rank last in the list with 17% in the share of the company's turnover. Diagram 5.29. The structure of revenues across the types of activity in 201365


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11. Lattice Materials Corporation Lattice Materials is an American company founded in 1989. The enterprise specializes in the production of silicon and germanium blanks and blanks of any kind, for their use in optics, development of thermal vision systems, systems of missile guidance and surveillance cameras. The company has rich experience in working with these materials that are very hard to process due to complicated characteristics of their

shortness and soundness. The company has a rich history of supplying germanium and silicon lens to state corporations during the First Gulf War. During the last decade the company has largely expanded its production capacity. Every year it employs the best professionals and improves its product. At the moment the company employs 50 people. The industrial area is 2,000 sqm. An important advantage of the market is individual customized approach to material and its technical properties. It grows its silicon and germanium crystals using the Czochralski technology. The company is capable of producing crystals in round, square, conic and any other non-standard forms. The short characteristics of the produced germanium:

• Metal purity - 99.99%; • Outside appearance – whit-graying, shining crystals of set or optional form; • Toxic level – very low; • Melting temperature – 937оС.

The principal buyers of the company include: - State defense enterprises buying optical blanks on the basis of the developed materials, components for the aircraft, missile defense and other military systems; - Commercial enterprises using lens in the basis of germanium for production of thermal vision devices; - R&D laboratories and centers, engaged in germanium experiments.

Name in English: Lattice Materials Corporation Country: the USA Founded: 1989 The nature of participation at the market: Early germanium conversion and devices on the basis of Ge Germanium turnover in 2013: 1-2 tons Net profit in 2013: 5-10 million $

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Figure 5.28. Samples of germanium devices produced by Lattice Materials66

The enterprise processes the devices with the precision of 0,001 inches or 0,0254 cm, which confirms extremely high quality of the manufactured products. In the USA the development and sale of products for the industry of infrared devices is regulated by the state. Lattice Materials has all necessary licenses for the development of these products and tracks all latest legislative amendments in the industry. The volume of sales in 2013 was about (5; 10) million $. 67

66 Source: The company's corporate site 67 Source: Site about producers and suppliers http://www.alibaba.com/.

http://www.alibaba.com/

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12. Novotech, Inc. Novotech, Inc. was founded in 1997. Novotech is a global supplier of infrared optical and semiconductor materials and services. The infrared division operates out of Acton, Massachusetts, while the semiconductor group is in Lakeside, Arizona. Germanium is a core product of the company, supplied from ingots to

polished substrates. Our competitive position in the germanium business comes from sourcing the metal as by-products of zinc smelting and coal ash. That is, Novotech purchases and upgrades the materials from the source, allowing it to offer a more competitive price. The total industrial area covers 3.2 thousand sqm. The company is operating in the following fields:

• Polishing, shaping and conversion of the material; • Infrared optics; • Conversion germanium and other materials (zinc selenide, gallium arsenide, zinc sulfide,

calcium fluorine); • Solar panels.

In 2014 the company employed 35 persons. Novotech, Inc. supplies germanium in mono and polycrystalline form. The standard germanium parameters range within the following level:

• The resistivity is typically in the range of 4-40 ohm/cm at 25оС; • Transmission in the 2 to 15 um range.; • Absorption coefficient is no greater than 0.035 cm-1 at 10.6 m and 25оС.

Types of germanium produced by the company:

• Pure germanium 99,99%; • Sliced germanium 99,99% (crystals of odd form); • Germanium powder and chips of various fractions; • Germanium dioxide.

The company provides an opportunity of acquiring germanium right in the on-line regime from the site. The price for germanium chips of 3-12 mm fractions is 2,200 USD/kg. Fractions smaller than 1 mm cost 2100 USD. The company owns a large park of conversion equipment ranging from automatic generators to automatic trimming machines with a computer slicing system, from sampling probes to highly professional computer microscopes.

Name in English: Novotech, Inc. Country: the USA Founded: 1997 The nature of participation at the market: Early germanium conversion and trading Germanium turnover in 2013: 1-2 tons Net profit in 2013: - million $

95

The company also has a system of collecting spent equipment, materials and other things potentially containing the remains of germanium, which makes the manufactured products cheaper without influencing the quality. The volume of sales in 2013 was about 5-10 million $. 68

68 Source: Site about producers and suppliers http://www.alibaba.com/


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13. 5N Plus 5N Plus group of companies was founded in 2000 and still operates in Canada. It is a leader in the production of specialty metals and their compounds. The company offers production facilities and sales offices in Europe (2 plants in Germany and 1 plant in Belgium and the UK), North America (one plant in the USA and 1 plant in Canada) and Asia (1 plant in Hong Kong). The principal

office is located in Montreal. The company patented many developments in these fields. At the moment the production of the enterprise is targeted at bismuth, gallium, germanium, indium, selenium and tellurium, non-organic chemical substances on the basis of such metals and compounds of semiconducting substrates. From 2003 through 2011 the group was systematically building up a portfolio of assets, for instance by construction a plant for solar energy production in Germany or by acquiring MCP Group SA in 2011, which made 5NPlus a leader of the industry in North America, as well as acquisition of assets in Malaysia and China in 2012-2013. 1). The company's product line includes 10 key rate metals:

• Antimony; • Bismuth; • Cadmium; • Gallium; • Germanium; • Indium; • Selenium; • Tellurium; • Tin; • Zinc.

5NPlus produces substrates of germanium for the producers of solar energy systems components, producers of lens and chips. Thus, the produced germanium has little differences from the germanium produced by other companies described above. 2). Thus, the company offers such compounds as cadmium sulfide, cadmium telluride, indium antimonide and other. These combinations are used for the production of semiconductors. 3). The enterprise offers over 20 chemical compounds on the basis of rare metals for medical purposes; 4). The production of alloys with low melting temperature. Nominally, the group of companies is divided into two sectors: the sector of electronic materials and the sector of environmentally pure materials. As it is clear from the name, the segment of electronic

Name in English: 5NPlus Country: Канада Founded: 2000 The nature of participation at the market: Early germanium conversion (Ge, GeO2, GeCL4), metallurgy Germanium turnover in 2013: 9 tons Net profit in 2013: 43 million $

97

material includes materials used for electronic applications (cadmium, gallium, germanium, indium and tellurium). The segment of environmentally clean materials is related to the production of bismuth and its alloys, one of the few hard metals that do not environment and human health. This category also includes selenium and chemicals containing this element as well as low melting point metals used in pharmacology and industry. Diagram 5.29. The dynamics of 5N Plus group financial indicators in 2009-2013, million $69

There is interesting dynamics in the financial state of 5N Plus group of companies. Before 2010 the development of the group progressed smoothly without sharp turns. Yet, in 2011, the level of net margin fell down to 0%. After that it rose back to 9%. 2011 was a transitional year for the company, in terms of change of report periods, that is why the activity was equal to 0. The revenues from the manufactured products have the following structure. Diagram 5.30. Structure of 5N Plus revenues in 201370

Most of the manufactured products belong to the segment of environmentally clean materials such as bismuth, selenium and selenium containing chemicals as well as fast melting alloys - 61%. The electronic materials including germanium bring 39% in the share of the company's revenues.

69 Source: Data of the company's consolidated financial reports 70 Source: Data of the company's consolidated financial reports

98

Diagram 5.31. Structure of 5N Plus revenues across the countries in 201371

The highest share of shipments (18%) was made to the USA. Than comes Germany with 15% in the share of the profits. Chin ranks 3rd with 11%. There are interesting data on the company's markets presented on the basis of the opinions of the company's management. Table 5.32. The assessment of the global market of metal electronic materials in 201372.

Product Scope of the market, tons Cadmium 20 000 Gallium and chemicals 300 Germanium 100 Indium, chemicals and alloys 800 Tellurium and chemicals 550 Bismuth, chemicals and alloys 12 000 Selenium and chemicals 4 000

Like many other analytical agencies, the administration of 5N Plus assesses the scope of the world germanium market in 100 metric tons. The production of germanium is carried on 2 plants in Canada and the USA. From 2009 through 2013 the accrual of the company's domestic germanium production amounted to 40%.

71 Source: Data of the company's consolidated financial reports 72 Source: Data of 5N Plus management

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14. Yunnan Chihong Zinc-Germanium Co., Ltd. Founded in October 2000, Yunnan Chihong Zinc And Germanium Co., Ltd became the leading supplier of lead, zinc, germanium, cadmium and sulphur acid in the world. In 2013 the revenues of the company amounted to 18. billion CNY or 53 million USD. The principal aspect of the company's activity is mining and

production of non-ferrous metals. The group's product portfolio includes: • Zinc and alloys; • Lead and alloys; • Sulphur; • Gold; • Silver; • Lead; • Pure germanium; • Copper and its combinations; • Nickel, alloys and other.

The company also renders services to external companies launching new technologies at their sites. According to Reuters, in February 2014, the company created a subsidiary in Shanghai trading in ferrous and non-ferrous metals, as well as mineral and chemical products. The company's sales operations are not limited by China. To the contrary, it keeps on extending every other year. The activity of the group is divided by key products and geographical location. Yunnan Chihong owns assets in China, Malaysia, Australia, the USA and other regions in the world, managed by a headquarter company, named Yunnan Metallurgical (Group) General Company. It should be noted that this almost by half a state-run company with a 49.74% share owned by state authorities.

Name in English: Yunnan Chihong Zinc-Germanium Co., Ltd. Country: China Founded: 2000 The nature of participation at the market: Early germanium conversion (Ge, GeO2, GeCL4) Germanium turnover in 2013: ~40 tons Net profit in 2013: 53 million $

100

Diagram 5.33. Financial parameters of Yunnan Chihong in 2011-2013, million $73

In spite of galloping 2.6 growth of revenues, the level of net margin increased by just 2.8% in 3 years. The share of costs remains approximately on the same level. The company ranks 1st in the Chinese industry in terms of production of ore with the annual turnover of 3 million tons, 300 thousand tons of lead and zinc, 150 kg of gold, 180 tons of silver, 30 tons of germanium. The company also has facilities for mining and production of 400 thousand tons of rare metals, such rare metals as cadmium, bismuth, stibium and other.

73 Source: Analysis of Euroresearch and Consulting working group, reports of the company

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15. Yunnan Metallurgical (Group) General Company Yunnan Metallurgical (Group) General Company was founded as a trade and industrial company. 1997 saw reorganization and merge of 3 companies: Yunnan Metallurgy Group Corporation Holdings, Yunnan Aluminium Co., LTD and Yunnan Fanch Macro Zinc Germanium Joint Stock Limited Company. As a result, the company became the principal

exporter of metals on the territory of China. The total area of warehouses and industrial sites of the company is 24 thousand sqm. This is a commercial company, engaged in trading and logistics for the entire Yunnan group of companies. The principal fields of the company's activity include:

• International trade; • Trading at the domestic market; • Logistics services and support.

The company is totally state-run. The production enterprises do not exceed 50% in the share of its activities, for instance, in the structure of Yunnan Chihong Zinc-Germanium Co., Ltd., a company producing germanium and other non-ferrous metals. The state owns 49. 74% of the company's shares. It allows it producing a cardinal impact on the decisions of the management of the company, which is also appointed by the governmental structure.

Name in English: Yunnan Metallurgical (Group) General Company Country: China Founded: 1981 The nature of participation at the market: trader Net profit in 2013: - million $

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16. China Germanium Co., Ltd. China Germanium Co., Ltd. was founded in May 1960 and in 1972 it was renamed into Nanjing Germanium Factory. The works became one of the priorities of national development. The company specializes in conversion of specialty metals and researches in the field of new energy materials.

The products of the company are mainly used in infrared, optical industry for military and civil objective, space satellite technologies, highly efficient solar batteries, light diode illumination, telecommunications, fiber optics communications, micro electronics, LCD-displays, etc. At the moment the company is one of the few enterprises capable of producing germanium monocrystal on a large scale. The principal field of the company's activity is conversion and restoration of rare metals and alloys of such metals as germanium, indium and gallium, as well as other energy materials. The activity of the company includes the following key subdivisions:

• R&D, production and sales of new energy materials; • Production and melting or rare non-ferrous and precious metals of very high purity; • Production and sales of semi-conducting materials and organic germanium; • The export of rare metals and chemical products, manufactured by the company, as well as

import of raw and additional materials. In 2006 the company created Research Center for the problems of advanced energy materials development. The company has a production line for developing such metals as germanium, indium, gallium and other electronic and optical materials, alloys of high purity germanium, indium and gallium. The company produces germanium oxide (GeCO2) and germanium tetrachloride (GeCl4), аs well as crystal germanium. At the moment it has 5 subsidiary companies, each of them being responsible for individual segments. All the companies are based on the territory of China.

• Chine Germanium Co., Ltd.; • Nanjing Hope Technological Development Corporation; • Yangzhou Ningda Precious Metal Co., Ltd.; • Nanjing Sanyou Electronic Material Co., Ltd.; • Nanjing Chenhong Hydrogen Co., Ltd.; • Nanjing Jinmei Gallium Co., Ltd.; • Xilin-Gol Tongli Germanium Refine Co., Ltd.

The assortment of Germanium products includes:

• Granulated germanium ;

Name in English: China Germanium Co., Ltd. Country: China Founded: 1960 The nature of participation at the market: Early germanium conversion (Ge, GeO2, GeCL4), production of monocrystals Germanium turnover in 2013: ~40 tons Net profit in 2013: - million $

103

• Germanium powder; • Organic germanium; • Monocrystalline germanium; • Polycrystalline germanium; • Optical elements;

The geography of the company's sales encompasses the USA, Russia, Europe, Japan, Taiwan, Israel, Romania and other countries. As of 2013, the company launched a production of 140, 000 units of monocrystalline germanium.74

74 Source: PR Newswire news agency http://www.prnewswire.com/news-releases/2016-germanium-industry-and-zirconium-market-view-for-global-and-chinese-regions-280005862.html

http://www.prnewswire.com/news-releases/2016-germanium-industry-and-zirconium-market-view-for-global-and-chinese-regions-280005862.html

http://www.prnewswire.com/news-releases/2016-germanium-industry-and-zirconium-market-view-for-global-and-chinese-regions-280005862.html

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17. Axt, Inc. Twenty years ago Axt Inc. pioneered the commercialization of vertical gradient freeze for manufacturing compound semiconductor substrates. Since that time the technology has been substantially improved and ultimately the company makes use of its own patented method

of growing crystals for the production of semiconductor substrates, applied in various fields ranging from electronics to optics. Although its process and products are complex and technically sophisticated, its value message is elegantly straightforward - as expressed by tagline's three AXT attributes. They are: "Strength. Performance. Innovation". Each of them points to a certain advantage of the company. Thus, strength symbolizes a proprietary innovative crystal growth technology for semiconductors. Its customers that manufacture LEDs, electronic devices and power amplifiers report that its substrates have low defect rate and good material strength. Its technology achieves excellent diameter control, low axial and radial temperature gradient and excellent thermal dynamic stability. These advantages result in ultra-thin wafers greater than or equal to 100 microns. This is the proof of productivity. And today, Axt Inc. remains the only company to manufacture germanium substrates using vertical gradient freeze (VGF) technology. As substrates, the company also uses such elements as gallium, arsenic, indium and phosphorus. Such semiconductors offer opportunities outperforming silicon based wafers. This is a confirmation of innovation activity. Though AT & T Bell Labs were the first to develop VGF technologies in early 1980s, the founders of AXT, Inc were the first to commercialize it a make it available to the market.

Name in English: Axt, Inc. Country: the USA Founded: 1986 The nature of participation at the market: growing germanium monocrystals Germanium turnover in 2013: 9 tons Net profit in 2013: -8 million $

105

Figure 5.34. VGF technology scheme75

The biggest industrial asset is located in Beijing. The company also implements projects on configuration and launching plants in China. The production line includes the following items: - High-performance semiconductor substrates for electronic and optic applications: - Gallium arsenide (GaAs) substrates from two to six inch diameters. [Application: RF power amplifiers, integrated circuits for wireless phones (cell phones), live TV broadcasts, high performance transistors, satellite communications, high-power LED, lasers, MCO]; - Indium phosphide (InP) substrates in substrates from two to six inch diameters [Application: Broadband and optic fiber communications]; - Germanium (Ge) 2 and 4 inches. [Application: satellite and earth solar batteries, optic applications]; The sector of industry-critical raw materials production. It should be noted that AXT maintains a team of scientists, who focus on enhancing its products. Regular programs include germanium haze reduction, greater substrate strength, improved yield, enhanced surface and increased crystal length. The company is also investigating additional semiconductor substrate materials such as gallium nitride and silicon carbide.

75 Source: Site of Axt Inc.

106

Table 5.35. Structure of Axt Inc. joint holding of various companies in China76

Name of the company Product Share of ownership

Beijing Ji Ya Semiconductor Co. Ltd. 4NGa 46% Nanjing Jin Mei Gallium Co. Ltd. 6N & 7N Ga, B2O3 83% Xilingol Tongli Germanium Co. Ltd. Ge 25% Emeishan Jia Mei High Purity Materials Co. Ltd.

4N, 6N and 7N Arsenic 25%

Beijing Bo Yu Semiconductor Vessel Craftwork Technology

PBN crucibles, components for molecular beam epitaxy

70%

Axt Inc. has shares in the major producers of raw, necessary for manufacturing of its main products, semiconductor substrates, which makes it an absolute leader in the industry. The key indicators of the company’s financial state are presented below. Diagram 5.36. Key financial indicators of Axt Inc., million $77.

As you see, during the last 5 years the share of production cost in revenues soared to 86%, while the share of profits slumped to -9%. In 2013 the company suffered a loss of -8 million $. Top-10 buyers of Axt Inc. in 2013 are listed in the table below.


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Table 5.37. Top-10 buyers of Axt Inc. in 201378

No Name of the company 1 Azur Space Solar Power GmbH 2 Guangxi Debang Technology Co., Ltd 3 IQE Group 4 Landmark Optoelectronics Inc. 5 Molycorp Rare Metals Inc. 6 Nan Da Guang Dang 7 Osram Opto Semiconductors GmbH 8 Soitec Specialty Electronics 9 TianJin Sanan Optoelectronics Co. Ltd. 10 Visual Photonic Epitaxy Co.

78 Source: Data of the company's consolidated financial reports. 78 Source: Data of the company's consolidated financial reports..

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18. Germanium & Applications LLC Germanium & Applications LLC is a Russian company working on the market of materials and chemical products, used in high-technology applications in optics, electronics, chemistry, aerospace equipment, in telecommunications and solar power engineering. It is the biggest Russian producer and exporter of germanium blanks for optics and electronics.

Germanium & Applications LLC was formed as a vertically integrated company. It controls the production and enrichment of the initial Germanium containing raw and its further multistage conversion into qualified chemical products and material produces blanks and devices for various applications.

The company has the following industrial structure;

• open-pit mine in Pavlovskoye deposit of germanium-containing coal (Primorski Krai); • production of germanium concentrate (Primorski Krai); • chemical production of germanium (and zinc selenide (Novomoskovsk, Tula Region); • production of blanks (Moscow and Novomoskovsk)

The company's marketing service has its representative office in the USA and UK. The company is a participant of specialized international exhibitions. Its trademark is presented in Europe, North America and Asia. The company works on the market of materials and chemical products, used in high-technology applications in optics, electronics, chemistry, aerospace equipment, in telecommunications and solar power engineering.

The principal fileds of the company's activity are presented below:

1. Germanium blanks and devices (windows, prisms, lens, domes, hyper hemispheres, wafers and substrates);

2. Blanks of zinc selenide; 3. Germanium (polycrystalline and monocrystalline germanium, polycrystalline zone-purified

germanium, germanium in the form of powder and granules); 4. Chemical germanium compounds (GeO2, GeCl4); 5. Germanium raw and conversion of waste (germanium concentrate, services waste).

Germanium & Applications LLC Country: Russia Founded: 2004 The nature of participation at the market: early and/or secondary production of germanium in various forms Germanium turnover in 2013: up to 2,5-3 tons Net loss in 2013: -1,6 million $

109

Diagram 5.38. Dynamics of the financial results of Germanium & Applications LLC in 2009-2013, million rubles.79

After successful 2009, when the profits of the company amounted to 19 million rubles, a period of loss-making began. From 2010 through 2013, the net loss of the company soared from -38 million rubles to -71 million rubles. Yet, in 2013 the company won 2 big tenders totaling to 37.5 million rubles.

The company has the following organizational structure:

Figure 5.39. Organizational structure of Germanium & Applications LLC

79 Source: Data of the company's consolidated financial reports.

110

The historic reference of the company goes as follows:

• Entering the business – 2004; • The beginning of production and exporting activity – 2005; • Registration of Germanium & Applications LLC in Moscow – 2006; • Acquisition and mastering the raw base – 2007; • The beginning of the construction complex of the germanium concentrate – 2008; • Start in production activity with germanium materials – 2009; • Cooperation with RUSNANO - July 2010.

The company has the following ownership structure:

Table 5.40. Structure of Germanium & Applications LLC ownership

Name Share in statutory capital, rubles

Share in statutory capital, %

Igor Mikhailovich Melnichenko 190 481 000 46% RUSNANO OJSC 152 000 000 37% SAROKON INVESTMENTS LIMITED 73 627 000 18%

In 2013 the company took part in exhibition Photonics West 2013, which took part in the USA, where it presented its latest developments and products.

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19. Soitec S.A. Jean-Michel Lamure and André-Jacques Auberton-Hervé founded Soitec in 1992 to develop and commercialize the revolutionary “atomic scalpel” technology. Today, the principal type of the company's activity is generating and manufacturing revolutionary semiconductor materials for

electronic and energy industries.

Today Soitec is a truly international company, with R&D and industrial manufacturing activities in France, Germany, Singapore, and the United States. The client's base includes leaders in the in the field of energy and microelectronics, located on 5 continents of the Earth. More than 90% of revenues come from export supplies. Figure 5.41. The chart of prices for Soitec S. A. shares80.

The company is registered at stock exchange. During the last yea the cost of shares rose by 10.18%. Table 5.42. The amount of products sales in 201381

Key indicators 2011-2012 2012-2013 2013-2014 Revenues 323,4 262,9 247,1 Cost (273,1) (278,4) (302,8) Revenues from sales 50,4 (15,6) (55,7)

80 Source: Bloomberg. 81 Source: Analysis of Euroresearch and Consulting working group.

Name in English: Soitec S. A. Country: France Founded: 1992 The nature of participation at the market: production of devices on the basis of Germanium Net profit in 13/14: -249 million Euro

112

Key indicators 2011-2012 2012-2013 2013-2014 R&D costs (41,5) (48,2) (28,4) The share of developments expenses, % 13% 18% 11% EBITDA 19,2 (61,7) (79,1) Net profit/loss (50,6) (205,2) (248,5)

Currently the company faces a negative trend in its sales indicators. During 3 years the sales from revenues decreased by 24%, while losses surged by 4 times. This trend is explained by implementation of big large-scale projects. One of them is large-scale supply of products to South Africa. The design company implementing this project and forming part of Soitec, made a substantial contribution to the loss of the company; The principal products offered by the company include silicone plates performed under silicon on insulator (SOI) technology. The technology is based on manufacturing devices in using 3-layer substrate with silicon-dielectrics-silicon structure instead of monolith silicon wafers. This technology provides for substantial activity of microelectronic schemes and simultaneous decrease in the consumed power and overall sizes.82 The company offers them following solutions based on SOI technologies:

• Soitec FD-2D, Soitec FD-3D and Soitec Premium SOI™ for digital solutions; • Soitec Wave SOI™ for radio frequency and analogue devices; • Soitec Smart Power SOI™ for power and analogue devices; • Soitec Imager SOI™ for devices with sensor imaging.

Germanium is used as a substrate material for the compound of two pillars of semiconducting industry — silicon and germanium, SiGe. The practical results of this technology appeared in late 80s. The first bipolar transistor based on SiGe (when germanium is used as a material for the base) was demonstrated in 1987. In 1992 there appeared a possibility of using chips with SiGe transistors of standard technology with the resolution of 0.25 microns. In general the SOI technology with silicon as a base looks as follows. Germanium is often used as the base (Silicon substrate).

82 Source: Press service of IBM, http://researchweb.watson.ibm.com/journal/rd/462/shahidi.html.

http://researchweb.watson.ibm.com/journal/rd/462/shahidi.html

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Figure 5.43. Scheme of Silicon on insulator technology83

Soitec includes the following structural units: Works and factories for the production of silicon substrates (5 enterprises):

• San Diego, the USA; • Les Ulis, France; • Altatech, France; • Grenoble, France; • Singapore, Singapore

R&D centers (3 centers): • Phoenix, the USA; • Fribourg, Germany; • Grenoble, France.

Sales offices (12 offices – the USA, Chile, South Africa, France, Germany, Italy, Saudi Arabia, Taiwan, China, South Korea, Japan). It should also be noted that production in Singapore and Freiburg was suspended due to unfavorable financial situation in the company. As far as the other markets are concerned, apart from micro electronics, at which Soitec is working, they also include solar energy and LED. At the moment the company has several solar energy stations worldwide with the total power of 41 MW. In 2013 it tied partnership with Alstom for the launch of joint solar energy stations in France. It should be noted that the production of solar energy technology is also based on silicon and germanium semi-conductors. According to the latest Bloomberg data, the company is going to develop the market of RF devices for raising the power of the existing networks up to 4G/LTE standards. The first stage of the project has already been finished. Soitec produced the first lot of 1.4 billion semiconductor devices.


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20. Japan Algae Company Ltd. Japan Algae produces organic germanium for the market of Japan. The office of the company is located in Tokyo, Japan, which is the center of the company's trade and sales network. The company employs some 50 people. A significant distinction of the company from other manufacturer is that its products are used

exclusively for medical purposes, production of patented medications, approved by the Ministry of Agriculture of Japan. The chemical impact of organic germanium on human health is based on the activity of interferon, which is produced by the cells, when they are attacked by various viruses. Organic germanium is a product synthesized from algae. The company claims that apart from algae, the element is contained in ginseng, aloe, different kinds of mushrooms and other plants. The principal technological approach to the production of organic germanium is biochemical extraction of pure germanium from plant cells. Non-organic germanium described above is not meant for food consumption under any circumstances, while organic germanium produced by Japan Algae is meant for internal human consumption. Its key property is prevention of cancer and many other diseases. Apart from organic germanium, the company produces various dietary supplements on the basis of blue-green algae. The production started in 1988. The current sales model provides for sale of goods via internet trade and pharmacies. The company is rather strong in its segment at the Japanese market. At the moment it penetrates to the Asian market, the markets of North America and Europe. Currently the company has offices in 8 countries:

• South Korea; • Vietnam; • Cambodia; • Singapore; • Malaysia; • Hong Kong; • Taiwan; • Canada.

Its principal production and logistics office is located in the suburbs of Tokyo in Japan. The amount of sales reached some 10 million $.84

84 Source: Site about producers and suppliers http://www.alibaba.com/.

Name in English: Japan Algae Company Ltd. Country: Japan Founded: - The nature of participation at the market: Producer of germanium based devices Germanium turnover in 2013: - tons Net profit in 2013: 5-10 million $


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21. International Isotopes, Inc. The company was founded in 1995. The manufacture brings a variety of radio nuclear products for cancer therapy, nuclear medicine and industrial applications. International Isotopes, Inc. is represented by nuclear materials, necessary for the work of over

5 000 medical centers. The company is one of the two companies working on this market in the USA. Radioactive cobalt products are produced at the enterprise for further use in radio therapy and special radiation capsules. The products represented by International Isotopes, Inc. are used to create a radiation beam used for treatment of cancer patients. Apart from cobalt, the company offers a variety of radiochemical products for medical, industrial and research applications. These products are designed with regard to individual requirements of the customer. The list of available isotopes includes cobalt-60, cobalt-57, cesium-137, sodium-22 and barium-133, however, the most common radioisotope is iodine-131. Radioactive iodine is used for detection and treatment of thyroid cancer. At the moment the management of the company is implementing a project on building a new industrial center for the conversion of depleted uranium and production of fluorine including silicon tetrafluoride and boron triofluoride. These gases are used for ion-implantation and chemical deposition processes in electronic and oil industries. The license was received in 2012 and the project was commissioned in 2013/14. The works itself is located in Idaho, the USA. The technological scheme of the enterprise is represented at a figure below.

Name in English: International Isotopes, Inc. Country: США Founded: 1995 The nature of participation at the market: Trader Net profit in 2013: -2 million $

116

Figure 5.44. The scheme of fluoride production and depleted uranium conversion at the works of International Isotopes, Inc. in Idaho, the USA85.

The company also renders a number of related services, such as radiological design, consultations on the issues of physical health, while working with radioactive elements, supply of packing materials for transportation of radioactive materials and transportation itself. An example of specification of Cobalt-57 radioactive characteristics is presented in the table below. Table 5.45. Specification for Cobalt-57 at International Isotopes, Inc manufacture.86

Physical characteristics Half-life 271.8 Days

Form and concentration Chemical form: CoCl2 in 0.1 m HCL (Cobaltous Chloride) Radioactive concentration: >100 mCi/ml Specific Activity: >6000 mCi/mg of Cobalt Radionuclidic Purity: >99.9%; Combined Co56, Co58, Co60 is < 0.08%

Packaging, Shipping, Pricing Shipment available: Daily, Mon – Fri Packing: Per customer request Price: Per Milicurie

The principal financial indicators of the company' activity are submitted at the diagram below.

85 Source: The site of the company. 86 Source: The site of the company.

Mining Conversion

Enrichment Fuel fabrication

117

Diagram 5.46. The principal financial indicators of International Isotopes, Inc., million $87

During the last 4 years the company was smoothly abandoning the loss-making area. The net margin rate improved from -111% to -33%. The share of product costs in 2013 was on the level of 63%, while in 2009 it was 59%. The company shares the market of the US radioactive products with another company. Its share in the market is 50%. The structure of products sales is rather interesting. Table 5.47. The structure of products sold by International Isotopes, Inc. in 2012-201388

Products 2013 Share, % 2012 Share, % Radiochemical products 1 636 535 24% 1 677 291 22% Cobalt products 1 080 011 16% 1 369 130 18% Nuclear medicine 3 249 126 47% 4 169 710 55% Radiological services 763 980 11% 177 871 2% Fluorine products - 0% - 0% Logistics services 119 498 2% 227 932 3% Total 6 849 150 100% 7 621 934 100%

Nuclear medical products dominate the total volume of the company’s sales with the volume of 47%. Продукция для ядерной медицины преобладает в общем объеме реализации компании с долей 47%. Yet, in the previous year its share in the company's revenues was 55%. The change is due to growth in radiological services rendered by the company to industrial and other enterprises to 55% in in 2013, as compared to 2% in 2012.


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22. William Rowland Ltd. The company was founded by Mr. William Rowland in 1830. It is located in Sheffield, Birmingham. It has a rich history of 200 years. Starting form 1840, the company was engaged in the production of steel and afterwards expanded its activity to zinc and tin. In the late 20th century the company became an official

representative of another company trading in chromium in the UK. In 2003 became a wholly owned subsidiary of Amalgamated Metal Corporation (AMC) industrial group. In a general sense, William Rowland Ltd. is a UK-based trading company in the structure of AMC group. At the moment the company operates in 6 sectors offering over 80 items of metals and alloys. Its principal business activities include:

• Pure metals from aluminum to zinc (including germanium); • Metal powder (including germanium dioxide); • Alloys with low melting point (124оС); • Tin alloys; • Iron alloys; • Various modifiers for alloys and metals.

While assessing the financial state of the company, it is necessary to assess the entire state of AMC group. AMC group includes 9 industrial enterprises for mining and production of steel, tin, copper, aluminum and m their alloys. It has 10 trading companies located worldwide including William Rowland Ltd. The holding itself is a major supplier of raw for deep processors of metals and enterprises of the related fields. In 2013 38% of the company's revenues were generated by trading sector (including William Rowland Ltd.). The other 62% belongs to production. This is 2% more than the year before. The share of revenues received in the UK and continent Europe is 46%. The rest belongs to the Eastern region.

Name in English: William RowlandLtd. Country: the UK Founded: 1830 The nature of participation at the market: Trader Net profit in 2013: 14 million ₤

119

Diagram 5.48. Structure of revenues of AMC group in 2012-2013 across the regions89

The structure of sales shifted a bit from European region to Asia and Australia -4%. The financial results of the group are presented below. Diagram 5.49. Dynamics of the financial results of AMC group in 2009-2013, million pounds90


120

23. GFI Advanced Technologies, Inc. The company is registered and operates in New York, the USA, from 1987. Its principal activity is production of high purity metals and chemicals to semiconductor, optics, laser electro-optics industries, solar energy and other types of alternative energy.

Today the company is a major trade company offering high purity metals and products:

• Aluminum fluorine; • High purity antimony metal; • Bismuth trioxide; • Calcium fluoride; • Gadolinium oxide; • Gallium metal and its chemicals; • Germanium dioxide; • Germanium; • Indium; • Lanthanum oxide; • Rare metals; • Rutile; • Strontium carbonate; • Terbium oxide; • Tungsten oxide; • Yttrium fluoride.

It should be noted that the company is engaged is engaged in development and production of rather rare metals and chemical compounds on their basis. In 2007 the sales of the company amounted to 7 million USD91. At the moment the revenues of the company are assessed from 5 to 10 million $. Dioxide germanium is produced according to an internationally recognized technology. The company ha has an equipped laboratory and a warehouse for storing ready-made products. Starting from 2007, it has been leading an active international trade. The volumes of sales in 2013 amounted to 5-10 million $.92

91 Source: Site about producers and consumers http://www.alibaba.com/. 92 Source: Site about producers and consumers http://www.alibaba.com/.

Name in English: GFI Advanced Technologies, Inc. Country: the USA Founded: 1987 The nature of participation at the market: Tradee Net profit in 2013: 5-10 million $



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24. Applied Materials, Inc. The company was founded in 1967 in the USA. At the moment Applied Materials is a public company engaged in supplies of engineering equipment and solutions for the semiconductor, flat panel display and solar photovoltaic (PV) and other related industries. The company's key operations include:

• Development of semiconductor systems; • Rendering global services on software installation and support; • Developments for the producers of LCD displays; • Energy and environmental solution.

Germanium is used for the performance of chemical-physical process, necessary in the production of silicon semiconductor and elements applied in displays manufacture. Table 5.50. The amount of sales in 2013 across the regions93.

Sales region The amount of sales, million $ Share, %

Taiwan 2 640 35% China 787 10% Korea 924 12% Japan 685 9% South-Eastern Asia 320 4% Asian Pacific Region 5 356 71% the USA 1 473 20% Europe 680 9% Total 7 509 100%

The principal sales market for the company is Asian-Pacific region, especially Taiwan with the sales share of 35%. Next comes the USA with a 20% share of sales of It should be noted that 2/3 of all sales are occupied by semiconductors (64%). Table 5.51. The amount of sales products in 2013 across the categories94.

Category Amount of sales, million $ Share, % Semiconductors 4 775 64% Global services 2 023 27% LCD displays 538 7% Energy and environmental solutions 173 2% Total 7 509 100%

93 Source: Analysis of Euroresearch and Consulting working group. 94 Source: Analysis of Euroresearch and Consulting working group.

Name in English: Applied Materials, Inc. Country: the USA Founded: 1967 The nature of participation at the market: Consumer of germanium based products Net profit in 2013: 279 million $

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The company is not a producer of germanium, but is a consumer of one of its constituent components SiGe (monocrystalline germanium). The surface of the mechanically polished germanium is covered with a thin oxide film. The elements of monocrystalline germanium are produced in the form of wafer with big facets in the form of parallelogram or trapezoid. Applied Materials, Inc. uses this material for the production of display components. According to the company's press service, back in 2004, the company engaged in a strategic partnership with Soitec for the development of germanium-based processes designed to significantly enhance transistor performance at 45 nm and beyond technology nodes. . According to Bloomberg, in 2013 the company made the biggest deal in the history of Japanese economy having acquired Tokyo Electron Ltd. for 9.39 billion USD. The company annually invests in the production of new and enhancement of the existing engineering products. Diagram 5.52. The amount of investment in innovation development in 2011-2013, million $95

Prices on Applied Materials, Inc. have grown by 26.11% during the last year.

95 Source: The annual report of Applied Materials.

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Figure 5.53. The chart of prices for the shares of the Applied Materials, Inc.96

96 Source: Bloomberg.

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CHAPTER 6. THE ANALYSIS OF INDIVIDUAL GERMANIUM MARKETS

6.1 THE UNITED STATES

A. MARKET ANALYSIS

The US market for Germanium is expected to witness steady growth in the years ahead owing to growing demand from end-use industries such as fiber optic systems followed by electronics/solar and infrared optics applications in the region. In order to meet the ever-increasing demand for Germanium, the region is heavily dependent on imports primarily from China and Russia.

Despite having world's richest ore reserves, the US registered minimal production of Germanium. In comparison to China's reserves that account for 41% of global Germanium resource, the US reserves account for about 45% of total global resources. However, the global output of Germanium from China equals to nearly 70% of global production, while the US output accounts for a mere 3% share. Hence, the US is largely dependent on imports for meeting regional demand.

Current & Future Analysis

Germanium market in the US is estimated at 36.8 thousand kilograms in 2014, and is expected to reach 39 thousand kilograms by 2015. Registering a compounded annual growth rate (CAGR) of about 5.2% over the period 2013-2020, the market is projected to reach about 49.65 thousand kilograms by 2020.

Fiber optic systems represent the largest and the fastest growing end-use application for Germanium, accounting for an estimated share of about 41.4% in 2014. Consumption of germanium in Fiber optic systems segment is estimated at 15.25 thousand kilograms in 2014 and is projected to reach 21.5 thousand kilograms by 2020, registering a CAGR of 6.3% over the period 2013-2020.

Sources of Germanium in the US

Germanium is a strong, brittle semimetal, which was initially utilized as a semiconductor substance in radar units as well as in making transistors. In recent times, germanium is by and large used in polymerization catalysts in fiber optic cables for telecommunications, windows or lenses in infrared night-vision equipment and semiconductors and as a substrate in solar cells and electronic circuitry. Domestically, germanium intermediates are extracted from zinc concentrates at a Tennessee based smelter. Secondary germanium was initially extracted through secondary processes from retired products, including thermal weapon sights and decommissioned military vans. Germanium produced from various processes results in producing germanium metal and different germanium compounds that are used in specific applications. Basically, germanium is recovered through leaching zinc residues from coal ash or zinc refining, while the resulting germanium concentrate is subsequently precipitated. Purification techniques are almost same for all germanium concentrates. The concentrated germanium is subject to chlorination and distillation to yield the foremost usable product called germanium tetrachloride, which is a colorless liquid with primary use as a reagent in the production of fiber-optic cables.

Upon hydrolysis and subsequent drying, germanium tetrachloride produces germanium dioxide, a white powdery compound with several common uses. The compound finds applications in the

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manufacture of specific varieties of optical lenses as well as a catalyst in the manufacture of PET resin. Reduction of germanium dioxide using hydrogen produces a germanium metal powder that is further melted and cast into first reduction bars. The bars are subsequently zone-refined (a process of refinement comprising melting as well as cooling of germanium bars to separate and discard impurities and finally to yield highly pure germanium) to result in electronic-grade germanium metal. Such metal can subsequently be developed into crystals as well as sliced for semiconductor applications or recast into molds for use in window blanks or lenses in infrared optical systems.

Table 6.1: US Germanium Refinery Production (2006-2012) (in kilograms)

Source: U.S. Geological Survey

Recycling....

More than half of germanium consumed in manufacture of electronic and optical devices is recycled as new scrap in the US. As only a little amount of germanium is used in microelectronic devices, trace returns of the metal are generated through old scrap.

Pricing Scenario

Zone refined germanium price has been considerable escalating over the past few years. Price of zone refined germanium increased from about US$1200 per kilogram in 2010 to about US$1875 per kg in 2013. Germanium Dioxide, electronic grade also registered an increase in price growing from US$720 per kg in 2010 to US$1360 per kg in 2012. However, electronic grade germanium dioxide price witnessed a marginal decline in the year 2013 and reached US$1340 per kg.

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Table 6.2: US Germanium Market (2010-2013): Prices for Zone Refined and Dioxide (Electronic Grade) in US$ per Kilogram

Prices 2010 2011 2012 2013

Zone Refined 1200 1450 1640 1875

Dioxide (Electronic Grade) 720 1250 1360 1340


Import and Export Scenario

Table 6.3: US Imports of Germanium for the Years 2007 through 2013 in Kilograms


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Table 6.4: US Exports of Germanium for the Years 2007 through 2013 in Kilograms


Table 6.5: US Exports of Germanium Oxides and Zirconium Dioxide (2012 & 2013): Percentage Breakdown of Export Value by Destination Country

Country 2012 2013 Canada 11.62 12.47 Japan 9.98 12.40 Germany 12.03 11.31 India 5.66 9.83 China 14.30 6.79 Belgium 6.50 6.61 Taiwan 8.25 5.65 Mexico 3.98 4.60 South Korea 4.60 4.56 UK 1.47 4.29 Others 21.61 21.49 Total 100.00 100.00

Data Source: Statistics Canada & US Census Bureau

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Table 6.6: US Imports of Germanium Oxides and Zirconium Dioxide (2012 & 2013): Percentage Breakdown of Import Value by Country of Origin

Country 2012 2013 China 42.79 37.88 UK 14.81 11.64 France 10.95 10.16 Hong Kong 0.89 9.82 Canada 12.40 7.99 Finland 3.48 7.27 Japan 6.51 5.52 Belgium 2.04 4.06 Germany 2.29 2.44 Russia 2.21 2.39 Others 1.63 0.83 Total 100.00 100.00


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PRODUCT LAUNCH

2013

NATS Launches Hawk Gamma Spectrometer

NATS Inc., a US-based company, launched Hawk, a lightweight, affordable gamma spectrometer that is based on an advanced, high-resolution germanium detector (HPGe). The reliable, compact solution is designed to address various limitations such as failure-prone parts, weight and high cost of the existing products. The new system offers a comprehensive functionality as delivered by laboratory-grade spectroscopy systems. The Hawk features a digital 16K MCA with full electronics, data capturing system, and analytics software. The battery-powered device power-efficient, and uses small quantity of liquid nitrogen reservoir to deliver an uninterrupted 20 hours performance without requiring recharging or battery swapping. In addition, the LCD touchscreen makes it convenient to change settings and operate the spectrometer. The device also enables researchers to use EFFCAL software for conducting mathematical estimations of intricate geometries through the Monte Carlo Neutron Transport Code (MCNP) based efficiency modeling.

NATS, Inc. is one of the leading providers of sophisticated solutions for the detection and analysis of nuclear radiation. The company's solutions are widely used for radiation dosimetry, nuclear spectroscopy, environmental analysis, medical and health physics applications. NATS also offers various instruments and personalized designs for next-generation systems as well as integrates products through the US and Europe based partners with expertise in radiations. The company's systems are used by customs and border patrol, homeland security agencies, hospitals, national atomic energy agencies, nuclear power plants, nuclear regulatory agencies and research establishments.

STRATEGIC CORPORATE DEVELOPMENTS

2013

Air Liquide to Take Over Voltaix

Air Liquide announced plans to take over Voltaix Inc., an electronics materials company based in the US. The acquisition would complement the ALOHA products of Air Liquide, and would provide a broader portfolio. The deal would combine the synergies of both the companies in molecule discovery, as well as speed up the introduction of advanced materials, increasing connectivity and computing power. The deal would integrate the expertise and resources of both the companies; and would enhance Air Liquide's presence across the globe.

Air Liquide is a leading manufacturer of precursors for semiconductors. Precursors are molecules with definite chemical and physical properties used to deposit critical layers during the fabrication process of microelectronic devices. The company designs, screens, and industrializes precursors in corporation with leading semiconductor industries as well as process tool makers. Voltaix, Inc. manufactures materials for producing solar cells and semiconductor devices. The company operates several manufacturing facilities in the US located in New Jersey, Florida and Pennsylvania; as well as in South Korea.

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Voltaix is engaged in manufacturing specialty chemicals such as germanium, silicon, boron, organosilanes, deuterated compounds, isotopically enriched compounds, phosphorous, and carrier gas options, among others.

2012

GigOptix Inks Licensing Agreement with IBM

GigOptix, Inc. inked a licensing agreement with International Business Machines (IBM) Corporation for integrating the latter's silicon germanium (SiGe) millimeter wave transceiver technology with its portfolio of E-band wireless solutions, including the newly introduced E-band power amplifier. SiGe enables high level integration with the existing gallium arsenide (GaAs) solutions, while reducing the power consumption and footprint of final solution. The move would allow GigOptix to achieve a highly integrated and scalable silicon germanium RF platform for upgrading its technological solutions including E-band transceivers. In addition, the combination of IBM's SiGe with high power GaAs amplifiers and millimeter wave packaging of GigOptix would enable high data rates and spectral efficiencies demanded by network operators for their wireless mobile backhaul networks.

GigOptix Inc., a US-based fabless supplier, is engaged in providing optical and semiconductor components for facilitating high-speed data traffic on mobile devices. The company's solutions are widely adopted in the telecommunications, avionics, defense and industrial sectors. GigOptix TIAs, TFPS optical modulators and drivers for 40G, 100G and 400G data-communications and fiber-optic telecommunications, as well as MMIC solutions allow up to 90GHz wireless microwave systems.

Indium Takes Over Manufacturing Facility in New York

Indium Corporation took over a new manufacturing plant that is located in Rome, New York, US. The facility is outfitted to extend the existing manufacturing capacity of Indium's family of germanium-, gallium-, tin- and indium-based compounds. The move is in line with the company's strategy to install sophisticated equipment, technologies and analytical capabilities for addressing the increasing demand for high-performance materials. The acquisition would enable Indium to offer quality materials to a large number of industrial segments including semiconductor, solar photovoltaic, LED, optical fiber and flat panel display. In addition, the company would be able to convert various feed materials into high-quality and purity compounds.

Indium Corporation is one of the leading providers of high-purity materials including germanium, gallium, indium and tin compounds as well as brazes, Reactive NanoFoil®, performs and fluxes to serve the semiconductor, electronics, thin-film, thermal management and solar markets. Founded in the year 1934, Indium manages high-tech facilities in the US, the UK, South Korea, China and Singapore.

Umicore Announces Plans to Consolidate Germanium Optics Manufacturing in US

Umicore N.V., a Belgium-based materials technology company, announced plans to consolidate manufacturing of germanium-based optics solutions in the US. The company would phase out the production in Olen, Belgium and consolidate manufacturing in Quapaw, Oklahoma for tapping the strong demand for thermal imaging systems, an end-user of germanium-based optics products, in the US.

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2011

Sparton Energy Signs MoLI with Voltaix

Sparton Energy Inc., a subsidiary of Sparton Resources Inc., signed a Memorandum of Understanding (Moll) with Voltaix LLC, a leading producer of specialty materials based in the US. As per the deal, Sparton Energy would sell all its germanium production to Voltaix through the Huajun Mine. Sparton Energy would continue to supply germanium dioxide (Ge02) to Voltaix throughout the life of the Strategic Supply Agreement. The money received through the deal would be used by Sparton Energy for purposes such as efficiency improvements and safety upgrades that would enhance the production rates of the Huajun Mine. All the necessary security and safety upgrades required in the mine to address the regulatory requirements of China are completed. The reactivation of the operations would commence subsequent to the issue of new mining license.

Umicore to Centralize Production of Germanium-based Optics Products in Quapaw

Umicore voiced plans to centralize the production of germanium-based optics products at its Quapaw facility in Oklahoma. Consequent to the consolidation of production, manufacturing at Umicore's optics production facility in Olen, Belgium would be stopped and the production would be moved to Quapaw.

Umicore's decision to consolidate manufacturing in the US facility is on account of the fact that the demand for its optics products is slowing down. As a consequence of the lower demand, Umicore needed to decrease its capacity and since the company's optics products market is primarily in the US, the company decided to centralize its production at the US facility by phasing out the Belgium facility.

KEY PLAYERS

GFI Advanced Technologies Inc.

GFI Advanced Technologies Inc. (GFI), founded in 1987, is a leading supplier of high-purity metals and custom optical materials and components, which includes domes, crystals, lenses and windows for the IR and UV, and superconductor substrates. Based in Teaneck, New Jersey, GFI specializes in germanium, indium, gallium, CaF2, poly-silicon, and GaP.

The company offers germanium metal, germanium dioxide, gallium metal, gallium oxide, and gallium nitrate, among others. GFI's products include acousto-optic crystals, high-purity elements, gallium-based semiconductor materials, gallium-based semiconductor single crystals, germanium, single-crystal germanium, indium plate and rod, indium-based semiconductor single crystals, infrared materials, metal powders, high-purity niobium foil, niobium plate and rod, infrared optical components, ultraviolet optical components, custom optics, single crystal oxides, sapphire, scintillators, silicon, single-crystal superconducting materials, tantalum foil, and tungsten plate and rod. GFI's products find applications in electro-optics, solar and semiconductor industries.

Indium Corporation

Indium Corporation is a leading producer and supplier of materials to the worldwide semiconductor, electronics, thin film, thermal management and solar markets. The company offers a comprehensive

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array of products, which include metals, inorganic compounds, solders, solder paste and powders, solar assembly materials, thermal interface materials, flux and epoxies, thin-film materials, NanoFoil, and reclaim and recycle materials. Under the metals product line, the company offers high purity and commercial indium, germanium, tin and gallium metals. Germanium product offerings include refined germanium and germanium compounds, including germanium oxide and germanium tetrachloride.

Indium Corporation, founded in the year 1934, is headquartered at Clinton, New York. The company operates 11 manufacturing facilities and technical support services in various countries including the US, the UK, China, South Korea, and Singapore.

Novotech, Inc.

Novotech, Inc. is one of the leading global suppliers of semiconductor materials and infrared optical solutions. The company is primarily engaged in providing a broad range of infrared germanium products such as coated optics, and ingots. In addition, Novotech offers various polishing facilities for semiconductors ranging from CMP polishing to slicing. The company upgrades materials purchased from source, thereby providing cost-effective solutions for consumers in comparison to other competitors. Novotech provides optical grade germanium in polycrystalline and mono forms. The n-type standard germanium features resistivity in range of 4-40 ohm.cm; and absorption coefficient of around .035 cm-1 at 10.6 m at 25 С The company's optical Grade Germanium is available in three shapes rectangular and odd shaped blanks, piano round blanks, as well as curve generated blanks.

Voltaix, LLC

Voltaix LLC, a New Jersey-based electronic chemicals enterprise, is engaged in manufacturing specialty chemicals and gases to serve the semiconductor deposition sector. The company product portfolio comprises germanium, phosphorous boron, silicon, organosilanes, isotopically enriched compounds, carrier and other gases, and deuterated compounds. Voltaix also markets isotopically enriched compounds such as trimethylboron, germanium tetrafluoride, diborane and boron trifluoride. Germanium products offered by Voltaix include germane, germane mixtures, germanium tetrafluoride, digermane, digermane mixtures and solar grade germane.

Voltaix LLC, established in the year 1986, operates as the subsidiary of Air Liquide Tunisie SA since 2013.

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В. MARKET ANALYTICS

Table 6.7: US Recent Past, Current & Future Analysis for Germanium by End-Use Application - Fiber Optic Systems, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2013 through 2020

End-Use Application 2013 2014 2015 2016 2017 2018 2019 2020 % CAGR

Fiber Optic Systems 14,022.3 15,245.0 16,463.1 17,585.9 18,649.8 19,653.2 20,606.4 21,517.2 6.3 Infrared Optics 12,781.3 13,117.4 13,558.1 14,099.1 14,727.9 15,451.0 16,257.5 17,127.3 4.3

Electronics/Solar Applications 6,113.5 6,456.5 6,855.5 7,260.7 7,656.4 8,015.5 8,351.3 8,680.3 5.1

Others* 1,931.6 2,006.5 2,077.3 2,140.4 2,198.0 2,247.5 2,292.9 2,328.4 2.7 Total 34,848.7 36,825.4 38,954.0 41,086.1 43,232.1 45,367.2 47,508.1 49,653.2 5.2 2014: GIA Estimates 2015-2020: GIA Projections Error tolerance for data in this table is 10% (+/-) Data is reported at the Manufacturer's Level (*) Includes Phosphors, Metallurgy, and Chemotherapy among others

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Table 6.8: US Historic Review for Germanium by End-Use Application - Fiber Optic Systems, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2006 through 2012

End-Use Application 2006 2007 2008 2009 2010 2011 2012 % CAGR

Fiber Optic Systems 14,881.3 16,039.1 14,517.0 12,160.9 11,119.9 10,095.8 10,565.3 -5.6

Infrared Optics 21,703.6 28,761.6 25,318.8 20,353.8 18,369.3 16,490.1 17,080.4 -3.9

Electronics/Solar Applications 8,762.9 7,381.0 6,724.8 5,801.5 5,459.8 5,029.6 5,287.1 -8.1

Others* 4,075.4 2,395.1 2,226.2 1,882.0 1,787.5 1,671.0 1,719.6 -13.4

Total 49,423.2 54,576.8 48,786.8 40,198.2 36,736.5 33,286.5 34,652.4 -5.8

Error tolerance for data in this table is 10% (+/-) Data is reported at the Manufacturer’s Level (*) Includes Phosphors, Metallurgy, and Chemotherapy among others

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Table 6.9: US 15-Year Perspective for Germanium by End-Use Application - Percentage Breakdown of Consumption Volume for Fiber Optic Systems, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets for Years 2006, 2014 & 2020

End-Use Application 2006 2014 2020

Fiber Optic Systems 30.11 41.40 43.34

Infrared Optics 43.91 35.62 34.49

Electronics/Solar Applications 17.73 17.53 17.48

Others* 8.25 5.45 4.69

Total 100.00 100.00 100.00 Data is reported at the Manufacturer's Level (*) Includes Phosphors, Metallurgy, and Chemotherapy among others

Fiber Optic Systems Infrared Optics Electronics/Solar Applications Others

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6.2 CANADA

A. MARKET ANALYSIS

Current and Future Analysis

Canadian market for Germanium is estimated to be 2.8 thousand kilograms in 2014, and is expected to reach about 2.95 thousand kilograms by 2015. Growing at a compounded annual rate of 4.8% over the period 2013-2020, the market is projected to reach about 3.7 thousand kilograms by 2020.

Infrared Optics represents the largest end-use application for Germanium, accounting for a share of about 39.9%, estimated for 2014. Germanium consumption in Infrared Optics is estimated to be 1.12 thousand kilograms in the year 2014 and is projected to reach 1.46 thousand kilograms by 2020, registering a CAGR of 4.2% during the analysis period 2013-2020. Fiber Optic Systems occupies the next position with 31.65% share for the year 2014. Germanium consumption in Fiber optic systems, the fastest growing end-use application, is projected to reach 1.23 thousand kilograms by 2020, reflecting a CAGR of about 5.9% over the period 2013-2020.

Import & Export Scenario

Table 6.10: Canadian Exports of Germanium Oxides and Zirconium Dioxide (2012 & 2013): Percentage Breakdown of Annual Export Value by Destination Country

Country 2012 2013 Japan 56.93 59.21 United States 23.07 16.55 Taiwan 2.89 14.79 South Korea 8.53 8.28 Italy 0.19 0.33 Poland 0.24 0.32 Germany 6.62 0.25 India 0.04 0.15 France 0.21 0.11 Spain 0.00 0.01 Others 1.28 0.00 Total 100.00 100.00


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Table 6.11: Canadian Imports of Germanium Oxides and Zirconium Dioxide (2012 & 2013): Percentage Breakdown of Annual Import Value by Country of Origin

Country 2012 2013 United States 49.26 57.10 Japan 28.85 39.81 Germany 2.39 1.36 China 9.97 0.85 United Kingdom 2.43 0.50 Switzerland 0.27 0.16 Netherlands 0.00 0.11 Korea, South 0.02 0.05 Ireland 0.00 0.03 South Africa 0.90 0.03 Others 5.91 0.00 Total 100.00 100.00


TECK RESOURCES LIMITED – A KEY PLAYER

Teck Resources Limited (Teck), formerly known as Teck Cominco Ltd., is a diversified chemical, mining and refining company with business interest in mineral exploration, mining, refining, and product and process research. Teck is one of the leading global producers of indium, germanium and cadmium. The company offers Specialty Metals, Precious Metals, Advanced Materials, Concentrates, Industrial Chemicals, and Fertilizer & Sulphur Products. The company’s germanium product offerings include technical grade and fast dissolving grade germanium dioxide powder; germanium tetrachloride; and germanium based PET catalysts. Teck also provides onsite and offsite germanium recycling solutions for its customers.

The company’s division located at Trail (British Columbia) is involved in production of germanium, refined zinc, lead, copper, metallurgical coal, silver, bismuth, cadmium, gallium, gold, indium, molybdenum, and other metals, as well as fertilizers. Teck offers 14 primary elements in different

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forms. In addition to its core business, the company offers specialized services such as product development, raw material supplies and recycling.

Teck Resources Limited is headquartered in Vancouver, Canada, and owns or has interest in 13 mines located in Canada, Peru, Chile and the US.

B. MARKET ANALYTICS

Table 6.12: Canadian Recent Past, Current & Future Analysis for Germanium by End-Use Application - Fiber Optic Systems, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2013 through 2020


Fiber Optic Systems 821.6 888.0 954.1 1,015.1 1,073.1 1,127.9 1,178.1 1,225.5 5.9

Infrared Optics 1,091.7 1,120.7 1,157.8 1,202.7 1,254.3 1,314.4 1,381.7 1,456.7 4.2

Electronics/Solar Applications 516.9 544.4 576.1 608.2 638.6 667.3 694.3 720.9 4.9

Others# 243.0 252.8 262.2 270.9 279.0 286.2 292.3 297.2 2.9

Total 2,673.2 2,805.9 2,950.2 3,096.9 3,245.0 3,395.8 3,546.4 3,700.3 4.8

2014: GIA Estimates 2015-2020: GIA Projections Error tolerance for data in this table is 10% (+/-) Data is reported at the Manufacturer’s Level (#) Includes Phosphors, Metallurgy, Chemotherapy, and Polymerization Catalysts among Others

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Table 6.13: Canadian Historic Review for Germanium by End-Use Application – Fiber Optic Systems, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2006 through 2012


Fiber Optic Systems 1,011.8 1,083.4 989.8 843.8 778.1 712.9 743.1 -5.0

Infrared Optics 1,481.2 1,919.5 1,710.5 1,405.2 1,280.6 1,161.4 1,199.3 -3.5

Electronics/Solar Applications

721.3 617.8 567.8 496.9 470.3 436.6 456.9 -7.3

Others# 488.5 305.2 285.6 245.4 234.2 218.8 224.6 -12.2

Total 3,702.8 3,925.9 3,553.7 2,991.3 2,763.2 2,529.7 2,623.9 -5.6 Error tolerance for data in this table is 10% (+/-) Data is reported at the Manufacturer’s Level (#) Includes Phosphors, Metallurgy, Chemotherapy, and Polymerization Catalysts among Others.

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Table 6.14: Canadian 15-Year Perspective for Germanium by End-Use Application - Percentage Breakdown of Consumption Volume for Fiber Optic Systems, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets for Years 2006, 2014 & 2020





Others# 13.19 9.01 8.03

Total 100.00 100.00 100.00

Data is reported at the Manufacturer’s Level (#) Includes Phosphors, Metallurgy, Chemotherapy, and Polymerization Catalysts among Others.

Fiber Optic Systems Infrared Optics Electronics/Solar Applications Others

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6.3 JAPAN

A. MARKET ANALYSIS


Japanese market for Germanium is estimated to be 17.12 thousand kilograms in 2014. Registering a CAGR of 0.1% over the period 2013-2020, the market is projected to reach about 17.5 thousand kilograms by 2020.

Polymerization Catalysts represented the largest end-use application for Germanium, and accounted for 46.58% of share in 2014. However, the segment is expected to witness a decline and loose its share to 26.31% by 2020. On the other hand, Fiber Optic Systems is expected to emerge as largest end-use application for Germanium with consumption projected to reach 6.6 thousand kilograms by 2020. Electronics/Solar Applications is expected to register fastest CAGR of 8.2%, during the analysis period 2013-2020, with germanium consumption in the end-use application projected to reach 2.4 thousand kilograms by 2020, from an estimated 1.4 thousand kilograms in 2014.

Car Safety Systems to Spur Growth

With Japan leading the global market for car safety systems such as Adaptive Cruise Control systems and other active car safety systems, Germanium usage in infrared optics in the region is expected to increase significantly in the near future.

PRODUCT LAUNCH

2013

IMEC, AIST and Katholiek University of Leuven Develop New Technique

IMEC, Leuven-based research institute, Japan's National Institute of Advanced Industrial Science and Technology (AIST) and the Katholiek University of Leuven developed an advanced solid phase epitaxy technique for integrating germanium-tin (GeSn) MOSFETs on silicon. The new technique improves germanium's solubility with tin, and assists scientists in integrating GeSn transistors on silicon substrates for CMOS processes. By enhancing the hole and electron mobility as well as reducing the differences between direct and indirect transitions, the technique enables materials to exhibit properties similar to a direct band gap material. The innovative approach would play a major role in manufacturing faster optoelectronics and electronics devices, including GeSn photodetectors, for optical communications.

JAPAN ALGAE CO., LTD. - A KEY PLAYER

Japan Algae Co., Ltd. is one of the leading producers and distributors of superior solutions based on biotechnology and chemical technology. The company primarily operates in two segments spirulina, a highly-nutritious algae food, and organic germanium. Japan Algae offers superior spirulina at an affordable-price as compared to its other counterparts. Moreover, the company also holds a leading position in manufacturing spirulina blue food coloring. Japan Algae's superior range of (Ge-132)

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organic germanium assists in activating lymphocytes, macrophages, and NK cells for protecting body from various virus attacks. Battery enhancer utilizes superior semiconductor and water soluble characteristics of organic germanium for improving durability, preventing deterioration, and increasing capabilities of batteries. Some of the major features of battery enhancer include shorter recharging time; immediate battery start up; and convenience in handling.

B. MARKET ANALYTICS

Table 6.15: Japanese Recent Past, Current & Future Analysis for Germanium by End-Use Application - Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2013 through 2020


Fiber Optic Systems 4,518.1 4,737.7 4,986.4 5,253.7 5,555.3 5,883.6 6,224.3 6,570.4 5.5

Polymerization Catalysts 8,633.0 7,972.6 7,336.4 6,719.4 6,138.2 5,596.8 5,081.3 4,603.1 -8.6

Infrared Optics 1,542.8 1,603.4 1,672.7 1,750.8 1,837.5 1,933.1 2,029.6 2,125.8 4.7


1,380.5 1,444.8 1,529.6 1,658.9 1,816.0 1,999.8 2,194.0 2,389.3 8.2

Others* 1,302.7 1,357.3 1,419.2 1,488.3 1,564.5 1,646.3 1,727.8 1,806.2 4.8

Total 17,377.1 17,115.8 16,944.3 16,871.1 16,911.5 17,059.6 17,257.0 17,494.8 0.1

2014: GIA Estimates 2015-2020: GIA Projections Error tolerance for data in this table is 10% (+/-) Data is reported at the Manufacturer’s Level (*) Includes Phosphors, Metallurgy, and Chemotherapy among others

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Table 6.16: Japanese Historic Review for Germanium by End-Use Application – Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2006 through 2012


Fiber Optic Systems 3,034.7 3,164.0 3,243.4 3,653.7 3,548.1 3,417.5 4,331.0 6.1

Polymerization Catalysts 12,788.8 13,043.3 11,376.4 8,127.3 6,067.0 8,711.6 9,284.8 -5.2

Infrared Optics 1,188.3 1,235.4 1,260.4 1,314.9 1,384.5 1,428.4 1,493.4 3.9

Electronics/Solar Applications 1,400.6 1,433.1 1,453.9 1,368.3 1,336.3 1,293.4 1,327.7 -0.9

Others* 1,329.7 1,371.5 1,385.6 1,312.7 1,268.7 1,216.3 1,255.6 -1.0

Total 19,742.1 20,247.3 18,719.7 15,776.9 13,604.6 16,067.2 17,692.5 -1.8

Error tolerance for data in this table is 10% (+/-) Data is reported at the Manufacturer’s Level (*) Includes Phosphors, Metallurgy, and Chemotherapy among others

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Table 6.17: Japanese 15-Year Perspective for Germanium by End-Use Application - Percentage Breakdown of Consumption Volume for Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets for Years 2006, 2014 & 2020

End-Use Application 2006 2014 2020 Fiber Optic Systems 15.37 27.68 37.56 Polymerization Catalysts 64.78 46.58 26.31 Infrared Optics 6.02 9.37 12.15 Electronics/Solar Applications 7.09 8.44 13.66 Others* 6.74 7.93 10.32 Total 100.00 100.00 100.00

Data is reported at the Manufacturer’s Level (*) Includes Phosphors, Metallurgy, and Chemotherapy among others

Fiber Optic Systems Polymerization Catalysts Infrared Optics Electronics/Solar Applications Others

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6.4 EUROPE Market Analysis

Germanium market in Europe is estimated to be 26.6 thousand kilograms in 2014, and is expected to reach about 27.2 thousand kilograms by 2015. Registering a CAGR of about 2.5% over the period 2013-2020, the market is projected to reach about 31.03 thousand kilograms by 2020.

France represents the largest market for Germanium, accounting for a share of about 22.76% estimated for 2014, followed by Germany with 18.71% share for the same year. Germanium consumption in Russia, the fastest growing market, is projected to reach 3.2 thousand kilograms by 2020, reflecting a CAGR of about 3.3% over the period 2013-2020.

Infrared Optics represents the largest end-use application for Germanium, with consumption estimated at 8.8 thousand kilograms in 2014, and is projected to reach 11.2 thousand kilograms by 2020, registering a CAGR of 4.1%, during the analysis period 2013-2020. Fiber Optic Systems represents the fastest growing end-use application, with a CAGR of 5.3%, during the analysis period 2013-2020. Germanium consumption in the end-use is estimated at 5.6 thousand kilograms in 2014 and is projected to reach 7.7 thousand kilograms by 2020.

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Table 6.18: European Recent Past, Current & Future Analysis for Germanium by Geographic Region - France, Germany, Italy, UK, Spain, Russia, Belgium, and Rest of Europe Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2013 through 2020

Region/Country 2013 2014 2015 2016 2017 2018 2019 2020 % CAGR

France 5,932.7 6,045.5 6,175.3 6,315.6 6,453.3 6,591.5 6,724.7 6,854.2 2.1

Germany 4,884.9 4,972.3 5,076.5 5,199.7 5,337.9 5,484.0 5,629.1 5,771.3 2.4

Italy 2,176.0 2,219.9 2,269.5 2,330.5 2,400.3 2,477.9 2,560.8 2,644.5 2.8

UK 3,745.6 3,828.6 3,925.8 4,033.7 4,152.5 4,272.4 4,392.3 4,506.3 2.7

Spain 1,866.1 1,897.4 1,934.2 1,975.8 2,024.0 2,078.2 2,135.1 2,189.6 2.3

Russia 2,513.7 2,576.6 2,650.6 2,739.4 2,840.2 2,947.6 3,054.7 3,158.9 3.3

Belgium 1,792.8 1,825.9 1,863.2 1,906.1 1,952.8 1,999.5 2,045.6 2,090.2 2.2

Rest of Europe 3,132.5 3,205.9 3,293.4 3,396.2 3,503.9 3,612.3 3,715.9 3,815.4 2.9

Total 26,044.3 26,572.1 27,188.5 27,897.0 28,664.9 29,463.4 30,258.2 31,030.4 2.5 2014: GIA Estimates 2015-2020: GIA Projections Error tolerance for data in this table is 10% (+/-) Data is reported at the Manufacturer’s Level Countries analyzed under Rest of Europe include Austria, Bulgaria, Czech Republic, Denmark, Finland, Greece, Hungary, Ireland, The Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Sweden, Switzerland, and Turkey

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Table 6.19: European Historic Review for Germanium by Geographic Region - France, Germany, Italy, UK, Spain, Russia, Belgium, and Rest of Europe Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2006 through 2012

Region/Country 2006 2007 2008 2009 2010 2011 2012 % CAGR

France 5,720.6 5,859.1 5,648.8 5,338.0 5,501.2 5,679.4 5,837.9 0.3

Germany 4,894.7 4,979.6 4,751.0 4,459.5 4,569.7 4,709.1 4,809.4 -0.3

Italy 2,185.6 2,240.3 2,127.5 1,976.9 2,029.5 2,088.2 2,138.4 -0.4

UK 3,657.5 3,739.1 3,561.4 3,347.7 3,449.3 3,568.6 3,672.1 0.1

Spain 1,911.1 1,967.8 1,856.4 1,715.8 1,757.2 1,803.0 1,839.8 -0.6

Russia 2,350.8 2,385.0 2,315.8 2,224.3 2,297.4 2,384.2 2,460.4 0.8

Belgium 1,713.5 1,754.9 1,698.9 1,626.5 1,670.9 1,720.5 1,763.1 0.5

Rest of Europe 2,920.2 2,975.4 2,897.9 2,794.6 2,882.8 2,983.4 3,070.9 0.8

Total 25,354.0 25,901.2 24,857.7 23,483.3 24,158.0 24,936.4 25,592.0 0.2 Error tolerance for data in this table is 10% (+/-) Data is reported at the Manufacturer’s Level Countries analyzed under Rest of Europe include Austria, Bulgaria, Czech Republic, Denmark, Finland, Greece, Hungary, Ireland, The Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Sweden, Switzerland, and Turkey

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Table 6.20: European 15-Year Perspective for Germanium by Geographic Region - Percentage Breakdown of Consumption Volume for France, Germany, Italy, UK, Spain, Russia, Belgium, and Rest of Europe Markets for Years 2006, 2014 & 2020

Region/Country 2006 2014 2020

France 22.55 22.76 22.08

Germany 19.31 18.71 18.60

Italy 8.62 8.35 8.52

UK 14.43 14.41 14.52

Spain 7.54 7.14 7.06

Russia 9.27 9.70 10.18

Belgium 6.76 6.87 6.74

Rest of Europe 11.52 12.06 12.30

Total 100.00 100.00 100.00 Data is reported at the Manufacturer’s Level Countries analyzed under Rest of Europe include Austria, Bulgaria, Czech Republic, Denmark, Finland, Greece, Hungary, Ireland, Italy, The Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Sweden, Switzerland, and Turkey

France Germany Italy UK Spain Russia Belgium Rest of Europe

149

Table 6.21: European Recent Past, Current & Future Analysis for Germanium by End-Use Application - Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2013 through 2020




Infrared Optics 8,467.6 8,778.4 9,127.2 9,515.7 9,928.4 10,352.0 10,773.4 11,179.3 4.1


4,023.4 4,147.1 4,283.4 4,429.6 4,575.4 4,718.9 4,855.6 4,982.9 3.1

Others* 3,785.3 3,888.4 4,001.5 4,123.1 4,243.9 4,361.1 4,469.5 4,571.8 2.7

Total 26,044.3 26,572.1 27,188.5 27,897.0 28,664.9 29,463.4 30,258.2 31,030.4 2.5

2014: GIA Estimates 2015-2020: GIA Projections Error tolerance for data in this table is 10% (+/-) Data is reported at the Manufacturer’s Level Countries analyzed under Europe include Austria, Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, The Netherlands, Norway, Poland, Portugal, Romania, Russia, Slovakia, Spain, Sweden, Switzerland, Turkey and The UK. (*) Includes Phosphors, Metallurgy, and Chemotherapy among others

150

Table 6.22: European Historic Review for Germanium by End-Use Application – Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2006 through 2012




Infrared Optics 7,599.3 7,872.8 7,517.5 7,053.7 7,418.7 7,824.0 8,187.3 1.3

Electronics/Solar Applications 3,731.4 3,864.7 3,689.1 3,444.4 3,596.1 3,762.1 3,910.4 0.8

Others* 3,505.5 3,650.2 3,504.6 3,295.4 3,425.0 3,565.3 3,690.3 0.9

Total 25,354.0 25,901.2 24,857.7 23,483.3 24,158.0 24,936.4 25,592.0 0.2

Error tolerance for data in this table is 10% (+/-) Data is reported at the Manufacturer’s Level Countries analyzed under Europe include Austria, Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, The Netherlands, Norway, Poland, Portugal, Romania, Russia, Slovakia, Spain, Sweden, Switzerland, Turkey and The UK. (*) Includes Phosphors, Metallurgy, and Chemotherapy among others

151

Table 6.23: European 15-Year Perspective for Germanium by End-Use Application - Percentage Breakdown of Consumption Volume for Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets for Years 2006, 2014 & 2020



Polymerization Catalysts 23.97 15.51 8.30



Others* 13.83 14.63 14.73

Total 100.00 100.00 100.00

Data is reported at the Manufacturer’s Level Countries analyzed under Europe include Austria, Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, The Netherlands, Norway, Poland, Portugal, Romania, Russia, Slovakia, Spain, Sweden, Switzerland, Turkey and The UK. (*) Includes Phosphors, Metallurgy, and Chemotherapy among others


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6.5 FRANCE

A. MARKET ANALYSIS


Germanium market in France is estimated to be 6.05 thousand kilograms in 2014, and is expected to reach 6.18 thousand kilograms by 2015. Registering a CAGR of about 2.1% over the period 2013-2020, the market is projected to reach about 6.9 thousand kilograms by 2020.

Infrared Optics represents the largest end-use application for Germanium, accounting for a share of about 34.97%, estimated for 2014. Fiber Optic Systems occupy the next position with 19.6% share for the same year. Germanium consumption in Fiber Optics Systems, the fastest growing end-use application, is projected to reach 1.6 thousand kilograms by 2020, reflecting CAGR of about 4.7% over the period 2013-2020.

PRODUCT LAUNCH 2012

Buffalo FX Launches B1 Germanium Booster

Buffalo FX launched its hand built novel B1 Germanium Booster that is based on the circuit of the 60's. The new booster utilizes linear voice control and the conventional boost control that enables the device to enhance the tonal range than conventional range master type pedal. While the device offers the classic treble boosted tone of the 60's, the voice control provides enhanced flexibility.

153

B. MARKET ANALYTICS Table 6.24: French Recent Past, Current & Future Analysis for Germanium by End-Use

Application - Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2013 through 2020



Polymerization Catalysts 1,028.7 968.5 906.7 844.8 784.2 725.6 669.9 617.4 -7.0

Infrared Optics 2,041.3 2,113.8 2,193.3 2,279.1 2,362.3 2,446.4 2,528.8 2,608.2 3.6

Electronics/Solar Applications 883.0 909.2 938.7 967.4 995.5 1,022.2 1,046.5 1,069.6 2.8

Others* 846.5 868.8 893.7 918.5 942.2 964.5 983.5 1,001.5 2.4

Total 5,932.7 6,045.5 6,175.3 6,315.6 6,453.3 6,591.5 6,724.7 6,854.2 2.1 2014: GIA Estimates 2015-2020: GIA Projections Error tolerance for data in this table is 10% (+/-) Data is reported at the Manufacturer’s Level (*) Includes Phosphors, Metallurgy, and Chemotherapy among others

154

Table 6.25: French Historic Review for Germanium by End-Use Application - Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2006 through 2012


Fiber Optic Systems 924.1 971.5 940.7 895.9 957.6 1,025.1 1,087.8 2.8


Infrared Optics 1,795.3 1,865.1 1,801.7 1,700.4 1,791.4 1,889.0 1,977.0 1.6

Electronics/Solar Applications 851.6 877.7 829.8 754.7 789.2 825.8 859.4 0.2

Others* 765.5 802.2 777.1 734.8 765.0 796.8 826.0 1.3

Total 5,720.6 5,859.1 5,648.8 5,338.0 5,501.2 5,679.4 5,837.9 0.3 Error tolerance for data in this table is 10% (+/-) Data is reported at the Manufacturer’s Level (*) Includes Phosphors, Metallurgy, and Chemotherapy among others

155

Table 6.26: French 15-Year Perspective for Germanium by End-Use Application - Percentage Breakdown of Consumption Volume for Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets for Years 2006, 2014 & 2020

End-Use Application 2006 2014 2020 Fiber Optic Systems 16.15 19.60 22.72 Polymerization Catalysts 24.20 16.02 9.01 Infrared Optics 31.38 34.97 38.05 Electronics/Solar Applications 14.89 15.04 15.61 Others* 13.38 14.37 14.61 Total 100.00 100.00 100.00



156

6.6 GERMANY

A. MARKET ANALYSIS


Germanium market in Germany is estimated to be 4.97 thousand kilograms in 2014, and is expected to reach 5.08 thousand kilograms by 2015. Registering a CAGR of about 2.4% over the period 2013-2020, the market is projected to reach about 5.8 thousand kilograms by 2020.

Infrared Optics represents the largest end-use application for Germanium, accounting for a share of about 31.8%, estimated for 2014. Infrared Optics segment is estimated at 1.58 thousand kilograms in 2014, and is projected to reach 2.02 thousand kilograms by 2020, registering a CAGR of 4.1%, during the analysis period 2013-2020. Fiber Optic Systems occupies the next position with 21.93% share for the year 2014. Germanium consumption in Fiber Optics Systems, the fastest growing end-use application, is projected to reach about 1.52 thousand kilograms by 2020, reflecting CAGR of 5.6% over the period 2013-2020.

KEY PLAYERS

Photonic Sense GmbH

Photonic Sense GmbH (Photonic), a part of active optoelectronics Jenoptik group, is a major supplier of silicon and germanium components that find usage in infrared optics applications. The company is engaged in producing comprehensive value-added infrared optics components chain developed from premium quality silicon and germanium material. Product portfolio of the company comprises Beamsplitter blanks, Dome blanks, Filter blank, Lens blanks, Mirror blanks, Window blanks, Evaporation granules, Sputtering targets, and Rods and Disks. Photonic Sense’s sophisticated manufacturing and measuring equipment and technologies offer cost effective processes and excellent product quality. The company’s sophisticated Crystal Growing technology facilitates in manufacturing 350 mm large diameter germanium mono-crystals with precise material specifications. The company also manufactures germanium crystals with diameter of more than 500 mm for special applications. Additionally, the company implements advanced CNC processes to produce precision blanks with a wide array of surface finish options ranging between Rq 0.2 µm and Rq 4.0 µm.

Photonic Sense GmbH was founded in the year 2003. The company operates facilities in Nashua, New Hampshire; and Eisenach, Germany. The company’s client base includes leading players engaged in the infrared optics domain in Automotive, Defense and Security, Laser Material Processing & Machine Vision, Health Care & Life Science, and various other industries.

PPM Pure Metals GmbH

PPM Pure Metals GmbH (PPM), a part of the Recylex Group, is a major producer of pure metals that find usage in high tech industries. PPM offers a broad spectrum of metals, which include Antimony, Arsenic, Cadmium, Cadmium telluride, Copper, Gallium, Germanium and Germanium compounds, Indium and Indium compounds, Lead, Tellurium, Tin, Titanium Tetrachloride and Zinc. Germanium products offered by the company include ultra high purity germanium tetrachloride, fiber optic grade germanium tetrachloride, germanium blanks, zone refined germanium, germanium granules, and germanium powder. Additionally, PPM offers five different grades of germanium dioxide, which

157

include catalyst, electronic, BGO, amorphous, and fluorescence germanium dioxide grades. The company also gained expertise in recycling materials or residues containing Germanium, Gallium and Indium.

PPM Pure Metals GmbH was established in the year 1986, and is headquartered at Langelsheim, Germany. The company operates production plants in Osterwieck and Langelsheim.

B. MARKET ANALYTICS Table 6.27: German Recent Past, Current & Future Analysis for Germanium by End-Use

Application - Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2013 through 2020



Polymerization Catalysts 911.6 854.8 796.8 739.0 682.8 628.7 577.1 528.2 -7.5

Infrared Optics 1,527.2 1,582.0 1,642.3 1,710.8 1,787.8 1,866.3 1,943.9 2,018.5 4.1


Others* 657.6 675.3 694.6 715.3 735.0 752.9 768.9 784.1 2.6


158

Table 6.28: German Historic Review for Germanium by End-Use Application - Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2006 through 2012


Fiber Optic Systems 888.8 925.1 888.4 838.8 892.7 957.0 996.4 1.9

Polymerization Catalysts 1,270.5 1,226.5 1,181.4 1,132.6 1,077.6 1,023.2 968.5 -4.4

Infrared Optics 1,418.8 1,464.8 1,381.5 1,275.5 1,337.1 1,410.8 1,476.8 0.7


691.5 716.6 684.7 640.3 667.7 698.8 726.5 0.8

Others* 625.1 646.6 615.0 572.3 594.6 619.3 641.2 0.4

Total 4,894.7 4,979.6 4,751.0 4,459.5 4,569.7 4,709.1 4,809.4 -0.3 Error tolerance for data in this table is 10% (+/-) Data is reported at the Manufacturer’s Level (*) Includes Phosphors, Metallurgy, and Chemotherapy among others

159

Table 6.29: German 15-Year Perspective for Germanium by End-Use Application - Percentage Breakdown of Consumption Volume for Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets for Years 2006, 2014 & 2020






Others* 12.77 13.58 13.59

Total 100.00 100.00 100.00 Data is reported at the Manufacturer’s Level (*) Includes Phosphors, Metallurgy, and Chemotherapy among others


160

6.7 ITALY

MARKET ANALYSIS

Germanium market in Italy is estimated at 2.22 thousand kilograms in 2014, and is expected to reach 2.27 thousand kilograms by 2015. Registering a CAGR of about 2.8% over the period 2013-2020, the market is projected to reach about 2.64 thousand kilograms by 2020.

Infrared Optics represent the largest end-use application, accounting for a share of about 33.9% in 2014 followed by Fiber Optic Systems with 21.1% share for the same year. Infrared Optics end-use application is estimated at 753.4 kilograms in 2014 and is projected to reach 973.7 kilograms by 2020, registering a CAGR of 4.2% over the period 2013-2020. Germanium consumption in Fiber Optic Systems, the fastest growing end-use application, is projected to reach about 648 kilograms by 2020, reflecting CAGR of about 5.4% over the period 2013-2020.

Table 6.30: Italian Recent Past, Current & Future Analysis for Germanium by End-Use Application - Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/ Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2013 through 2020


Fiber Optic Systems 449.0 468.6 490.8 516.8 545.8 577.8 612.7 648.1 5.4 Polymerization Catalysts 351.2 333.3 314.3 295.2 276.3 257.1 238.2 219.8 -6.5 Infrared Optics 728.6 753.4 781.2 813.8 849.9 889.3 931.5 973.7 4.2 Electronics/Solar Applications

312.9 321.8 331.4 342.5 354.7 367.9 380.8 393.6 3.3

Others* 334.3 342.8 351.8 362.2 373.6 385.8 397.6 409.3 2.9 Total 2,176.0 2,219.9 2,269.5 2,330.5 2,400.3 2,477.9 2,560.8 2,644.5 2.8 2014: GIA Estimates 2015-2020: GIA Projections Error tolerance for data in this table is 10% (+/-) Data is reported at the Manufacturer’s Level (*) Includes Phosphors, Metallurgy, and Chemotherapy among others

161

Table 6.31: Italian Historic Review for Germanium by End-Use Application - Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2006 through 2012



Polymerization Catalysts 464.3 450.7 436.6 421.3 403.9 386.5 368.9 -3.8

Infrared Optics 701.7 727.2 680.9 621.1 649.1 679.5 706.6 0.1


Others* 328.8 341.5 322.8 296.1 306.2 317.0 326.5 -0.1

Total 2,185.6 2,240.3 2,127.5 1,976.9 2,029.5 2,088.2 2,138.4 -0.4 Error tolerance for data in this table is 10% (+/-) Data is reported at the Manufacturer’s Level (*) Includes Phosphors, Metallurgy, and Chemotherapy among others

162

Table 6.32: Italian 15-Year Perspective for Germanium by End-Use Application - Percentage Breakdown of Consumption Volume for Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets for Years 2006, 2014 & 2020






Others* 15.04 15.44 15.48



163

6.8 THE UNITED KINGDOM

A. MARKET ANALYSIS


Germanium market in the UK is estimated at 3.8 thousand kilograms in 2014, and is expected to reach 3.9 thousand kilograms by 2015. Registering a CAGR of about 2.7% over the period 2013-2020, the market is projected to reach about 4.5 thousand kilograms by 2020.

Infrared Optics represent the largest end-use application, accounting for a share of about 34.9% in 2014 followed by Fiber Optic Systems with 20.4% share for the same year. Infrared Optics end-use application is estimated at 1.3 thousand kilograms in 2014 and is projected to reach 1.7 thousand kilograms by 2020, registering a CAGR of 4.1% over the period 2013-2020. Germanium consumption in Fiber Optic Systems, the fastest growing end-use application, is projected to reach about 1.06 thousand kilograms by 2020, reflecting CAGR of 5.2% over the period 2013-2020.

PRODUCT LAUNCH

2014

Knight Optical Introduces New Germanium Products Range

Knight Optical (UK) Ltd, a UK-based global precision optical components leader, introduced a new range of custom and stock Germanium blanks, lenses and windows targeted at the Thermal Imaging and CCTV markets. The new Germanium range of lenses and optical windows would enable clients in the defense and security markets to obtain the best possible images even in smoke, fog or darkness. While the newly launched optical lenses and windows are rugged, they also deliver high quality.

Knight Optical(UK) Ltd, with its vast experience in collaborating and working with marine, defense and security industries, is able to offer the most innovative and suitable products for its clients' applications.

CHEMICAL AND TECHNICAL DEVELOPMENTS LTD – A MAJOR UK PLAYER

Chemical and Technical Developments Ltd is a major UK player engaged in manufacturing and supplying premium quality, highly pure inorganic chemicals. The company manufactures excellent quality germanium products in its Salisbury facility. The company’s product portfolio comprises Germanium Tetrachloride, Germanium Dioxide, Cesium Nitrate, Tungsten Oxychloride, and other transition metal as well as lanthanide compounds. The company’s products are extensively used in various industries and applications, including optical and optoelectronics, electronics, metal finishing, defence and aerospace, chemicals, and universities and research. The company is also engaged in purchasing and recycling of residues and metal scrap comprising germanium dioxide, germanium metal, and other germanium compounds. The company uses recycled germanium in production processes for developing highly pure germanium products.

164

B. MARKET ANALYTICS

Table 6.33: UK Recent Past, Current & Future Analysis for Germanium by End-Use Application - Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2013 through 2020


Fiber Optic Systems 745.4 781.3 822.0 866.5 915.7 965.9 1,015.5 1,063.5 5.2 Polymerization Catalysts 562.6 528.1 493.4 458.1 423.7 390.6 359.0 328.1 -7.4

Infrared Optics 1,289.9 1,337.5 1,391.1 1,449.1 1,512.4 1,576.2 1,641.0 1,703.2 4.1


Others* 530.8 545.6 561.9 579.5 597.1 613.9 629.7 644.4 2.8


165

Table 6.34: UK Historic Review for Germanium by End-Use Application - Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2006 through 2012




Infrared Optics 1,161.2 1,201.8 1,139.2 1,072.7 1,128.3 1,190.5 1,246.2 1.2


587.5 607.1 571.3 527.6 550.6 576.3 599.1 0.3

Others* 496.4 518.1 494.0 461.5 479.4 499.3 517.0 0.7


166

Table 6.35: UK 15-Year Perspective for Germanium by End-Use Application - Percentage Breakdown of Consumption Volume for Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets for Years 2006, 2014 & 2020

End-Use Application 2006 2014 2020 Fiber Optic Systems 17.10 20.41 23.60




Others* 13.57 14.25 14.30

Total 100.00 100.00 100.00 Data is reported at the Manufacturer's Level (*) Includes Phosphors, Metallurgy, and Chemotherapy among others


167

6.9 SPAIN

MARKET ANALYSIS

Germanium market in the Spain is estimated at 1.9 thousand kilograms in 2014, and is expected to reach 1.93 thousand kilograms by 2015. Registering a CAGR of 2.3% over the period 2013-2020, the market is projected to reach about 2.2 thousand kilograms by 2020.

Infrared Optics represent the largest end-use application, accounting for a share of about 32.4% in 2014 followed by Fiber Optic Systems with 19.2% share. Infrared Optics end-use application is estimated at 614.7 kilograms in 2014 and is projected to reach 775.4 kilograms by 2020, registering a CAGR of 3.8%, during the analysis period 2013-2020. Germanium consumption in Fiber Optic Systems, the fastest growing end-use application, is projected to reach about 471.6 kilograms by 2020, reflecting a CAGR of 4.3% over the period 2013-2020.

Table 6.36: Spanish Recent Past, Current & Future Analysis for Germanium by End-Use Application - Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2013 through 2020


Fiber Optic Systems 351.3 364.4 379.2 395.3 413.1 432.4 452.1 471.6 4.3 Polymerization Catalysts 282.0 268.4 254.3 240.0 225.8 211.9 198.5 185.7 -5.8 Infrared Optics 597.1 614.7 635.3 658.4 684.5 713.4 744.9 775.4 3.8 Electronics/Solar Applications

320.1 327.8 336.1 345.0 354.8 365.2 375.4 384.6 2.7


168

Table 6.37: Spanish Historic Review for Germanium by End-Use Application - Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2006 through 2012


Fiber Optic Systems 317.4 333.3 316.4 292.7 308.1 324.9 339.6 1.1 Polymerization Catalysts 366.8 356.6 346.1 334.7 321.8 308.9 295.5 -3.5 Infrared Optics 596.4 620.1 575.3 519.4 540.2 562.7 581.9 -0.4


Others* 319.1 332.5 311.8 284.4 292.9 302.0 309.6 -0.5 Total 1,911.1 1,967.8 1,856.4 1,715.8 1,757.2 1,803.0 1,839.8 -0.6 Error tolerance for data in this table is 10% (+/-) Data is reported at the Manufacturer’s Level (*) Includes Phosphors, Metallurgy, and Chemotherapy among others

169

Table 6.38: Spanish 15-Year Perspective for Germanium by End-Use Application - Percentage Breakdown of Consumption Volume for Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets for Years 2006, 2014 & 2020






Others* 16.70 16.98 17.00



170

6.10 RUSSIA

A. MARKET ANALYSIS


Russia is expected to witness relatively less exports for Germanium, as only a few agreements have been signed and demand declined from the US, Canada and European markets. Another major issue faced by Russia is stockpiling strategy adopted in China which in turn tightened supply and increased cost of Germanium. In this scenario, it became difficult for producers to use Germanium as a raw material or as an element in reprocessing applications owing to its higher cost.

Russian market for Germanium is estimated at 2.6 thousand kilograms in 2014, and is expected to reach 2.7 thousand kilograms by 2015. Registering a CAGR of 3.3% over the period 2013-2020, the market is projected to reach about 3.2 thousand kilograms by 2020.

Infrared Optics represent the largest end-use application, accounting for a share of about 33.5% in 2014 followed by Fiber Optic Systems with 22.1% share. Consumption of germanium in Infrared Optics end-use application is estimated at 862 kilograms in 2014 and is projected to reach 1.17 thousand kilograms by 2020, registering a CAGR of 5.2%, during the analysis period 2013-2020. Germanium consumption in Fiber Optic Systems, the fastest growing end-use application, is projected to reach about 849 kilograms by 2020, reflecting CAGR of 6.8% over the period 2013-2020.

Russia Removes Import Duty on Germanium

The Russian government removed the import duty applicable on imports of germanium into Russia. The zero duty regime would apply to imports of germanium oxides, germanium waste and scrap, and unprocessed germanium and powders. The import duty relaxations have been announced following requests from Germanii, the major germanium producer to counter insufficient supply from domestic sources.

171

B. MARKET ANALYTICS

Table 6.39: Russian Recent Past, Current & Future Analysis for Germanium by End-Use Application - Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2013 through 2020


Fiber Optic Systems 536.2 569.6 607.2 650.1 698.3 749.1 799.7 849.3 6.8 Polymerization Catalysts 458.3 422.0 385.6 350.0 316.1 284.3 254.8 227.9 -9.5 Infrared Optics 823.0 862.2 905.7 954.6 1,008.7 1,064.6 1,119.6 1,172.3 5.2 Electronics/Solar Applications

376.4 391.5 408.2 426.8 445.3 464.0 481.8 498.2 4.1


172

Table 6.40: Russian Historic Review for Germanium by End-Use Application - Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2006 through 2012




Infrared Optics 653.5 681.4 668.7 648.8 693.2 742.5 787.3 3.2


314.6 327.2 319.3 307.5 325.3 344.9 362.5 2.4

Others* 278.3 286.8 278.7 266.8 280.6 295.7 309.2 1.8


173

Table 6.41: Russian 15-Year Perspective for Germanium by End-Use Application - Percentage Breakdown of Consumption Volume for Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets for Years 2006, 2014 & 2020






Others* 11.84 12.86 13.02

Total 100.00 100.00 100.00



174

6.11 BELGIUM

A. MARKET ANALYSIS


Germanium market in Belgium is estimated at 1.83 thousand kilograms in 2014, and is expected to reach 1.86 thousand kilograms by 2015. Registering a CAR of about 2.2% over the period 2013-2020, the market is projected to reach about 2.09 thousand kilograms by 2020.

Infrared Optics represent the largest end-use application, accounting for a share of about 28.74% in 2014 followed by Fiber Optic Systems with 24.32% share. Consumption of germanium in Infrared Optics end-use application is estimated at 524.6 kilograms in 2014 and is projected to reach 645.1 kilograms by 2020, registering a CAGR of 3.5%, during the analysis period 2013-2020. Germanium consumption in Fiber Optic Systems, the fastest growing end-use application, is projected to reach about 580.9 kilograms by 2020, reflecting CAGR of 4.5% over the period 2013-2020.

PRODUCT LAUNCH

2013

Imec Reveals Strained Germanium p-channel FinFETs

Imec revealed innovative strained germanium (Ge) quantum-well channel pMOS FinFETs that are designed with the Si Fin replacement approach on 300mm Si wafers. The new FinFETs represent a potential evolution of FinFET/trigate architecture for the 5nm and 7nm technologies. Apart from enhancing channel mobility, the solution also holds scalability potential. Based on Fin replacement approach, strained germanium p-channel FinFETs are highly suitable for integration with other devices on a single Si substrate. The devices on SiGe trench buffer demonstrated peak trans-conductance values of up to 1.3mS/µm at 0.5V VDS with excellent short channel control to 60nm gate length. In addition, the trans-conductance to sub-threshold slope ratio of strained geranium device is relatively higher than relaxed germanium FinFET devices.

Imec, a Leuven, Belgium-based research institute, is engaged in conducting next-generation researches in the field of nanoelectronics. The institute utilizes its scientific knowhow with its worldwide partnerships in the healthcare, energy and ICT sectors. Imec manages its offices in the US, the Netherlands, Belgium, Japan, China, India and Taiwan.

KEY PLAYERS

Umicore SA

Umicore SA is one of the leading global recycling and material technology companies. The company operates in four business segments including energy materials, recycling, catalysis, and performance materials. These business segments are further divided into various market-specific units providing advanced solutions for consumers. Umicore's energy material unit offers various chemical compounds such as nickel, germanium, and cobalt; as well as alloys. These materials are used in manufacturing and storing sustainable energy systems including photovoltaics and rechargeable

175

batteries. The company's Energy Materials division comprises rechargeable battery materials; cobalt specialty materials; thin film products; and electro-optic materials.

Electro-Optic Materials covers a broad range of germanium products such as equipment for lenses and photonics; optical assemblies; as well as substrates for LEDs. Rechargeable battery materials (RBM) provide various cathode materials for players operating in portable electronics, power tools, energy storage devices, and electrified vehicles industries. Cobalt specialty materials (CBM) segment offers fine powders, metallic compounds, as well as chemical compounds for diamond tools, ceramics, and rechargeable batteries, respectively.

Umicore Electro-Optic Materials

Umicore Electro-Optic Materials, a part of Umicore, is the largest germanium producer in the world. The company is engaged in extracting, refining, processing as well as marketing of germanium. The company gained expertise in Czochralski pulling of premium quality germanium single crystals. UOM's highly popular GASIR® is specifically designed for assisting optical designers in manufacturing near as well as far infrared optics. The company also offers various innovative coatings for GASIR® such as iDLC, a diamond-shaped carbon coating. Umicore provides a comprehensive array of infrared lenses that comes with various fields of view, and are compatible with varied interfaces and detectors.

Umicore Electro-Optic Materials’ Substrates business line ranks as the largest Germanium wafers manufacturer and holds an installed capacity of more than 1 million wafers. Germanium wafers of the company find usage in plethora of applications, including high brightness LEDs, Space Solar Cells, Terrestrial Solar Cells (CPV), and several other semiconductor applications. Umicore offers high-purity germanium that finds usage in gamma ray detectors as well as various other applications that require highly pure germanium. The company also supplies germanium tetrachloride that is used in optical fiber doping. Additionally, Umicore recycles germanium from optical fibers, germanium containing waste and several other varied streams. The company manufactures its products at four sites, which include Umicore Olen, Belgium; Umicore Quapaw, Oklahoma, the US; Umicore Acigné, France; and Umicore Dundee, the UK.

176

B. MARKET ANALYTICS

Table 6.42: Belgian Recent Past, Current & Future Analysis for Germanium by End-Use Application - Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2013 through 2020


Fiber Optic Systems 426.4 444.1 463.6 485.4 509.4 533.5 557.5 580.9 4.5

Polymerization Catalysts 285.6 270.5 255.0 239.3 223.9 208.9 194.5 180.8 -6.3

Infrared Optics 508.5 524.6 542.2 561.7 582.9 604.1 624.9 645.1 3.5


284.5 292.1 300.4 309.5 318.4 327.2 335.5 343.3 2.7

Others* 287.8 294.6 302.0 310.2 318.2 325.8 333.2 340.1 2.4


177

Table 6.43: Belgian Historic Review for Germanium by End-Use Application - Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2006 through 2012




Infrared Optics 460.2 475.2 456.4 433.4 453.1 474.5 493.6 1.2


Others* 266.4 276.9 267.7 254.9 263.7 273.1 281.4 0.9


178

Table 6.44: Belgian 15-Year Perspective for Germanium by End-Use Application - Percentage Breakdown of Consumption Volume for Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets for Years 2006, 2014 & 2020






Others* 15.55 16.13 16.27


Fiber Optic Systems Polymerization Catalysts Infrared Optics

Electronics/Solar Applications Others

179

6.12 REST OF EUROPE

MARKET ANALYSIS

Germanium market in rest of Europe is estimated at 3.21 thousand kilograms in 2014, and is expected to reach 3.29 thousand kilograms by 2015. Registering a CAGR of about 2.9% over the period 2013-2020, the market is projected to reach about 3.82 thousand kilograms by 2020.

Infrared Optics represent the largest end-use application, accounting for a share of about 30.9% in 2014 followed by Fiber Optic Systems with 22.9% share. Infrared Optics end-use application is estimated at 990 kilograms in 2014 and is projected to reach 1.28 thousand kilograms by 2020, registering a CAGR of 4.4%, during the analysis period 2013-2020. Germanium consumption in Fiber Optic Systems, the fastest growing end-use application, is projected to reach about 1.02 thousand kilograms by 2020, reflecting CAGR of 5.6% over the period 2013-2020. Table 6.45: Rest of Europe Recent Past, Current & Future Analysis for Germanium by End-

Use Application - Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2013 through 2020


Fiber Optic Systems 698.4 734.6 775.0 820.6 871.2 923.0 974.3 1,024.7 5.6 Polymerization Catalysts 507.0 474.6 441.5 408.6 376.6 345.2 315.9 288.5 -7.7 Infrared Optics 952.0 990.2 1,036.1 1,088.2 1,139.9 1,191.7 1,238.8 1,282.9 4.4


Others* 492.9 507.9 524.3 542.4 560.2 577.3 593.6 608.9 3.1 Total 3,132.5 3,205.9 3,293.4 3,396.2 3,503.9 3,612.3 3,715.9 3,815.4 2.9 2014: GIA Estimates 2015-2020: GIA Projections Error tolerance for data in this table is 10% (+/-) Data is reported at the Manufacturer’s Level Countries analyzed under Rest of Europe include Austria, Bulgaria, Czech Republic, Denmark, Finland, Greece, Hungary, Ireland, The Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Sweden, Switzerland, and Turkey (*) Includes Phosphors, Metallurgy, and Chemotherapy among others

180

Table 6.46: Rest of Europe Historic Review for Germanium by End-Use Application - Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2006 through 2012


Fiber Optic Systems 540.7 564.3 556.0 541.7 581.4 625.6 666.1 3.5 Polymerization Catalysts 720.2 693.8 666.8 637.7 604.9 572.5 540.0 -4.7 Infrared Optics 812.2 837.2 813.8 782.4 826.3 874.5 917.9 2.1


Others* 425.9 445.6 437.5 424.6 442.6 462.1 479.4 2.0 Total 2,920.2 2,975.4 2,897.9 2,794.6 2,882.8 2,983.4 3,070.9 0.8 Error tolerance for data in this table is 10% (+/-) Data is reported at the Manufacturer’s Level Countries analyzed under Rest of Europe include Austria, Bulgaria, Czech Republic, Denmark, Finland, Greece, Hungary, Ireland, The Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Sweden, Switzerland, and Turkey (*) Includes Phosphors, Metallurgy, and Chemotherapy among others

181

Table 6.47: Rest of Europe 15-Year Perspective for Germanium by End-Use Application - Percentage Breakdown of Consumption Volume for Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets for Years 2006, 2014 & 2020





Others* 14.58 15.84 15.96

Total 100.00 100.00 100.00 Data is reported at the Manufacturer’s Level Countries analyzed under Rest of Europe include Austria, Bulgaria, Czech Republic, Denmark, Finland, Greece, Hungary, Ireland, The Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Sweden, Switzerland, and Turkey (*) Includes Phosphors, Metallurgy, and Chemotherapy among others



182

6.13 ASIA-PACIFIC

MARKET ANALYSIS

Germanium market in Asia-Pacific is estimated at 40.1 thousand kilograms in 2014, and is expected to reach 42.1 thousand kilograms by 2015. Registering a CAGR of about 5.7% over the period 2013-2020, the market is projected to reach about 56.5 thousand kilograms by 2020. Infrared Optics represents the largest end-use application for Germanium, accounting for a share of about 26.98%, estimated for 2014. Consumption of germanium by the end-use application is estimated at 10.8 thousand kilograms in 2014, and is projected to reach 16.98 thousand kilograms by 2020, registering a CAGR of 7.7%, during the analysis period 2013-2020. Germanium consumption in Fiber Optics Systems, the fastest growing end-use application, is projected to reach 16.86 thousand kilograms by 2020, reflecting CAGR of about 10.2% over the period 2013-2020.

China constitutes the largest regional market in Asia-Pacific, accounting for about 78.4% share of total germanium consumption in the year 2014. Chinese germanium market is estimated at 31.4 thousand kilograms in 2014 and is projected to reach 44.6 thousand kilograms by 2020, registering a CAGR of 5.8% over the period 2013-2020.

Table 6.48: Asia-Pacific Recent Past, Current & Future Analysis for Germanium by Geographic Region - China, and Rest of Asia-Pacific Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2013 through 2020

Region/Country 2013 2014 2015 2016 2017 2018 2019 2020 % CAGR

China 30,130.8 31,425.5 33,012.2 34,919.9 37,104.3 39,510.2 42,021.3 44,576.8 5.8 Rest of Asia-Pacific 8,332.3 8,663.8 9,070.6 9,560.6 10,118.4 10,714.0 11,328.0 11,948.1 5.3

Total 38,463.1 40,089.3 42,082.8 44,480.5 47,222.7 50,224.2 53,349.3 56,524.9 5.7 2014: GIA Estimates 2015-2020: GIA Projections Error tolerance for data in this table is 10% (+/-) Data is reported at the Manufacturer’s Level Countries analyzed under Rest of Asia-Pacific include Australia, Hong Kong, India, Indonesia, Korea, Malaysia, New Zealand,Philippines, Singapore, Taiwan and Thailand

183

Table 6.49: Asia-Pacific Historic Review for Germanium by Geographic Region - China, and Rest of Asia-Pacific Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2006 through 2012

Region/Country 2006 2007 2008 2009 2010 2011 2012 % CAGR

China 23,167.3 23,828.6 24,450.7 25,014.3 26,158.2 27,672.6 29,080.5 3.9

Rest of Asia-Pacific 6,574.9 6,735.4 6,883.3 7,010.2 7,313.9 7,705.3 8,064.1 3.5

Total 29,742.2 30,564.0 31,334.0 32,024.5 33,472.1 35,377.9 37,144.6 3.8 Error tolerance for data in this table is 10% (+/-) Data is reported at the Manufacturer’s Level Countries analyzed under Rest of Asia-Pacific include Australia, Hong Kong, India, Indonesia, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan and Thailand

184

Table 6.50: Asia-Pacific 15-Year Perspective for Germanium by Geographic Region - Percentage Breakdown of Consumption Volume for China, and Rest of Asia-Pacific Markets for Years 2006, 2014 & 2020

Region/Country 2006 2014 2020

China 77.89 78.39 78.86

Rest of Asia-Pacific 22.11 21.61 21.14

Total 100.00 100.00 100.00 Data is reported at the Manufacturer’s Level Countries analyzed under Rest of Asia-Pacific include Australia, Hong Kong, India, Indonesia, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan and Thailand

China Rest of Asia-Pacific

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Table 6.51: Asia-Pacific Recent Past, Current & Future Analysis for Germanium by End-Use Application - Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2013 through 2020




Infrared Optics 10,118.8 10,814.7 11,625.8 12,558.6 13,617.1 14,719.1 15,850.8 16,983.6 7.7


7,059.0 7,475.9 7,956.5 8,503.2 9,059.0 9,627.8 10,184.9 10,721.9 6.2

Others* 6,256.7 6,582.0 6,954.7 7,370.5 7,794.6 8,225.3 8,643.3 9,043.2 5.4

Total 38,463.1 40,089.3 42,082.8 44,480.5 47,222.7 50,224.2 53,349.3 56,524.9 5.7

2014: GIA Estimates 2015-2020: GIA Projection Error tolerance for data in this table is 15% (+/-) Data is reported at the Manufacturer’s Level Countries analyzed under Asia-Pacific include Australia, China, Hong Kong, India, Indonesia, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan and Thailand (*) Includes Phosphors, Metallurgy, and Chemotherapy among others

186

Table 6.52: Asia-Pacific Historic Review for Germanium by End-Use Application – Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2006 through 2012




Infrared Optics 5,959.0 6,412.9 6,867.1 7,319.5 7,972.5 8,769.0 9,513.3 8.1


Others* 4,222.5 4,449.9 4,667.9 4,876.3 5,204.5 5,596.9 5,969.4 5.9

Total 29,742.2 30,564.0 31,334.0 32,024.5 33,472.1 35,377.9 37,144.6 3.8 Error tolerance for data in this table is 15% (+/-) Data is reported at the Manufacturer’s Level Countries analyzed under Asia-Pacific include Australia, China, Hong Kong, India, Indonesia, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan and Thailand (*) Includes Phosphors, Metallurgy, and Chemotherapy among others

187

Table 6.53: Asia-Pacific 15-Year Perspective for Germanium by End-Use Application - Percentage Breakdown of Consumption Volume for Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets for Years 2006, 2014 & 2020





Others* 14.20 16.42 16.00

Total 100.00 100.00 100.00

Data is reported at the Manufacturer’s Level Countries analyzed under Asia-Pacific include Australia, China, Hong Kong, India, Indonesia, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan and Thailand (*) Includes Phosphors, Metallurgy, and Chemotherapy among others



188

6.14 CHINA

A. MARKET ANALYSIS

Outlook

Germanium market in China is estimated at 31.4 thousand kilograms in 2014, and is expected to reach 33 thousand kilograms by 2015. Registering a CAGR of about 5.8% over the period 2013-2020, the market is projected to reach about 44.6 thousand kilograms by 2020. Infrared Optics represents the largest end-use application for Germanium, with consumption estimated at 8.7 thousand kilograms in 2014, and is projected to reach 13.7 thousand kilograms by 2020, registering a CAGR of 7.8% during the analysis period 2013-2020. Germanium consumption in Fiber optic systems, the fastest growing end-use application, is projected to reach 13.1 thousand kilograms by 2020, reflecting a CAGR of about 10.5% over the period 2013-2020.

Overview of Germanium Market

In 2012, the germanium industry witnessed several changes that played a crucial role in re-shaping the market. After slow sales encouraged germanium prices downwards in the first quarter of the year, spot market sales languished leaving various expecting prices to fall. The market experienced price discrepancies between non-Chinese produced materials and Chinese-produced germanium, as competition over limited orders drove prices to a five year low. Such incongruities further reflected differences in compliance to accept low prices between non-Chinese and Chinese producers.

For several years, China continued to be the leading supplier and producer of the most traded germanium forms, germanium dioxide and polycrystalline germanium metal. With a growing and steady minor metals demand, China is becoming the price setter for the global spot market. Non-Chinese producers, who are not dependent as majority Chinese producers, were gratified to take prices at par or less than their Chinese counterparts. Significant demand drop witnessed in first and second quarters of 2012 allowed non-Chinese production to meet the global demand. Consequently, the non-Chinese producers started to set the prices for germanium, while Chinese counterparts decided to either wait for improved price position or sell at comparatively lesser cost.

Some of the leading Chinese producers held back inventory, anticipating price increases and encouraging buying activity. Local prices witnessed a slight increase, but demand was met by production and inventories outside the nation. Further, Hanergy and Yunnan Lincang Xinyuan, the two leading alternative energy providers, entered into an agreement to supply 375 million tons of germanium dioxide over a span of six years, an amount equivalent to about 50% of the total annual germanium production. The declaration raised several questions, while the delayed and limited response by the market accentuated a level of skepticism.

Nevertheless, recent efforts and activities by leading producers to boost prices and sales would set a trend for near future. Major producers exhibited reluctance to sell material at lesser prices. But the ability to sustain such prices would entirely depend on consumption levels. If the consumption would continue to slow down as witnessed in the first quarter, the industry would face difficulties in predicting price changes. However, a slight increase in the overall demand is projected to encourage global suppliers to pursue the Chinese lead

189

Chinese Germanium Industry Flexes Muscles

China's germanium market comprises premium and deep processing products as its important constituents. With an intention of fostering industrial growth, Chinese government is providing tax rebates of 15% and 17% on exports of germanium optical components and mono-crystalline germanium slices, respectively. Potential growth prospects, coupled with favorable business environment, are encouraging various Chinese players to establish their downstream production facilities. Despite exuding high-growth prospects, the market lost its steam for a brief period of time.

However, the market seems to be getting back on track after having witnessed price fluctuations owing to demand and supply constraints. Subsequent to the environmental guidelines issued by the Chinese government that forced producers to reduce their supplies, the prices of germanium rose back to their previous levels. The prices are expected to maintain upward trend in the near future, primarily due to rise in demand from US and Asian markets.

STRATEGIC CORPORATE DEVELOPMENTS

2011

Yunnan Lincang Xinyuan Germanium Industrial Commences Construction of National Germanium Base in China

Yunnan Lincang Xinyuan Germanium Industrial Co. Ltd. commenced the construction of a national germanium base in Kunming, southwest China. The base would primarily be engaged in the photoelectron industry that includes the germanium photovoltaic (PV) industry, germanium infrared industry, as well as special and advanced germanium materials industry. Initially, the facilities that produce mono-crystalline germanium for solar batteries and germanium infrared optical lenses would be built. The company invested 430 million Yuan for the facilities that include a production line with capacity of producing 10 metric tons of mono-crystalline germanium per year for solar batteries; a production line with production capacity of 35,500 sets of germanium infrared optical lenses per year; and a facility that produces 300,000 slices of germanium wafers per year.

Yunnan Chihong Zinc and Germanium to Acquire Xinhu Mining

Yunnan Chihong Zinc and Germanium Co., Ltd. announced plans to acquire Xinhu Mining Co., Ltd. as per a reconstructing agreement signed between the two companies. The acquisition would enable Yunnan Chihong Zinc and Germanium to acquire 51-60% of stake in Xinhu Mining for a consideration amount of CNY 120 million. Subsequent to the acquisition, Yunnan Chihong Zinc and Germanium and Tibet Yuanze Mining Co., Ltd., the previous controlling shareholder of Xinhu Mining, would form a joint venture. As per the deal, 6 out of 10 exploration rights as well as physical assets of the associated quarrying plants would be given to the newly formed joint venture, and rest 4 would remain with Xinhu Mining.

KEY PLAYERS

Yunnan Chihong Zinc and Germanium Co., Ltd

190

Yunnan Chihong Zinc and Germanium Co., Ltd. (Chihong), formerly Huize Lead-Zinc Mine, is primarily engaged in mining, and smelting of various non-ferrous metals in China and international markets. The company is a leading producer and exporter of germanium products in China. Chihong's product portfolio includes zone melting germanium ingot; high-purity germanium dioxide; germanium crystal; high-purity germanium tetrachloride; tellurium ingot; cadmium ingot; indium ingot; and bismuth. The company's solutions are manufactured as per the quality, safety and health guidelines specified by AAAA level standardizations and ISO9002 certification. Other operations of the company include mining, processing and sale of lead, silver products, zinc, and sulfuric acid products such as electrolytic zinc, zinc ingots, zinc alloy, electrolytic lead, and hot-galvanized zinc alloy.

Yunnan Lincang Xinyuan Germanium Industry Co., Ltd.

Yunnan Lincang Xinyuan Germanium Industry Co., Ltd., previously known as Yunnan Lincang Smeltery, is the leading germanium producer with largest recoverable germanium deposits in China. The company has an integrated industrial chain that encompasses mining, enrichment of pyrometallurgy, zone-melting refining, hydrometallurgy purification, processing as well as research and development of germanium in China. Key product offerings of the company include germanium dioxide, Infrared germanium monocrystalline, zone-refined germanium ingot, infrared optics germanium lens, photovoltaic germanium tetrachloride, gallium arsenide single crystal wafer and germanium optical elements such as germanium lens, germanium blanks, and germanium polished blanks. The company's germanium processing products such as germanium tetrachloride, and mono-crystalline germanium slices, are used in manufacturing optical germanium lens and solar cells, respectively.

Yunnan Lincang Xinyuan Germanium Industry Co., Ltd., is headquartered in Lincang City, Yunnan Province, and operates 10 subsidiaries. The company’s products are marketed in China, Japan, Europe and the US.

191

B. MARKET ANALYTICS

Table 6.54: Chinese Recent Past, Current & Future Analysis for Germanium by End-Use Application - Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2013 through 2020




Infrared Optics 8,120.9 8,686.1 9,345.4 10,104.2 10,966.1 11,864.2 12,787.2 13,711.7 7.8


5,393.3 5,716.4 6,089.1 6,513.5 6,945.3 7,387.7 7,821.4 8,239.8 6.2

Others* 5,060.7 5,326.9 5,632.1 5,971.7 6,319.3 6,672.5 7,015.5 7,343.8 5.5


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Table 6.55: Chinese Historic Review for Germanium by End-Use Application – Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2006 through 2012




Infrared Optics 4,737.1 5,108.5 5,480.9 5,852.5 6,381.0 7,026.1 7,629.6 8.3


3,474.9 3,684.4 3,886.7 4,081.0 4,392.4 4,768.0 5,114.6 6.7

Others* 3,390.3 3,578.1 3,758.4 3,930.9 4,198.6 4,518.9 4,825.7 6.1


193

Table 6.56: Chinese 15-Year Perspective for Germanium by End-Use Application Percentage Breakdown of Consumption Volume for Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets for Years 2006, 2014 & 2020






Others* 14.63 16.95 16.47

Total 100.00 100.00 100.00



194

6.15 REST OF ASIA-PACIFIC

MARKET ANALYSIS

Germanium market in rest of Asia-Pacific is estimated at 8.7 thousand kilograms in 2014, and is expected to reach 9.1 thousand kilograms by 2015. Registering a CAGR of about 5.3% over the period 2013-2020, the market is projected to reach about 11.9 thousand kilograms by 2020. Fiber Optic Systems represent the largest and the fastest growing end-use application for Germanium, with consumption estimated at 2.2 thousand kilograms in 2014, and is projected to reach 3.8 thousand kilograms by 2020, registering a CAGR of 9.5% over the analysis period 2013-2020.

Table 6.57: Rest of Asia-Pacific Recent Past, Current & Future Analysis for Germanium by End-Use Application - Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2013 through 2020



Polymerization Catalysts 1,464.3 1,340.7 1,217.4 1,097.6 984.2 878.5 781.3 693.2 -10.1

Infrared Optics 1,997.9 2,128.6 2,280.4 2,454.4 2,651.0 2,854.9 3,063.6 3,271.9 7.3


1,665.7 1,759.5 1,867.4 1,989.7 2,113.7 2,240.1 2,363.5 2,482.1 5.9

Others* 1,196.0 1,255.1 1,322.6 1,398.8 1,475.3 1,552.8 1,627.8 1,699.4 5.2

Total 8,332.3 8,663.8 9,070.6 9,560.6 10,118.4 10,714.0 11,328.0 11,948.1 5.3 2014: GIA Estimates 2015-2020: GIA Projections Error tolerance for data in this table is 15% (+/-) Data is reported at the Manufacturer’s Level Countries analyzed under Rest of Asia-Pacific include Australia, Hong Kong, India, Indonesia, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan and Thailand (*) Includes Phosphors, Metallurgy, and Chemotherapy among others

195

Table 6.58: Rest of Asia-Pacific Historic Review for Germanium by End-Use Application - Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2006 through 2012


Fiber Optic Systems 1,156.3 1,221.5 1,285.6 1,348.3 1,497.7 1,683.6 1,861.2 8.3 Polymerization Catalysts 2,249.4 2,164.8 2,073.7 1,968.4 1,845.8 1,717.5 1,590.9 -5.6 Infrared Optics 1,221.9 1,304.4 1,386.2 1,467.0 1,591.5 1,742.9 1,883.7 7.5 Electronics/Solar Applications 1,115.1 1,172.9 1,228.3 1,281.1 1,373.0 1,483.3 1,584.6 6.0

Others* 832.2 871.8 909.5 945.4 1,005.9 1,078.0 1,143.7 5.4 Total 6,574.9 6,735.4 6,883.3 7,010.2 7,313.9 7,705.3 8,064.1 3.5

Error tolerance for data in this table is 15% (+/-) Data is reported at the Manufacturer’s Level Countries analyzed under Rest of Asia-Pacific include Australia, Hong Kong, India, Indonesia, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan and Thailand (*) Includes Phosphors, Metallurgy, and Chemotherapy among others

196

Table 6.59: Rest of Asia-Pacific15-Year Perspective for Germanium by End-Use Application - Percentage Breakdown of Consumption Volume for Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets for Years 2006, 2014 & 2020






Others* 12.66 14.49 14.22

Total 100.00 100.00 100.00 Data is reported at the Manufacturer’s Level Countries analyzed under Rest of Asia-Pacific include Australia, Hong Kong, India, Indonesia, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan and Thailand (*) Includes Phosphors, Metallurgy, and Chemotherapy among others



197

6.16 LATIN AMERICA

MARKET ANALYSIS

Germanium market in Latin America is estimated at 7.6 thousand kilograms in 2014, and is expected to reach 7.9 thousand kilograms by 2015. Registering a CAGR of 4.8% over the period 2013-2020, the market is projected to reach about 10.2 thousand kilograms by 2020.

Fiber Optics Systems represents the largest and the fastest growing end-use application, accounting for a share of about 26.6% in 2014. Germanium consumption in Fiber Optic Systems is estimated at 2.03 thousand kilograms in 2014, and is projected to reach 3.35 thousand kilograms by 2020, registering a CAGR of 8.7% over the analysis period 2013-2020.

Table 6.60: Latin American Recent Past, Current & Future Analysis for Germanium by End-Use Application - Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2013 through 2020



Polymerization Catalysts 1,330.8 1,225.4 1,119.6 1,016.3 917.8 825.3 739.6 661.3 -9.5

Infrared Optics 1,824.0 1,936.4 2,066.3 2,214.7 2,381.7 2,554.1 2,729.8 2,904.5 6.9

Electronics/Solar Applications 1,376.9 1,447.3 1,528.1 1,619.5 1,711.5 1,804.8 1,893.4 1,979.5 5.3

Others* 928.9 973.1 1,023.5 1,080.1 1,136.9 1,194.3 1,250.0 1,303.1 5.0

Total 7,336.0 7,608.4 7,941.2 8,340.8 8,795.3 9,262.8 9,734.5 10,201.1 4.8 2014: GIA Estimates 2015-2020: GIA Projections Error tolerance for data in this table is 15% (+/-) Data is reported at the Manufacturer’s Level Countries analyzed under Latin America include Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Peru and Venezuela (*) Includes Phosphors, Metallurgy, and Chemotherapy among others

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Table 6.61: Latin American Historic Review for Germanium by End-Use Application - Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2006 through 2012




Infrared Optics 1,247.1 1,299.1 1,341.7 1,363.3 1,472.1 1,603.7 1,725.6 5.6


Others* 688.2 716.5 737.2 743.5 788.3 841.4 889.6 4.4

Total 6,226.4 6,275.1 6,291.2 6,233.6 6,483.1 6,812.6 7,112.5 2.2 Error tolerance for data in this table is 15% (+/-) Data is reported at the Manufacturer’s Level Countries analyzed under Latin America include Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Peru and Venezuela (*) Includes Phosphors, Metallurgy, and Chemotherapy among others

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Table 6.62: Latin American 15-Year Perspective for Germanium by End-Use Application - Percentage Breakdown of Consumption Volume for Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets for Years 2006, 2014 & 2020





Others* 11.05 12.79 12.77

Total 100.00 100.00 100.00 Data is reported at the Manufacturer’s Level Countries analyzed under Latin America include Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Peru and Venezuela (*) Includes Phosphors, Metallurgy, and Chemotherapy among others


200

6.17 REST OF WORLD

MARKET ANALYSIS

Germanium market in rest of world market is estimated at 6.8 thousand kilograms in 2014, and is expected to reach about 7.08 thousand kilograms by 2015. Registering a CAGR of 4.5% over the period 2013-2020, the market is projected to reach about 8.97 thousand kilograms by 2020.

Infrared Optics represents the largest end-use application for Germanium with consumption estimated at 1.97 thousand kilograms in 2014. The segment is further projected to reach 2.89 thousand kilograms in 2020, registering a CAGR of 6.5% over the analysis period 2013-2020. Germanium consumption in Fiber Optic Systems, the fastest growing end-use application, is projected to reach 2.7 thousand kilograms by 2020, registering a CAGR of 8.4% over the analysis period 2013-2020.

Table 6.63: Rest of World Recent Past, Current & Future Analysis for Germanium by End-Use Application - Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2013 through 2020


Fiber Optic Systems 1,525.5 1,640.7 1,775.7 1,932.1 2,110.8 2,294.4 2,484.1 2,675.1 8.4 Polymerization Catalysts 1,212.7 1,122.4 1,031.3 941.7 855.8 775.5 701.4 632.1 -8.9 Infrared Optics 1,864.0 1,971.9 2,096.3 2,237.8 2,396.5 2,559.7 2,725.3 2,889.4 6.5 Electronics/Solar Applications

1,035.7 1,087.4 1,146.4 1,212.9 1,279.9 1,347.7 1,413.1 1,476.3 5.2

Others* 942.3 984.3 1,032.0 1,085.5 1,139.0 1,191.8 1,242.7 1,292.3 4.6 Total 6,580.2 6,806.7 7,081.7 7,410.0 7,782.0 8,169.1 8,566.6 8,965.2 4.5 2014: GIA Estimates 2015-2020: GIA Projections Error tolerance for data in this table is 15% (+/-) Data is reported at the Manufacturer’s Level Rest of World Includes the Middle East (Iran, Iraq, Israel, Kuwait, Saudi Arabia, Syria and The UAE), and African countries (*) Includes Phosphors, Metallurgy, and Chemotherapy among others

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Table 6.64: Rest of World Historic Review for Germanium by End-Use Application - Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets Independently Analyzed with Annual Consumption Figures in Kilograms for Years 2006 through 2012




Infrared Optics 1,320.2 1,365.3 1,399.2 1,420.9 1,526.1 1,652.8 1,769.2 5.0


783.3 802.9 816.9 822.7 874.0 935.2 990.8 4.0

Others* 705.9 735.4 759.4 767.1 809.7 860.2 905.7 4.2

Total 5,634.6 5,684.5 5,704.9 5,667.3 5,875.4 6,148.8 6,394.5 2.1 Error tolerance for data in this table is 15% (+/-) Data is reported at the Manufacturer’s Level Rest of World Includes the Middle East (Iran, Iraq, Israel, Kuwait, Saudi Arabia, Syria and The UAE), and African countries (*) Includes Phosphors, Metallurgy, and Chemotherapy

202

Table 6.65: Rest of World 15-Year Perspective for Germanium by End-Use Application - Percentage Breakdown of Consumption Volume for Fiber Optic Systems, Polymerization Catalysts, Infrared Optics, Electronics/Solar Applications, and Other End-Use Applications Markets for Years 2006, 2014 & 2020





Others* 12.53 14.46 14.41

Total 100.00 100.00 100.00 Data is reported at the Manufacturer’s Level Rest of World Includes the Middle East (Iran, Iraq, Israel, Kuwait, Saudi Arabia, Syria and The UAE), and African countries (*) Includes Phosphors, Metallurgy, and Chemotherapy among others



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CHAPTER 7. ANNEX. LAUNCH OF NEW PRODUCTS.

1. KNIGHT OPTICAL LAUNCHES NEW RANGE OF GERMANIUM PRODUCTS.

Germanium (Ge) is a hard high-density IR transmitting material that blocks UV and VIS wavelengths. As it has a low optical dispersion, transmitting between 2-14µm, Germanium is perfect for thermal imaging and hot-spot detection in defense applications and night vision systems.

Knight Optical provides precision optical components to international customers across wide ranging industries, and the growth in the security market has translated into a high demand for germanium components which are used as front facing optical components for rugged thermal imaging cameras and CCTV.

Large events such as the Olympics, the World Cup as well as improved airport and city security mean that demand for advanced technology and CCTV cameras has seen a 50% growth in recent years and this trend is continuing.

Colin Overton, MD of Knight Optical says “In the Security and Defense markets it is crucial to use the best available materials to manufacture durable effective equipment that give the clearest image possible – even in total darkness, fog or smoke. Our optical widows and lenses are robust yet deliver exceptional quality in this demanding market.”

Clients currently using Germanium are reporting a remarkable difference in the optical quality compared to other Thermal Imaging devices. Currently its products are available on the Knight Optical website in three different sizes but all other custom sizes can be ordered.

2. IMEC, AIST AND KATHOLIEK UNIVERSITY OF LEUVE DEVELOP NEW TECHNOLOGY IMEC REVEALS GERMANIUM-TIN TRANSISTORS.

Scientists from Belgium and Japan unveiled a new process to integrate germanium-tin MOSFET devices on silicon.

Compound Semiconductor reports:

Researchers from the Katholiek University of Leuven, the IMEC research institute at Leuven and Japan's National Institute of Advanced Industrial Science and Technology (AIST) have unveiled a solid phase epitaxy process to integrate germanium-tin MOSFET devices on silicon.

Having fabricated depletion-mode junctionless GeSn p-MOSFET on silicon prototypes, the research team believes the process paves the way to making faster electronics and optoelectronics devices, such as GeSn photodetectors on silicon, for optical communications applications.

To improve the performance of next-generation CMOS transistors, researchers worldwide are integrating novel materials to silicon, to increase carrier mobility and the switching speeds of these devices. Germanium is already widely added to silicon to do just this, but for sometime now, researchers have been attempting to add tin to germanium, to boost carrier mobility further.

However, while other researchers have strived to achieve this, the limited solubility of tin in germanium under equilibrium conditions and the introduction of compressive strain when depositing on germanium substrates has hampered progress. With this in mind, Lieten and colleagues set out to develop a process that would not only overcome solubility issues but also allow them to integrate GeSn channel transistors onto silicon substrates, ready for CMOS processes.

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Figure 7.1. TEM image of NiGeSn metal S/D MOSFET (IMEC).

To fabricate their MOSFETs, the researchers wanted to deposit ultrathin and biaxially strained monocrystalline GeSn layers directly onto silicon substrates. Ultrathin GeSn layers on silicon have a good band structure for depletion-mode pMOSFETs. What's more, the biaxial tensile strain helps to reduce the difference between the direct and indirect transition, bringing the GeSn material closer to direct transition.

Germanium and tin were first evaporated from separate MBE effusion cells in an ultrahigh vacuum chamber, and then deposited at low temperature and in nitrogen, via MBE, onto cleaned silicon substrates to form a ~40nm amorphous GeSn layer. The substrate was then removed from the MBE chamber and annealed, in nitrogen, to transform the amorphous GeSn layer to a monocrystalline tensile-strained layer via solid phase epitaxy. The biaxial tensile straining is attributed to the thermal expansion coefficient mismatch between GeSn and silicon.

Exposing the silicon substrate surface to an inert gas during MBE deposition is crucial to achieving amorphous GeSn layers with a high Sn content. "Nitrogen limits adatom diffusion [of germanium and tin] on the silicon surface, helping to prevent crystalline seeds forming in the deposited layer," says Lieten.

As he adds: "It is important to start from an amorphous layer without the presence of crystalline grains that would induce the formation of a polycrystalline film, as the silicon substrate can then impose its structure onto the amorphous layer, during annealing."

The novel process took place at non-equilibrium conditions, which says Lieten, allowed the researchers to incorporate much more tin - analysis put the concentration at 4.5% - than would have been possible with liquid melt processes that typically yield 0.5 to 2.0% tin in germanium. What's more the tin was evenly distributed throughout the GeSn layer, with no sign of tin segregation at the surface, interface or within the layer.

"When you use non-thermodynamic conditions, you can use more tin," explains Lieten. "CVD and MBE growth of GeSn on silicon takes place at such non-equilibrium conditions that you can get more tin into the germanium matrix. Indeed other groups have reported up to 20% tin in GeSn alloys under these conditions."

And according to Lieten, their the new method takes place under more extreme non-equilibrium conditions, so even higher concentrations of tin can be incorporated.

With the layers deposited, the researchers went on to fabricate GeSn junctionless, pMOSFETs with a TaN/Al2O3 gate stack and NiGeSn metal source drain, with great results. Thanks to the structural quality of the GeSn channel layer, the hole mobility in the transistors increased by more than 100%, relative to p-type bulk silicon devices, with the device demonstrating an on/off ratio of 84.

Being junctionless also removes the need for source and drain formation, which the researchers say makes carrier transport less sensitive to the channel interface.

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But despite success, research continues. According to Lieten, his germanium source material contained low concentrations of gallium. "This led to a high-p-type concentration in the channel so we need to remove this dopant to get better gate control and higher mobility," he says.

What's more, during this round of fabrication, the researchers used reactive ion etching to reduce the channel thickness from ~40 nm to ~10 nm and better control the off-current. "But this leads to severe roughening of the layer which lowers the carrier mobility," explains Lieten. "We will now omit this process."

And Lieten also wants to reduce twinning defects in the layers. "We need to look deeper at the types of defects that are present," he says. "With the latest samples we had twinning and it was difficult to assess the type and density of threading dislocations as these defects were shadowed by the presence of twins."

Still, the material system has demonstrated very promising properties and the team will be looking to improve the structural and electrical properties of the material further. Crucially, Lieten has also used plasma-enhanced CVD to fabricate pure germanium layers through solid phase epitaxy, a process more tailored to industry scale fabrication.

Meanwhile, other researchers are using the combination of germanium and tin to develop mid-infrared LEDs and laser diodes.

"Because we have a direct bandgap, we can emit and absorb light much more efficiently," he says. "Some researchers are working on LEDs and even laser diodes. You can make the emission source and detector from GeSn and then integrate these together with GeSn CMOS transistors on a silicon substrate."

IMEC DEMONSTRATES STRAINED GERMANIUM FINFETS AT IEDM 2013. 10.12.2013.

At recent International Electron Devices Meeting (IEDM 2013), Imec reported the first functional strained germanium (Ge) quantum-well channel pMOS FinFETs, fabricated with a Si Fin replacement process on 300mm Si wafers. The device shows a possible evolution of the FinFET/trigate architecture for 7nm and 5nm CMOS technologies.

Since the 90nm technology, embedded SiGe source/drain has been a popular stressor method to produce strained Si that enhances pMOS devices. With diminishing device dimensions, the volume to implement stressors in the source and drain has also been severely scaled. Especially, with thin-body devices like FinFETs, the difficulty is even more pronounced. A possible relief would be to implement highly-strained material directly into the channel itself.

IMEC’s solution, growing compressively strained Ge-channels on relaxed SiGe buffer, has already proven to boost the channel mobility, and is also known for its excellent scalability potential. The use of a fin replacement process to fabricate the strained Ge channel device makes it especially attractive for co-integration with other devices on a common silicon substrate. The reported strained Ge p-channel FinFETs on SiGe trench buffer achieved peak transconductance values.

Future developments will focus on improving the device performance through P-doping in the SiGe, optimizing Si cap passivation thickness on the Ge.

“Unlike published Ge FinFETs, this work demonstrates a Ge-SiGe heterostructure-based quantum-well device in a FinFET form, which not only provides strain benefits but also enhancesshort-channel control,” remarked Nadine Collaert, program manager of the Ge/IIIV device R&D.

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“Just recently, we reported the implementation of IIIV material into the device architecture using a fin replacement process,” stated one of the directors at IMEC. “This new achievement, implementing Ge into the channel through our fin replacement process, is another key ingredient to our menu of process possibilities for monolithic heterogeneous integration to extend CMOS.”

IMEC’s research into next-generation FinFETs is part of IMEC’s core CMOS program, in cooperation with key partners including Intel, Samsung, TSMC, Globalfoundries, Micron, SK Hynix, Toshiba/Sandisk, Panasonic, Sony, Qualcomm, Altera, Fujitsu, nVidia and Xilinx.

About IMEC.

IMEC performs world-leading research in nanoelectronics. The company delivers industry-relevant technology solutions. IMEC uses its high-tech scientific knowledge and international top reputation to build a better life. Imec is headquartered in Leuven, Belgium, and has offices in Belgium, the Netherlands, Taiwan, US, China, India and Japan. Its staff of over 2,000 people includes more than 650 industrial residents. In 2012, IMEC's revenue totaled 320 million euro.

3. NATS ANNOUNCES LAUNCH OF HAWK GAMMA SPECTROMETER. 30.09.2013

The new "HAWK" gamma spectrometer from NATS is the answer to an affordable, light weight high resolution germanium detector (HPGe) based portable spectrometer offering the best price to performance ratio in this class of products. The HAWK addresses the limitations of weight, failure prone complex parts, and high cost of existing products dominating the market.

The new germanium detector (HPGe) technology based portable gamma spectrometer introduced by radiation detection instruments company NATS Incorporated fills a void in the market.

Till now commercially available high resolution field Gamma Spectrometers were either too heavy for field use or are priced beyond the budgets of most users interested in such a device. Or the real world use of these expensive tools was obscured by redundant or superficial features that adds no value in real world situations.

Recent developments in electrically cooled systems, while improving aesthetics, do not effectively solve the needs of typical end-users, who require a reliable device at an affordable price, and without the technical hurdles of complex systems.

There are several other critical limitations in newer field gamma spectroscopy systems in the market - cost, weight, and the higher chance of failed cooling systems.

In addition, the low efficiency/sensitivity to neutrons overrides the advertised benefits of "dual detection" systems now offered. In esoteric applications where detection of gamma radiation along with neutrons is a requirement, the neutron sensitivity of a small internal neutron detector is far small for practical use. The detection sensitivity to neutrons in such systems ispoor and requires a secondary hand held device. A traditional Neutron Survey instruments is low cost, reliable, and provides a viable solution in such applications where neutron detection is a requirement.

A closer look at some newer portable HPGe detection systems reveals other concerns. Restrictions in operating time mandates frequent swapping of rechargeable batteries. The recharging process takes hours, nullifying the advantages perceived in electrical cooling. In addition, electrically cooled systems require several hours of cooling before initial use. This start up wait-time can also be problematic, requiring responders to keep the units cooled at all times.

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As such the cost of such devices is driven up with mechanical cooling and neutron detection. However, most applications do not need these features.

To meet the market need for a low cost, reliable solution to field HPGe detection, NATS has introduced the HAWK. The Hawk is the world's smallest high resolution gamma spectrometer based on germanium (HPGe) detectors. The hawk is an ultra light, portable device, with a footprint much like a camping flashlight. The Hawk also provides a complete range of functions and features which are typically found in laboratory grade high purity germanium detector based gamma spectroscopy systems.

The Hawk includes a data acquisition system and analysis software. The battery powered unit uses a low power draw because it is not powering the mechanical cooler. The Hawk weighs about 4 kg and uses a small liquid nitrogen reservoir which guarantees a minimum of 20 hours of use without needing to recharge or hot swap batteries on the crystal cooling system.

The Hawk comes with an LCD touch screen to easily operate and change the device settings. It also provides the ability to use the EFFCAL software to conduct mathematical estimations of various complex field geometries using the Monte Carlo Neutron Transport Code (MCNP) based efficiency modeling.

If you are considering options for HPGe, consider a common sense field unit that is affordable, ultra light, and operates without the problems inherent in some of the expensive devices. The producer finds it addresses the needs in 90% of customers' applications.

NATS is currently offering instruments and systems used in all aspects of nuclear radiation detection and analysis. These areas include nuclear spectroscopy, radiation dosimetry, health physics, environmental analysis and medical applications.

NATS designs and manufactures certain instruments, provides customized designs for systems, and integrates products and systems using a list of US and European partners specialized in the radiation field. NATS offers systems for users in nuclear power plants, homeland security agencies, customs and border patrol, atomic energy agencies, nuclear regulatory agencies, hospitals, and research establishments worldwide.

4. BUFFALO FX INTRODUCES B1 GERMANIUM BOOSTER. 03.10.2012.

Buffalo presents the new hand built B1 Germanium Booster. Based on the classic 60’s circuit, the B1 features the traditional boost control and also a linear voice control allowing more tonal range than a traditional rangemaster type pedal.

Steve, owner of Buffalo FX says: "For that classic 60’s treble boosted tone, it really gets you there, without compromise. The voice control gives you an amazing amount of extra flexibility."

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