After graphene was first produced at the University of Manchester in 2004, it was hailed as a wonder material, stronger than steel but lighter than paper,But two decades on, not every UK graphene company has made the most of that potential,Some show promise but others are struggling,Extracted from graphite, commonly used in pencils, graphene is a latticed sheet of carbon one atom thick, and is highly effective at conducting heat and electricity,China is the world’s biggest producer, using it to try to get ahead in the global race to produce microchips and in sectors such as construction.

In the UK, a graphene-enhanced, low-carbon concrete was laid at a Northumbrian Water site in July, developed by the Graphene Engineering Innovation Centre (GEIC) at the University of Manchester and Cemex UK.“The material when it came out of academia was hyped to death … but the challenge is going from lab to fab,” says Ben Jensen, the chief executive of 2D Photonics, a startup spun out from the University of Cambridge that makes graphene-based photonic technology for datacentres.Jensen also invented Vantablack coatings, made of carbon nanotubes – rolled-up sheets of graphene – and known as the world’s “blackest black” because it absorbs 99.96% of light, at the UK company Surrey NanoSystems that he founded in 2007.The material’s artistic rights were sold exclusively to the sculptor Anish Kapoor, and BMW used it on its X6 coupe to create the “blackest black car” six years ago.

“This is the challenge when you have new materials trying to displace an incumbent technology,” Jensen says,“The value proposition must be extremely good, but there also must be a way to manufacture the material and manufacture it at scale for the application … then you have to meet price expectations because there’s no point in delivering something that’s costing 10 times more than the incumbent,”Germany’s Bayer tried to produce carbon nanotube products in bulk but shut down its pilot factory more than a decade ago after the expected surge in demand failed to materialise,The material is now mainly used as a filler to strengthen plastic products,The company described the potential applications of nanotubes as “fragmented”.

More promising are the graphene-based optical microchips developed by 2D Photonics’ subsidiary CamGraPhIC, which are based on research done at the University of Cambridge and Italy’s CNIT research institute.At the moment, silicon-photonics microchips convert electrical data into optical data to transmit it through fibre-optic cables, but the firm says its graphene chips deliver more data in the same period of time and at far lower cost.They consume 80% less energy and can operate in a much wider range of temperatures, reducing the need for costly water- and energy-hungry cooling systems for AI datacentres.Sending data via silicon also causes delays.Jensen compares it to a 16-lane motorway that suddenly narrows to a single lane because of roadworks, forcing everything to slow down.

Graphene photonics, he says, are like a motorway with hundreds of lanes.“What we’ve solved is the ability to grow consistent ultra high-performance graphene and to build it into a device,” he says.“And don’t forget, this is a material that’s one atom thick.It’s insanely difficult to do this.”CamGraPhIC was founded in 2018 by the Cambridge nanotechnology professor Andrea Ferrari, who also runs the Cambridge graphene centre, and Marco Romagnoli, who leads advanced photonics at CNIT in Pisa and is the startup’s chief scientific officer.

Its parent, 2D Photonics, has just secured funding of £25m from backers including Italy’s sovereign wealth fund, Nato and Sony innovation funds, Bosch Ventures and the UK’s Frontier IP Group, and uses a former Pirelli photonics research site in Pisa.It plans to create a pilot manufacturing site in the Milan area to produce 200mm-wide wafers at scale, and is confident of obtaining the necessary funding of €317m (£276m) by the end of the year.Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotionAside from datacentres, the company’s chips can be used in high-performance computing, 5G and 6G mobile data systems, aircraft systems, autonomous cars, advanced digital radar and satellite-free space communications.Paragraf, a University of Cambridge spinout based in the nearby village of Somersham, has also fared well over the past decade with backing from the UK Treasury.It produces graphene-based electronic devices, including sensors for electric cars, and biosensors for the early detection of disease and other uses in healthcare and agriculture.

It recently secured $55m (£41m) from investors including the United Arab Emirates sovereign wealth fund, which took a 12.8% stake in Paragraf.A more recent startup, Graphene Innovations Manchester, launched in 2021 by Vivek Koncherry, struck a deal with Saudi Arabia last December for the world’s first commercial production of graphene-enriched carbon fibre, used in construction for roofs and facades, as well as street light poles.It has started making it in Tabuk with a local partner, and says it is on track to produce 3,000 tonnes by 2026.Other businesses, however, have found the going tougher.

One of the sector’s first companies was Applied Graphene Materials, founded by Prof Karl Coleman in 2010 and spun out from Durham University.It launched a number of products including an anti-corrosion primer and a protective bike-detailing spray, which made it on to the shelves in Halfords.But the loss-making enterprise was wound down in 2023 and Canada’s Universal Matter acquired its main business.Ron Mertens, the owner of the website Graphene-Info, says: “As is true in the wider materials industry, things take a very long time to reach the market.Many graphene producers and developers never managed to generate meaningful revenues or become profitable.

”The Gloucestershire-based Versarien grew from a garage startup in 2010.Supported by Innovate UK, a government agency, it has developed graphene powders and other products for use in sensors, low-carbon concrete, paints, inks for electronics and textiles such as Umbro running gear and prototype stealth materials for the US military.The Aim-listed company expanded into Spain and South Korea but ran into financial difficulties and was forced to place several subsidiaries in administration or voluntary liquidation in July.Versarien has been seeking to sell its assets, including its patent portfolio, and only has enough cash to keep going until the end of October.Depending on the deal, it may undertake a solvent liquidation of the company or become a cash shell.

An investment deal with a Chinese partner collapsed after the UK government intervened to block any collaboration on technology.It would be a sad end for a once promising graphene business.