While much anticipated, the terahertz replacement for nuclear gauges
can only replace a small fraction of the nuclear gauge market.
The important feature of nuclear gauges is that they have excellent
penetrating power for metals, soils, and blacktop. In fact most
nuclear gauges are sold to highway departments to determine the
thickness and density of blacktop in highway construction. Other
gauges are used to determine the thickness of roll stock (such as
aluminum and steel) in real-time during production. They can be used
to determine the moisture content of soils, using different isotopes.
Some gauges can determine the amount of liquid gas remaining in a gas
cylinder. None of these uses can be replaced by terahertz. In
addition, virtually all of these devices retail for under $20,000 and
many for under $5,000, making terahertz non-competitive on a cost
basis The devices for the most part are very light weight and easily
portable, needing no external power supply.
The retailers of nuclear devices are also well aware of the regulatory
burden and so make it as easy as possible for users to comply with NRC
requirements. Further in most of the devices the quantity of nuclear
material is very limited. It would takes hundreds of devices to
create a meaningful "dirty bomb". To be fair, for those nuclear
gauges where significant penetration of dense materials such as steel
is required, gamma radiation is used, which can present a health
hazard if not used properly.
As such, it is impossible for the DHS to obsolete nuclear gauges and
replace them with terahertz devices. Recall that most of us have
several nuclear gauges in our homes (using Americium 241), otherwise
known as smoke-detectors. This is the same isotope used in most
nuclear-gauge type moisture detectors. The nuclear gauges with the
most risk from a DHS standpoint are those with the most penetrating
power (using stong gamma sources), and those are the same ones that
cannot be replaced by terahertz.
Terahertz does have a niche for paper, thin metallic foils, moisture
content (perhaps lumber or paper), and other non-metallic and non-
liquid production processes, but these comprise only a small fraction
of the total nuclear gauge market. Under some conditions, the bother
of regulatory requirements may make terahertz a better alternative
despite higher initial cost.
Some companies have continued to talk only of the Total Addressable
Market (TAM) of nuclear gauges without mentioning how little of that
TAM can be addressed by their products. The implication is that a
vast market exists for their products which with some regulatory help
would instantly fall into their laps. This is decidedly an
exaggeration and seriously misleads investors.
That is not to say that significant revenue for a small company cannot
accrue from replacement nuclear gauge products, but I expect it to be
on the order of a few million, not 30-100 million a year.
NOTE: This opinion is the author's alone and is neither investment
advice nor a replacement for your own due diligence.
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