(Terahertz ) Nuclear replacement gauges (repost)

I am reposting, Dave in Ohio's excellent discussion of nuclear gauges.  (This blog is getting more attention than the group, and I don't want someone to miss an opportunity to comment. Thanks, Dave!)

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.