26th Apr 2022
With emerging applications ranging from chemical engineering to cybersecurity, financial services, and manufacturing, quantum computing has the potential to drive innovation across an array of industries. It’s for this reason that a global push for investments in this next generation of computing is underway.
As worldwide research and developments in the realm of quantum computing continue to accelerate, several quantum computing companies are emerging as frontrunners in the race to transform potential quantum applications into reality.
The quantum edge
Currently, computers use binary signals (the “0s and 1s” of code) to solve problems. While the capabilities of computers have evolved over time, they continue to struggle with calculations called combinatorics — where calculations involve finding complicated arrangements with the goal of optimizing performance.
Quantum computers are based on a different model of thought, whereby binary questions are replaced with questions of probability and different combinations of outcomes are assessed. This multi-dimensional outlook enables quantum computers to solve certain problems quicker and more efficiently than traditional computers1. Understandably, the superior capabilities of quantum computing have spurred on a plethora of research on the subject.
Worldwide efforts to tap into quantum computing
Global governments and organizations have exhibited a rising interest in advancing their quantum computing capabilities and knowledge. From 2020 to 2021, Europe spent $7.6 billion in public funding on quantum computing, leading China and the United States, who have spent $2.5 billion and $2.2 billion respectively2.
Europe’s position in the race does not remain guaranteed, however, with several world powers pledging further government funding for quantum computing. China has announced $15 billion in planned government funding, while the European Union and the United States have pledged $7.2 billion and $1.3 billion respectively3.
Turning to private funding and quantum computing startups, it’s the United States that leads the pack with approximately 60% of all global private investments and over 40% of quantum technology startups worldwide4.
In addition to financial contributions, leading world powers are also focused on broadening their understanding of quantum computing on the academic front. Since 2010, over 6,818 quantum computing research papers have been published, with Europe, North America, and China writing 2,403, 1,916, and 914 papers respectively5.
As a technology that specializes in solving complex problems, quantum computing has the potential to transform several industries.
One major application could lie in cybersecurity. Since the outbreak of the COVID-19 pandemic and the resulting increase of people working from home, fewer workers have access to their companies’ relatively-secure office environments. This has led to a rampant rise in cyber attacks, with the U.K.’s NCSC (National Cyber Security Center) reporting that ransomware attacks have doubled within the last year6. This includes attacks on the Colonial Pipeline in the U.S. as well as Ireland’s Health Service Executive.
Quantum computers, together with AI and machine learning, have the potential to repel waves of ransomware attacks with greater success than traditional computers7.
There is also strong potential for quantum computing to transform the pharmaceutical industry. Unlike traditional computers, quantum computers are expected to have the ability to accurately calculate and adjust molecular properties. This would enable pharmaceutical manufacturers to not only forego unnecessary rounds of trial-and-error lab experiments but develop more effective pharmaceutical drugs at a quicker speed and lower cost8.
This advantage of quantum computing may also have implications in manufacturing. Due to its superior ability to analyze properties and predict their performance, quantum computers may be able to assist engineers in designing better plastics, chips, fuel cells, and other materials.
Other quantum computing use cases, including applications in finance, telecommunications, and the automotive industry, are already coming to life.
Quantum applications coming to life
As the quest for understanding advances, several quantum computing stocks are emerging as frontrunners in the race to introduce real-world quantum applications.
Quantum computing company IonQ, Inc, together with global investment firm Goldman Sachs and fellow quantum computing company QC Ware, determined that quantum computing could have a far-reaching impact on the financial services industry.
In a joint research paper, the companies proved how IonQ’s quantum computers are powerful enough to apply an advanced algorithm developed by Goldman Sachs and QC Ware that could speed up Monte Carlo simulations that enable advanced problem solving. This breakthrough could impact industries beyond finance, including climate science, robotics, and telecommunications9.
IonQ, Goldman Sachs, and QC Ware have also been developing quantum algorithms that, if effective, would enable financial service providers to evaluate risks and simulate prices for a range of financial instruments at greater speeds than is currently possible with existing solutions10.
A research team led by members of the University of Science and Technology of China in Hefei has established the world’s first integrated quantum communication network11. Comprising 700 optical fiber cables and two ground-to-satellite links, the network has a reach of 4,600 kilometers and serves state and local banks, municipal power grids, and e-government websites12.
When it comes to tracking down the best quantum computing stocks to buy, IBM is a company that is worth noting. The technology company is advancing its quantum computing business on numerous fronts.
In 2021, IBM unveiled a quantum computer that will be used by Fraunhofer research institute, making it the first quantum computer to be used in Germany. German Chancellor Angela Merkel, who referred to the computer as a “miracle of technology”, expects it to play a pivotal role in the country’s technological innovation. The Fraunhofer research institute will use the computer to advance Germany’s quantum computing understanding; a project that will cost €40 million over the next four years13.
IBM has also made inroads in Japan, supplying a quantum computer system to a group of Japanese companies including Toyota, Hitachi, and Toshiba among others. The computers, which were set up at the Kawasaki Business Incubation Center in Tokyo, have a range of potential applications within the chemical manufacturing and automotive sectors.
Mitsubishi Chemical expects to use the system to run simulations that will drive the creation of chemical materials, while Toyota may use the computers to analyze big data from car trips, in an effort to further autonomous driving development14.
Quantum future growth
As the potential applications and importance of quantum computing continues to expand, analysts remain optimistic that this new generation of computing will become a breakout industry over the coming years. Honeywell has predicted that quantum solutions could form a $1 trillion industry by 203015.
Global market research firm IDC has forecasted the quantum computing market to grow from $412 million in 2020 to $8.6 billion in 202716. Given that so much confidence has been placed in the potential growth in the quantum computing sector, a decision to invest in quantum computing could be worth considering for any potential investor with an interest in emerging technologies.
For current performance and holdings, please visit defianceetfs.com/QTUM
1 “Quantum Computing Is Coming. What Can It Do?”, 16 July 2021, https://hbr.org/2021/07/quantum-computing-is-coming-what-can-it-do
2 “A quantum wake-up call for European CEOs”, 20 December 2021, https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/a-quantum-wake-up-call-for-european-ceos
3 “Quantum computing use cases are getting real—what you need to know”, 14 December 2021, https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/quantum-computing-use-cases-are-getting-real-what-you-need-to-know
4 “The Quantum Technology Monitor”, September 2021, https://www.mckinsey.com/~/media/mckinsey/featured%20insights/the%20rise%20of%20quantum%20computing/quantum%20technology%20monitor/2021/mckinsey-quantum-technology-monitor-202109.pdf
5 “A quantum wake-up call for European CEOs”, 20 December 2021, https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/a-quantum-wake-up-call-for-european-ceos
6 “National Cyber Security Centre: Annual Review 2021”, Accessed 27 January 2022, https://www.ncsc.gov.uk/files/NCSC%20Annual%20Review%202021.pdf
7 “Quantum Computing: 5 Potential Applications”, 26 January 2022, https://www.iotworldtoday.com/2022/01/26/quantum-computing-5-potential-applications/
8 “A business leader’s guide to quantum technology”, 15 April 2021, https://www2.deloitte.com/us/en/insights/topics/innovation/quantum-computing-business-applications.html
10 “Goldman Sachs, QC Ware and IonQ Demonstrate Quantum Algorithms Proof-of-Concept for Financial Services”, 21 September 2021, https://www.hpcwire.com/off-the-wire/goldman-sachs-qc-ware-and-ionq-demonstrate-quantum-algorithms/
11 “The world’s first integrated quantum communication network”, 06 January 2021, https://phys.org/news/2021-01-world-quantum-network.html
12 “The world’s first integrated quantum communication network established”, 07 January 2021, https://www.techexplorist.com/world-first-integrated-quantum-communication-network-established/37174/
13 “IBM unveils first quantum computer in Germany”, 15 June 2021, https://www.dw.com/en/ibm-unveils-first-quantum-computer-in-germany/a-57909494
14 “Toyota and Mitsubishi Chemical use IBM quantum computer”, 9 July 2021, https://illinoisnewstoday.com/toyota-and-mitsubishi-chemical-use-ibm-quantum-computer/291193/
15 “Honeywell Quantum Solutions And Cambridge Quantum Computing Will Combine To Form World’s Largest, Most Advanced Quantum Business”, 08 June 2021, https://www.honeywell.com/us/en/press/2021/06/honeywell-quantum-solutions-and-cambridge-quantum-computing-will-combine-to-form-worlds-largest-most-advanced-quantum-business
16 “IDC Forecasts Worldwide Quantum Computing Market to Grow to $8.6 Billion in 2027” 29 November 2021, https://www.idc.com/getdoc.jsp?containerId=prUS48414121#:~:text=IDC%20Forecasts%20Worldwide%20Quantum%20Computing%20Market%20to%20Grow%20to%20%248.6%20Billion%20in%202027,-NEEDHAM%2C%20Mass.%2C&text=This%20represents%20a%206%2Dyear,quantum%20computing%20as%20a%20service.