Sean MaguirePartner at Sequoia Capital and early investor in several Elon MuskUS companies, says people aren't paying enough attention to niche chemicals.
In an episode of the “Relentless” podcast that aired on November 17, Maguire said he could invest in the chemical industry if he had $10 billion to start a business.
“The chemical industry is one of the most undervalued industries in the world for many reasons,” Maguire said. He added that most people don't think about the industry that supports the production of almost all commercial and household products, according to the 2022 forecast. report from the Cybersecurity and Infrastructure Security Agency.
And those who know about the industry don't fully understand it, considering it purely a resource-based industry, Maguire said.
“But most of the industry, I would say at least 25%, is high-powered specialty chemicals that are actually very rare. Often there is only one company in the world that produces some specialty chemicals,” he said. (Specialty chemicals account for about 23% of the industry, according to a CISA report).
Maguire said those chemicals could be critical to another company's production, as he said was the case at one of Musk's businesses, and that losing access to a key chemical could seriously delay or disrupt projects. According to the company, specialty chemicals include “adhesives, sealants, flavors and fragrances, food additives and explosives.” CIS.
According to Deloitte, the chemicals industry is in decline and output is expected to decline by 0.2% next year. Chemical industry prospects for 2026. While the report forecast continued excess capacity in basic chemicals, it found that specialty chemicals generate higher profits.
“Specialty chemicals tend to be less commercialized and avoid hypercompetition in commodity chemical markets,” the report said.
While demand for chemical products in the construction, automotive and consumer goods industries is likely to continue to decline, the semiconductor market could be a bright spot, according to a Deloitte report. Boom in Artificial Intelligence Data Centers helps drive growth, according to Deloitte.
In 2025, the chemical industry lagged far behind the overall market. The S&P 500 Chemicals Index is down 5% for the year, while the S&P 500 is up more than 11%.
