(Reuters) - British quantum dots maker Nanoco Group Plc (>> Nanoco Group PLC) expects to sign a new licensing deal in the next six months with a "big company", which will use its technology in digital displays.

Quantum dots are semiconductor crystals 10,000 times finer than a human hair. They convert electrical energy into light and can be manipulated to produce precise colours, and are mostly used in televisions.

Nanoco said last month it switched from exclusive to non-exclusive its agreement with Dow Chemical Co (>> Dow Chemical Co) for commercial production of quantum dots to be used in digital displays.

"We've had a number of companies over the last three years come to us, wanting to buy, or take licence, or partner in some way," CEO Michael Edelman told Reuters.

Edelman declined to give details but said Nanoco was talking to a number of companies like Dow that were "well recognised".

Nanoco would still have a partnership with Dow and hoped to receive its first-ever royalty payment this year after Dow received some commercial orders, Edelman said.

For Nanoco, which has a market value of about 100 million pounds, going non-exclusive won't be easy at first.

Commercially producing quantum dots has been one of the biggest challenges, forcing companies like Nanoco to partner with the likes of Dow, who have the capacity and the infrastructure to do so.

Nanoco posted a wider adjusted loss for the six months ended Jan. 31, on Tuesday, hurt by the absence of a milestone payment from Dow which was there last year.

The Manchester-based company's shares fell as much as 7 percent to 42.35 pence.

The company could potentially look to partner with others such as Merck KGaA (>> Merck KGaA), BASF SE (>> BASF SE), Bayer AG (>> Bayer AG) and 3M Co (>> 3M Co), said Janardan Menon, an analyst at Nanoco's in-house broker Liberum.

"We continue to believe that there will be significant demand for Nanoco's cadmium-free quantum dots from a variety of display OEMs across China, Taiwan, Japan and the US, whose needs have not been adequately addressed under the previous Dow agreement."

The global market for quantum dot displays and lighting is expected to grow to $10.8 billion by 2026, from about $2 billion by 2017, according to market research firm Touch Display Research.

Nanoco, along with Nanosys Inc, QD Vision Inc and Quantum Materials Corp (>> Quantum Materials Corp) are the four biggest makers of quantum dots.

3M, BASF declined to comment. The other companies didn't immediately respond to mails seeking comment.

(Reporting by Esha Vaish in Bengaluru; Editing by Sayantani Ghosh and Shounak Dasgupta)

By Esha Vaish