2016 will go down as quite a good year for lasers, in most respects, but there were some troubling signs of problems as well. Both Rofin and Newport were acquired by other companies and in both of their cases, in my opinion, it was because their revenue growth was lacking. Neither company was in dire shape, but both companies could benefit from a makeover, which is what these sales can offer these companies.
While 2016 was a year when some large laser companies struggled, it was also a year when many smaller laser companies did really well. In most cases, what separated the hot from the not-so-hot had to do with the markets which they were in. The more a company was a “laser company” the more it struggled, the more a company was a “medical laser company” or a “communications laser company” or even a focused “material processing laser company” the better it performed. You don’t want to be a company that sells hammers, you want to be a company that sells specialized tools to specific markets. There is a very fine distinction between the two, but a very important one nevertheless.
The best material processing segment in 2016 in terms of laser revenue growth turned out to be with the KW+ class of lasers. As a whole, this segment grew in laser revenue about 5% in 2016, quite a bit lower than the 9.5% laser revenue growth we experienced in 2015. What changed was high amount of economic uncertainty we experienced in 2016, the purchase of Rofin by Coherent which caused even more uncertainty, and the slow-down of fiber lasers purchased to replace CO2 lasers, since at this point, many that will be replaced have already been replaced.
