Bordeaux, France--Participation rose at last week's Invest in Photonics 2012, an international business partnering convention focused exclusively on photonics venture capitalist (VC) investment, despite a tough investment decade in photonics.
Industry leaders, VCs, photonics specialists, market analysts, and trade representatives from across Europe, the US, and Asia joined the 19 companies selected for the special funding session. This raised attendance to 150, up around 20% from the 2010 biennial event. Total funding targeted by selected companies also increased to $90 million, more than doubling earlier funding targets.
The global photonics market is currently estimated at $395 billion and expected to reach $632 billion by 2015, according to SPIE world market figures. The world market underwrites 1.7 million jobs. The market in Europe, made up of approximately 5,000 small and medium enterprises (SMEs) and 1,000 research institutes, is estimated at $79 billion. In Europe, Germany leads with 20% of the market, followed by France and the UK, each with 14%, according to Photonics 21.
However, according to analysts, photonics remains an industry that is not easy to segment due to the large amount of industry overlap. As an enabling technology, photonics is often commercialized outside of its industry. This makes it challenging for VCs to evaluate opportunities.
“Invest in Photonics is the only venue that informs VCs about future applications in photonics which we back by providing them with market data from diverse economic sectors,” says Invest in Photonics chairman Giorgio Anania. “The photonics industry will have a major impact on a range of industries. We bring the key players together to help make this happen.”
In order to point VCs towards attractive opportunities in emerging markets, analysts and speakers from world-leading companies focused on three fast growth markets: Consumer goods, cleantech and healthcare, and Asia. Topics covered included early disease diagnosis through new detection methods, communication and data infrastructure in the 21st century, consumer devices, LED lighting, lasers, advanced displays and sensors, 3D IC packaging, micro-fabrication of glass and PCB, and solar energy.
“Smartphones, for example, are made using 13 different laser-based machinery, contain photonics components, and are enabled using fiber-optic technology,” notes Steve Anderson, industry and market analyst for SPIE. “A significant number of commercially successful companies that rely on photonics technology do not associate themselves with the photonics industry,” he adds.
Several speakers spoke about the market for lasers, which, according to Anderson, continues to exhibit strong growth for certain types of products, in particular fiber lasers. These are being adopted faster than any other laser technology in history. For directed energy, lasers allow processing by the single unit, versus batch, enabling customization or adaptation to upstream process changes. Lasers enable the processing of difficult materials like glass, ceramics, plastics, metals and alloys. For green processes, laser ablation is a dry process that avoids the use/disposal of dangerous chemicals that would be required for wet/dry etching. For some applications (marking, scribing), the parts don’t even need cleaning, which would otherwise waste water or solvents.
Francois Valencony, general manager at Merieux Developpment, and Eric Mottay, president and CEO of Amplitude Systemes, also discussed the growth potential of ultrafast lasers in medical and other large-volume applications.
Another hot technology highlighted during the conference was LED, especially for lighting. LED currently represents half the sales involved in backlighting in televisions and mobile devices. Thirteen percent compound growth is expected over the next two years, with estimated growth from $11.4 billion in 2012 to $17 billion in 2018, says Yole Developpement in a market research report.
“LED is unlike any other lighting technology in history,” says Hans Nikol, vice president, LED Innovation and Strategy at Philips Lighting. “Today, every light technology from the candle to fluorescent and halogen co-exists. We strongly believe that LED will wipe out previous existing lighting technologies.”
Another emerging area is integrated photonics, doing with light what has been previously achieved with electronics. “Areas where photonics can provide solutions include the necessity to reduce the power consumption of running and cooling computer servers, as well as routers that are becoming increasingly more power-hungry,” says Pierre Billardon, president, Carl Zeiss France. “Other markets are reducing the cost of healthcare and improving the early detection of debilitating diseases, like Alzheimer's.”
In terms of opportunities in solar, Raffi Garabedian, chief technical officer at First Solar, pointed VCs to four areas offering investment potential: Incremental technological developments that can improve the dominant platform technologies with minimal factory retooling; metrologies for improved quality and process controls in manufacturing; balance of system controls for low-cost power conversion, grid integration and controls and prediction and forecasting: disruptive new photovoltaic technologies with promise of low system costs; and improved efficiency.
Ian Jenks, chairman of Intune Networks, says that in a world moving to Zetabyte communications, photonics will be important in solving problems associated with the need to develop new architectures that will be required to scale virtualized networks economically.
Regarding Asia, analysts acknowledged the lead that many Asian companies have in certain areas of photonics. Lead areas cited in particular were AMOLED, where Samsung and LG Display are well-established, followed by several emerging companies from around Asia. China has the top capacity in LED reactors, even though it only started producing in 2009. Participants voiced concerns about IP protection.
Nevertheless, following Billardon’s presentation of Zeiss’ successful entry two years ago into fast-growth markets providing medical equipment to hospitals in tier II cities, such as Chengdu, he says: “China is a great business opportunity. Go there!”
The 2012 Invest in Photonics selected company award went to Belgian-based Ovizio Imaging Systems, a company developing digital holography for quantitative microscopic imaging platforms.