This post is from Allen Nogee, the senior analyst for lasers at our research group, Strategies Unlimited. His review of this segment of the photonics market is interesting indeed. Allen writes:
"I thought it would be a good time to review how some of the leading laser suppliers are faring so far this year and how the laser market in general is performing.
Overall, I’m happy to report, the year has gotten off to a good start. In terms of industrial lasers, while China remains weak by most accounts, Europe has been recovering nicely after several down years, and Asia outside of China is pretty strong as well, especially Japan and Korea. In North America, it is a mixed-bag, with welding sales dropping a bit, but micro materials coming in strong. In fact, consumer electronics and smartphones are driving higher micro materials laser sales worldwide, after a slowdown in 2013.
Coincidently, the demand for ever-increasingly complex smartphone designs has led to a rush by most laser manufacturers to introduce ultrafast UV lasers. These lasers can precisely machine dense electronics and drill very small holes, and they are especially good at cutting hard display glass like Gorilla glass and sapphire glass. Newport--Spectra-Physics has introduced their line of Quasar and Talon lasers to address this market and hopes to grab a big piece of it with laser powers up to 60W.
Midway through last year, Spectra-Physics announced a series of UV lasers with powers up to 45W, and this year Trumpf announced the TruMicro 3340 20W UV laser. IPG Photonics didn’t have a UV laser presence either, so last year it acquired Mobius Photonics, and they should be introducing UV fiber lasers based on this acquisition shortly. In the first half of 2014, almost all laser manufacturers were reporting that their micro materials laser sales were “good” or “improving.”
As for individual laser manufacturer sales by company, Coherent and Trumpf, the two largest laser manufacturers, each remain relatively flat, with Trumpf gaining a bit from the improved condition in Europe. Coherent’s Q1 2014 revenue of $199.2 million is almost exactly the same as its Q1 revenue in 2011 through 2013, plus or minus a few million. Coherent relies less on revenue from materials processing (only about 14% of revenue) and more on scientific, micro-electronics, medical, and components, which has helped it to weather some laser storms in the last few years. Scientific is still sharply down for Coherent, but micro-electronics has nicely filled in that gap.
While Coherent has been consistently flat these last few years, IPG Photonics remains consistent for growing its revenue. In Q1 2014, IPG reported revenue of $170.6 million, which is a 20.2% increase over Q1 2013, which was a 15.1% increase over Q1 2012, and which was a 23.3% revenue increase over Q1 2011. Anyway, you get the picture.
There is little question that IPG is the dominant player in high-power fiber lasers. While other companies do produce some very capable high-power fiber lasers, competing with IPG is like trying to hit a moving target. In just a few years, IPG has increased the wall plug efficiency of its newest lasers to over 45% while decreasing their manufacturing cost by a factor of two or more. Even Chinese laser manufacturers, known for their super-low costs, haven’t been able to compete with IPG.
And finally among the group of large laser manufacturers, we have Newport and Rofin-Sinar, both of whom have sales that can widely swing up or down depending on how the segments that they depend on are performing. Through most of 2012 and 2013, Newport got battered by rapidly declining R&D and military sales, but it seems to be making a bit of a comeback in 2014, reporting very strong micro-electronics laser sales, and it seems to be doing especially well with its line of UV lasers.
Rofin-Sinar also suffered in 2012 and 2013 largely due to slowdowns in Europe, a solar industry that was underperforming, and a CO2 laser business that has slowing growth. Unfortunately, Rofin hasn’t fared so well this year either, but its fiber lasers are contributing to some growth, especially fiber lasers to China, although competing with IPG in this area can be tough.
Overall for 2014, total laser sales are looking up, and some of the laggard areas are starting to correct themselves. In my Worldwide Market for Lasers report released in January of this year, I forecasted worldwide laser revenue growth for this year to be around 6.0%. So far this seems to be right on track from what we’re seeing now, and if things do stay on track (which they almost never do) we will have the largest percent increase in laser revenue growth since 2011. This would be very good indeed."
Related article in Laser Focus World:
Related reports from Strategies Unlimited: