OIDA forum showcases growth markets

Sept. 15, 2007
SAN JOSE, CA-Global opportunities and issues were the theme of “Perspectives on the Optoelectronics Industry,” a two-day forum sponsored September 11-12 by the Optoelectronics Industry Development Association (OIDA; Washington, DC).

SAN JOSE, CA-Global opportunities and issues were the theme of “Perspectives on the Optoelectronics Industry,” a two-day forum sponsored September 11-12 by the Optoelectronics Industry Development Association (OIDA; Washington, DC). The event was the first of three DARPA-sponsored OIDA forums designed to address key issues in the optoelectronics industry, with a focus on industry advances, challenges, and growth opportunities.

In addition to much discussion about the challenges optoelectronics firms face worldwide in protecting their intellectual property (IP), the forum focused on current business conditions in seven key industry arenas: non-telecom applications of high-power semiconductor lasers; consumer optoelectronics; communications and service providers; electronic, photonic, and life science measurements; high-power lasers and applications; defense/homeland security; and transportation. According to OIDA, these industries have undergone significant changes in the last five years, with increased use of outsourcing, changes in business models, differing R&D pipelines, and new capital constraints. Each of the speakers discussed the significance of these factors, how their organizations are adapting to compete, and identified the key opportunity areas for the next decade.

“Everything that was done with an electron in the last century will be done with photons in this century,” said David Morse, Senior vice president & director of Corporate Research for Corning (Corning, NY). “OIDA has done an outstanding job of assembling a comprehensive slate of speakers describing the businesses that are making this happen.”

The first day’s keynote, presented by Henry Kressel of Warburg Pincus (New York, NY) focused on the global migration of technology and what this means for O/E companies in terms of R&D, manufacturing, and IP protection. He claimed that the growing cost of doing business outside of the United States, particularly with regard to finding and retaining a skilled workforce in certain countries, is impacting the migration of manufacturing to offshore locations. And this should be good news for U.S. high-tech companies because it means the R&D and manufacturing processes may once again reside on the same continent, which in turn will enhance the ability to develop and protect IP.

“Cross-fertilization in technology is a key driver behind innovation,” Kressel said. “And the United States continues to be a great place for innovation because continuous innovation creates continuous economic value. It trumps cost cutting as a long-term strategy.”

While globalization and consolidation will continue, he added, innovation and marketing cannot be separated. “If you keep manufacturing too far away from R&D, it will atrophy,” he said.

Market forecast

Another highlight of the OIDA forum was the release of the organization’s preliminary ninth annual global optoelectronics market summary and forecast, which will be published and distributed to OIDA members in October 2007. According to the report, in 2006 the optoelectronics market achieved new highs with optoelectronics-enabled products and components reaching $565 billion, a 14.5% increase over 2005. OIDA forecasts strong and steady growth over the next decade for the optoelectronics-enabled and components market, with revenues expected to surpass $1.2 trillion by 2017 and a 2007-2017 compound annual growth rate (CAGR) of 7.7%.

Within the optoelectronics-enabled products, OIDA believes the growth drivers over the next decade will be solar, computing/processing and consumer displays/TVs. These markets will achieve 2007-2017 CAGR of 17.3%, 5.6%, and 6.3% respectively. Their combined total revenues in 2017 are forecasted to top $425 billion. In 2006, these three markets achieved revenues of $198 billion.

The yearly growth for optoelectronics enabled products and systems in 2006 ranged from 8% to 43%. Growth was led by environment/sensing (43.1%) and medical care/welfare (28.6%). The two biggest revenue segments, consumer display/TV and computing/processing both demonstrated solid growth of 20.4% and 8.1% in 2006 over 2005, respectively.
-Kathy Kincade

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