Commercial markets drive growth of laser industry
The marketplace for lasers is undergoing fundamental changes as the industry matures and its markets evolve from traditional scientific applications to those with a more commercial emphasis. Recognition of these changes is influencing the strategic planning and vision of the future for many companies, including Coherent`s Laser Group. Coherent`s recent investments in diode-pumped solid-state (DPSS) lasers and semiconductor lasers illustrate how we are supporting and accelerating such market chan
Commercial markets drive growth of laser industry
The marketplace for lasers is undergoing fundamental changes as the industry matures and its markets evolve from traditional scientific applications to those with a more commercial emphasis. Recognition of these changes is influencing the strategic planning and vision of the future for many companies, including Coherent`s Laser Group. Coherent`s recent investments in diode-pumped solid-state (DPSS) lasers and semiconductor lasers illustrate how we are supporting and accelerating such market changes two promising areas of laser technology.
Before considering the future, however, it`s important to examine where the laser industry is today. Growth in traditional scientific markets has slowed, although this market remains a key strategic segment for Coherent. The maturing of the industry, coupled with development of new technologies, is finally opening up the long-awaited OEM and industrial markets. As a result, laser manufacturers have attempted to increase their growth by expanding beyond traditional niches.
Hence, company differentiation by technology and associated markets is eroding, and a noticeable homogenization around solid-state technology is occurring. As an example, consider the move by "scientific" laser companies to pursue industrial or commercial laser markets. Development of the green DPSS laser has enabled DPSS-laser producers to address applications previously reserved for low-power, air-cooled argon-ion lasers.
An additional influence is the introduction of semiconductor lasers, which are causing a "technological discontinuity" within many markets.
At Coherent we have developed a dual strategy for growth based on further increase in our share of scientific markets and on opening completely new markets, both in terms of applications and geography. In general, we plan to expand our customer base from primarily the scientific and research market to a diverse range of OEMs. Geographically, we expect to grow our overall business and intend that eventually two-thirds of our revenues will be derived from outside the USA.
We view DPSS lasers as a key component of this future growth; we see them as an innovative, enabling technology and not merely a replacement for existing sources in established applications. This technology has already attracted a variety of both old and new players because the technological barriers to entry are perceived as low. Only a few companies are dominant, however, because the resources required for developing DPSS lasers and manufacturing, distributing, and supporting them have been underestimated by many people. Coherent`s DPSS success is built on eight years of development concentrating primarily on CW technology at IR and green wavelengths; we are currently shipping third-generation products. Other successful companies have spent similar amounts of time developing Q-switched technology.
Diode-pumped-solid-state lasers also present an opportunity for a conventional laser company to build a bridge from existing laser expertise to the most important new technology area, semiconductor lasers. Diode-pumped solid-state devices combine both traditional solid-state laser components with diode lasers.
Growth by acquisition
Coherent`s continued advance in DPSS lasers requires attainment of both new technology and new channels of distribution and support for new markets, specifically OEMs and non-US customers. To a large extent, we`ve found that the most cost-effective way to accomplish this is through acquisition.
Amoco Laser Co. (Naperville, IL) was an early entrant into the DPSS laser field and had developed a significant base of patents and intellectual property in the technology. Obtaining these properties was Coherent`s primary motive in the acquisition of Amoco`s DPSS laser business. Nonetheless, while development and maintenance of a technological edge is an important component of our strategy, I`d like to be clear that Coherent does not plan on using this advantage as a weapon to stifle competition. History shows clearly that extensive litigation to enforce patents has been far more profitable for lawyers than it has been for laser companies. Furthermore, this is not a game in which any single player holds all the cards. Hence, cooperation is to the advantage of everyone.
Joining with Adlas (L?beck, Germany) provided benefits in both technology and markets. Adlas`s expertise in Q-switched technology complemented the existing expertise at Coherent in CW technology, allowing us to broaden our product line. The location of Adlas, in Germany at the heart of a lively European OEM and commercial market, also provided an immediate improvement in our ability to sell to and support this customer base (see photo on p. 55).
Semiconductor manufacturing capabilities were clearly something simpler to acquire rather than develop internally, and this was the motivation for purchasing the diode-laser business from Uniphase Inc. (San Jose, CA). Diode lasers are a key component in DPSS lasers, so proper service of internal needs, as well as the needs of OEMs with custom designs and products with specific performance characteristics, means having the capability to customize the diode lasers.
Beyond DPSS lasers, diode lasers themselves constitute an enabling technology with a tremendous future potential for system integration. We consider diode-laser technology a key component of our future success in the medical segment of our business.
Support: the key to OEM business
The final element that must not be overlooked is customer support. Coherent and several other companies have built successful scientific markets by setting up support infrastructures to meet the specific needs of these end users.
Unlike the scientific business, the OEM market is global in nature and requires prompt and efficient support anywhere in the world. The laser
purchasing cycle is much longer with OEM customers than with scientific; before any significant sale, the relationship between OEM and laser manufacturer requires education, consultation, help in the development of the application, and, often, optimization of the
Expansion in both the geographical and technological worlds will allow Coherent to create the products needed by our OEM customers and increase our market opportunities; local support will allow us to deliver and support these products with the responsiveness required by this market. In this way, we also support Coherent`s vision for its future as we recognize and participate in the changes occurring in the laser industry. n
Coherent/Adlas manufacturing facility in L?beck, Germany, uses robotic workstations in a cleanroom for high-volume production of
diode-pumped solid-state lasers.