Executive Panel Session gives mixed outlook for 2008: mostly sunny, chance of rain
Feb. 12, 2008, San Jose, CA--Top executives gave a mixed forecast for the photonics industry in 2008 at the January 23 Photonics West Executive Panel Session, "Market Direction and Implications for the World of Photonics."
Feb. 12, 2008, San Jose, CA--Talk show host Larry King once said he could give a high-probability weather forecast for any day, any place: "Partly cloudy, chance of rain." Pretty much any location is likely to have some clouds on any given day, and some chance of rain, whatever that may be. When panelists at the Photonics West 2008 Executive Panel Session offered their industry outlook for 2008, their view was similar in its caution but perhaps more optimistic than that generic forecast--more along the lines of: "Mostly sunny, chance of rain."
Top executives shared their views on the opportunities, challenges, innovations and new applications in the photonics industry in the January 23 panel, "Market Direction and Implications for the World of Photonics." Moderater Stephen J. Eglash, president and CEO of solar energy startup Cyrium Technologies (Ottawa, Ontario, Canada ) began the session with an open-ended question about what panelists are excited about for the year ahead, and to what they attribute their success.
A lively discussion ensued, starting with Holger Schleuter, vice president of industrial-laser/material processing corporation Trumpf (Farmington, CT), who gave an optimistic view of the diode-pumped solid-state laser in light of its tremendous success in the automotive industry. "Growth of the industrial laser market is good, dynamic, and organic. We are worried about the financial crisis that appears to be looming, but we just aren't seeing bad signs of it yet on the books."
Steve Turley, chief commercial officer of Bookham (San Jose, CA) quipped that keeping the company balance sheet sorted out is exciting. "We've come pretty close to going out of business on one or two occasions, but continued investment in R&D has kept us moving ahead, differentiating ourselves from others." Acquisitions have been an important strategy, said Turley, referring to transactions with Marconi, Nortel Networks, Cierra Photonics, New Focus, Onetta, and Avalon Photonics between 2003 and 2006, that rebuilt Bookham into a very different company than it was in 2001.
Stuart Schoenmann, president and CEO of optics and laser company CVI Melles Griot (Albuquerque, NM) agreed that acquisitions have played a part in their company's success. "CVI's two major acquisitions of Melles Griot and Coherent Imaging Optics have kept us very busy." The company sees a bright 2008: "The security market is growing," said Schoenmann, "and it's not going anywhere. There are more and more consumer electronics. So we are very bullish on the future."
Mark Sobey, senior vice president of Specialty Laser Systems, at Coherent (Santa Clara, CA) claimed that diversity in its markets is Coherent's key to success. Starting with advanced packaging and the manufacturing of interconnects, they company makes every part of a device. "There's almost no part of the iPhone we aren't involved in," said Sobey. Staying involved on all sides of a movement keeps a company's focus on wherever the interest is very strong, he added. Coherent's recent acquisition of Novonyx "gets us into direct diodes into the kW space, which opens up several apps," said Sobey.
A more cloudy outlook was forthcoming from some sages in the industry, an understandable position considering global stock-market value drops and the threat of recession in the U.S. New Technology Development Executive Ken Kaufmann of Hamamatsu cautioned they see "storm clouds on the horizon" as customers deal with the deficit reduction act in the U.S. to balance spending on other things, like Iraq. "Budgets are all down about 2%," said Kaufmann. "Congress is giving no increase to any research. The pharmaceutical model right now is broken. Some companies are reducing R&D to look better to shareholders. I see a tough year ahead."
Robert Edmund, CEO of Edmund Optics (Barrington, NJ), concurred. Although precision-molded aspheric optics are a big part of Edmund's growth, the CEO stated an unstable stock market causes caution. "We could be seeing the effect of [the volatile stock market] in the near future. Decisions don't get made in an election year. It's hard to see a robust market coming in '08."
Holger Schleuter responded to my question on this seeming divergence of opinions of what's to come in the near future. As Trumpf is privately owned, "we don't have to report to a board of directors," said Schleuter, meaning he has no incentive to gussy up Trumpf's industry outlook for public positioning. But he maintains their outlook is decidedly rosy. "Maybe the car is going over the cliff, but we aren't anything but bullish. We can't believe the numbers, but that's what they're telling us."
Here comes the sun
On the topic of solar energy, moderator Eglash asked panelists if substantial investment at this time is wise, or if the photovoltaic upsurge is another boom and bust scenario like telecom. The general consensus was that the need and motivation to support continuing advances in solar energy is there, and it is likely to continue its progress.
Panelist Randy Heyler, senior director of strategic marketing for Newport (Irvine, CA), remarked that statistics support a "long and thorough, solid growth pattern" in solar energy. Rebates and research incentives from the Japanese and German governments are driving a level of volume necessary to bring cost to grid parity down. "The energy savings are there and the efficiency of photovoltaic technologies is really improving. The solar industry will be good for the applied materials industry, and thin film technology will continue to develop."
Sobey claimed solar on paper looks as good as any industry, but considering that solar panels are so simple to build, the technology will be driven to very low costs very quickly. With the applications being many and diverse, the promise of solar looks "reasonably attractive on the laser and photonics side."
Edmund was more cautious, "Even on a slow day, there's always a couple of darlings on the dance floor--bio, security, and the new baby, alternative energy. But if the price of oil comes down, it's anybody's guess how solar will fare."
Kaufman softened his cloudy outlook with a paradoxically grim view of the future featuring a silver lining: "Huge problems like global warming, lack of fresh water, an aging population, disease in developing countries--all may have photonic solutions. What's bad for the globe may be, in a way, good for photonics." -- Valerie C. Coffey