Proactive approach critical for UK laser welding equipment market

Feb. 9, 2006
February 9, 1006, London, United Kingdom--At $32.0 million, the size of the United Kingdom laser welding equipment market is small in comparison to the overall European market for laser welding equipment and also to the absolute size of the industrial sector in the country.

February 9, 1006, London, United Kingdom--At $32.0 million, the size of the United Kingdom laser welding equipment market is small in comparison to the overall European market for laser welding equipment and also to the absolute size of the industrial sector in the country. With modest revenues of $50.5 million projected for 2011 - far below the market's actual growth potential - laser welding equipment manufacturers will need to be more proactive to maximise growth prospects, according to a press statement by Frost & Sullivan Research Analyst Titus Hocevar.

"Ultimately, the challenge remains to translate the market's potential into faster growth," Hocevar said. "The key to this lies in raising awareness among production engineers and in making resources available to end users, allowing them to make better-informed decisions."

Currently, the weakness of the UK manufacturing and metals processing sector poses a major hindrance to market expansion. To overcome the traditional reluctance of these sectors to invest in emerging technologies and encourage them to implement new equipment despite budget restrictions and technological uncertainties, laser equipment sellers will need to demonstrate very high returns on investment.

There are, however, signs for optimism. The gradual automation of production processes will spur wider adoption of laser welding technology by both existing as well as emerging end-user industries, due to the advantages such technologies offer in comparison to conventional welding equivalents. Feature improvements are also set to open up new applications for lasers in various production processes.

Consistent growth will be based on a three-pronged platform. First, from existing users increasing their use of laser welding for specific applications and consequently prompting their industry peers to recognise the benefits that laser welding is providing to these early adopters.

Secondly, the identification of new applications for existing technology. Here, research institutes are playing an invaluable role in helping manufacturers and end users discover ways to expand the use of laser welding to other industry sectors.

Thirdly, innovative applications that promise to open up novel applications, particularly in the light manufacturing and high-tech electronics as well as medical fields. While many of these new precision technologies are currently at the developmental stage, they are expected to drive sales growth in the long term.

Accordingly, the more established carbon dioxide (CO2) and Nd:YAG technologies will experience consistent if modest growth, with growth rates decelerating slightly over the medium to long term as prospective applications diminish. In contrast, the emerging technologies group -

fibre, disc and green/diode lasers - will represent the fastest growing sectors, based on their enhanced functionality and potentially lower initial costs than existing laser welding types.

For instance, fibre lasers might displace traditional lasers in the automotive industry, and create new demand by opening up possibilities for welding in new applications such as welding aluminium components in lightweight structures. At the same time, the superiority of fibre laser in terms of beam quality and the disc laser in relative price will boost demand at the expense of current laser welding technologies.

In terms of end-user sectors, the automotive sector will remain the single largest applications group accounting for $14.8 million of the UK laser welding equipment market by 2011. However, its market share will contract over the long term as laser welding applications penetrate into other manufacturing sectors. The most rapid growth will be seen in the combined electronics and medical equipment sector, which by 2011, will account for 27.7 per cent of all laser welding revenues - ultimately overtaking the automotive sector in terms of revenue generation. The fastest-growing sector in terms of market share will be light industrial manufacturing, due to a growing number of applications and an increasing acceptance of the technology.

"As the laser welding equipment market expands, most system integrators will be well-positioned to make gains," said Hocevar. "However, system integrators and laser source manufacturers should work together to develop applications, reduce the cost of developing such applications and promote them more actively."

New applications will ensure a diversification of their customer base with smaller customers having limited in-house welding expertise likely to turn to specialist integrators. Increasingly, the UK laser welding equipment market will benefit from rising demand from UK companies relocating abroad and from companies in emerging, non-European markets. As a result, the demand from abroad will increase - a process that is already taking place.

"It is the best use of resources in the short term, as it enables to expand the market significantly with existing know-how, which is much easier and efficient than spending significant amount of time and money developing new applications," concludes Mr. Hocevar. "In the long term, however, the need for investing in developing new applications is inevitable."

A virtual brochure, intended to provide manufacturers, end users and other industry participants an overview of the latest analysis of the UK Laser Welding Equipment Market, can be obtained by sending an e-mail message to Magdalena Oberland at [email protected] with the following information: your full name, company name, title, telephone number, fax number, e-mail address and source of information.

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