Business Forum: Mastering a changing laser market

Changes in end-user markets are changing laser and photonics markets, and more significant changes are coming as photonics find a foothold in the fast-emerging markets for quantum information systems.

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As I prepared to chair the 31st annual Lasers & Photonics Marketplace Seminar in February 2019, I considered what I should say in my opening remarks. It struck me that “change” was the best theme for the meeting. Of course, it’s a trite observation—everything changes all the time, especially in photonics. But some things seem fundamentally different now and I could see it in the way the Seminar agenda came together.

It started with our keynote talk by Ralf Kimmel, general manager of TRUMPF Laser Technology. Here was a senior executive of one of the largest makers of lasers in the world and he didn’t talk about laser diodes, fiber lasers, or disk lasers. Instead, he talked about solutions and holistic approaches, and IoT and digitization—that was different. And it all reflected a deep commitment by the company to a new vision of industrial manufacturing processes that acknowledges the fact that, in many cases, the laser itself has become something of a commodity.

Next, Allen Nogee, our laser analyst from Laser Markets Research, painted a picture of 2018 laser markets that looked much different from 2017, which had been a banner year for sales of high-power lasers (year-over-year growth of 48.6% in this one segment). Instead, the overall growth rate for all segments in 2018 was closer to a typical rate of about 6% growth, reaching a total revenue of approximately $13.5 billion. Sensors, especially those based on VCSELs, and medical lasers were the star segments in 2018 and look to be the same in 2019. The 2019 Worldwide Market for Lasers report is now available from Strategies Unlimited.

The Chinese laser markets are also clearly changing and having a major impact on global markets since China buys roughly 40% of the world’s lasers. According to Bo Gu from Bos Photonics, more conservative government funding policies and significant trade uncertainties have fostered new caution about investment in China. Still, the overall market for industrial lasers and systems grew a very healthy 20% in 2018.

There were several more talks, interviews, and panels that explored the changes in markets for precision optics, the global mergers and acquisitions scene, and lasers used in flow cytometry. But the final panel of the day turned out to be the one that everyone in the audience stayed to hear long after the scheduled end of the Seminar. It was titled: Scaling quantum information systems—Photonics holds the keys. The full implications of what moderator John Dexheimer called “a land rush of global investments” will unfold over several decades, but it’s becoming clear that photonics components and systems will play a major role (see figure).

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The timeline for quantum-enabled device evolution is shown. (Courtesy of ColdQuanta)

As panelist Tim Day, executive chairman of ColdQuanta, said, quantum computers and other quantum devices have many common photonics-related needs, including highly precise light sources, ultrasensitive detectors, optical interfaces, and photonics packaging. Together with panelists from IonQ, M Squared Lasers, and Vector Atomic, they addressed these needs and the emerging market opportunities. You can read a much more complete description of the full Seminar in our special Summary Report (http://bit.ly/2019summary), and by viewing upcoming video webcasts from the Seminar.

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