Laser Focus World recently released their annual report on the laser market, and there are some major industry trends that are expected to impact thin film deposition requirements. Manufacturers who focus on precision and performance for their thin film coatings will be best positioned to take advantage of expected growth.
Laser Market Outlook
According to Laser Focus World’s report, 2019 was a difficult year in a lot of industries because of ongoing global trade and political tensions. However, they expect to see a 10% revenue growth rate in the laser market this year after flat revenue trends in 2019, which is an encouraging sign.
There has also been a continued uptick in interest and investment in laser applications. Attendance was up at the 2019 Laser Munich show, rising to 33,999 from 32,700 in 2017.
Here’s a look at how some of the biggest drivers of the laser market are expected to perform in 2020.
The telecom and datacom markets took a sizable hit in 2019 due to tariffs, but as 5G deployment continues to ramp up, this market should see some growth in 2020. There are still some uncertainties around deployment that need to be noted, however. The Federal Communications Commission is blocking federal subsidies for equipment from Huawei and ZTE, two of the biggest players in this technology, because of perceived security threats.
In the U.S., stakeholders at the local and federal levels are also looking to expand fiber-to-the-home and other FTTx systems, which should undoubtedly increase spending in this area. We’re also starting to see development into satellite Internet services; SpaceX launched two separate satellite groups in 2019 to explore delivering broadband service to areas of the world that are not connected to the global fiber communications network.
SpaceX may be the most ambitious to this point, but plenty of other companies, according to Laser Focus World’s report, are exploring the same technology. Current iterations of satellite Internet services work by using laser transmitters as links between satellites to transmit and receive data. As more companies dive into this untapped market, it should create higher demand for those lasers.
Instrumentation & Sensors
This market in general is relatively small in the laser realm, but Laser Focus World points out that it has a high potential for growth particularly in consumer electronics. Some of the applications in this market that are becoming increasingly relevant are 3D sensing, LiDAR, spectroscopy and flow cytometry, which is a measurement technique used in biomedical research and diagnostics.
Both VCSELs and edge-emitting lasers (EELs) are used in 3D sensing applications, though VCSELs offer more reliable performance. They’re becoming more and more common in many consumer devices, such as smartphones, to enable features such as facial recognition, tape measure apps and retail apps, which now allow you to see how a product will look in your home, such as a coffee table, before purchasing.
Powerful but low-cost lasers are making portable security devices readily available for airports and law enforcement officials. Such devices are being used for rapid safety screening, narcotics detection and product authenticity detection in spaces where it isn’t logical or possible to operate larger equipment. Lasers in these devices are of a smaller form factor and require the utmost precision to ensure performance.
Laser Focus World is anticipating that military laser revenue should stay high in 2020, and this is mostly being driven by directed-energy laser weapons, which are being used to counter-target drones and other small UAVs. These types of systems are expensive to develop, but using laser light instead of physical projectiles is much cheaper to operate in the long run.
IR optics, which are typically used in thermal imaging applications, are another area where we should see continued demand in the defense sector. IR optics are commonly used in missile guidance systems for long-range imaging, night vision gear and remote target acquisition.
Fiber lasers from Chinese companies are growing in power, meaning that there is now a wider availability of high-power lasers in the 2-6 kW range, which has decimated prices. So while there are sure to be gains in the materials processing industry this year, revenue growth and profit margins won’t be as strong due to this competition.
Deployments of extreme ultraviolet systems are also going to see continued ramping as demand continues to grow for lithography and nano-processing applications, particularly for semiconductors. As feature sizes continue to shrink, precise, repeatable thin film coatings are only going to become more critical for these applications.