Executive summary 16

Context 43

EEL market forecasts 62

• Global market analysis
• Market analysis by application
• EEL price aspects

EEL market trends 91

• Industry overview
• Application overview
• New applications
• Laser adoption economics
• Impact of COVID-19 pandemic

Optical communication 105

• Market trends (drivers, trends, key applications, classification of semiconductor lasers, etc)
• Technology trends (from semiconductor laser to end-systems, typical laser characteristics, trends, competitive
  technologies, etc)

Sensing 138

• Market trends (drivers, trends, key applications, classification of semiconductor lasers, etc)
• Technology trends (from semiconductor laser to end-systems, typical laser characteristics, trends, competitive
  technologies, etc)

Material processing 167

• Market trends (drivers, trends, key applications, classification of semiconductor lasers, etc)
• Technology trends (from semiconductor laser to end-systems, typical laser characteristics, trends, competitive
  technologies, etc)

Medical 208

• Market trends (drivers, trends, key applications, classification of semiconductor lasers, etc)
• Technology trends (from semiconductor laser to end-systems, typical laser characteristics, trends, competitive
  technologies, etc)

Display and lighting 223

• Market trends (drivers, trends, key applications, classification of semiconductor lasers, etc)
• Technology trends (from semiconductor laser to end-systems, typical laser characteristics, trends, competitive
  technologies, etc)

EEL technology 242

• Laser mode of operation
• Typical laser parameters and application requirements
• Emission wavelengths
• Semiconductor laser – attributes and parameters
• EEL as a pump laser
• The different possible designs of EELs
• Principle of operation of laser
• Laser amplifiers
• Semiconductor laser structures
• Challenges

EEL industry 270

• Player mapping
• Players’ positioning on supply chain
• Players’ positioning by market segments
• Focus on ultrashort-pulse laser technology
• Cost evolution of EEL high-power chips
• Recent Mergers & Acquisitions (M&A)
• Consolidations in the photonics industry
• U.S. – China relationship in photonics industry
• Laser industry in regions

THE EEL MARKET WILL STILL BE DRIVEN BY OPTICAL COMMUNICATIONS, WITH EMERGING APPLICATIONS OUTPACING TRADITIONAL MATERIAL PROCESSING

Since the development of lasers in the 1960s, they have been increasingly used in a large number of applications. The unique properties of coherent light have helped replace conventional manufacturing methods and have advanced fiberoptic
communication. This has propelled the laser market to a trillion dollar business since the 1990s. Semiconductor laser-based technology placement in different market segments continues to grow moderately.
Nowadays, material processing and optical communication applications continue to be the main driver of the laser market’s $2.2B revenues in 2020, comprising more than 75%. Laser technologies are also ubiquitous in many emerging applications. These span mostly semiconductor manufacturing, 3D sensing, spectroscopy, medical, display and lighting applications.
The laser technology landscape is highly fragmented, with a wide variety of laser types, including semiconductor lasers, fiber lasers, diodepumped solid-state lasers (DPSSLs), and gas lasers. The right choice of laser technology depends on multiple parameters such as operation wavelength, operation mode, beam quality, output power and efficiency. Studies of light and matter interaction have enabled different types of lasers even in various small applications in which traditional methods dominated.
In this report, we focus on semiconductor lasers, especially Edge Emitting Lasers (EELs). This laser light source has revolutionized the concept of laser systems that lead to new specific attributes including miniaturized devices, stabilized coherent light and narrow emission wavelengths.
In practice, EELs can be used as “direct” lasers but also coupled with optical fibers or crystals to make fiber-lasers or DPSSLs. The advanced laser technologies then provide advantages such as better beam quality, improved stability in terms of laser noise and increased power output.
The EEL market is projected to grow from $2.9B in 2020 to $6.6B by 2026 at a compound annual growth rate for the period (CAGR2020-2026) of 15%. The biggest driver of EELs remains optical communication, which accounts for 60% of total EEL market revenue. Emerging applications such as display, sensing, medical and lighting are likely to grow strongly too, with a CAGR2020-2026 of 15%. Optical sensing, mainly LiDAR, will play an increasingly important role in the evolving automotive landscape. Material processing, which is currently the second largest market for EELs, will remain an attractive business in terms of value but the growth will be limited, particularly due to the US-China trade war and COVID-19 pandemic. We expect CAGR2020-2026 for this application to be only 3%. On the other hand, some traditional applications such as printing and optical storage will continue declining rapidly with digitization and cloud storage trends.

A HIGHLY DIVERSIFIED AND FRAGMENTED LASER INDUSTRY

Each market segment addresses its own value chain due to highly specific demands on laser technology. Such diversified laser technologies, coupled with the wide spectrum of laser applications, create different leaders for each market segment. Hereafter, key semiconductor laser players in the material processing, medical, optical communication, sensing, and display and lighting market segments have been identified:

• Material processing: Trumpf, IPG Photonics, Coherent, Han’s Laser, Raycus
• Medical: Modulight, Coherent, Jenoptik, MKS, Hamamatsu
• Optical communication: II-VI, Lumentum, Broadcom, Neophotonics, Cisco
• Sensing (LiDAR): Lumentum, II-VI, OSRAM, Hamamatsu, Laser Components
• Display and Lighting: OSRAM, Nichia, Sony, Sharp, Kyocera SLD Laser

There is no overall leader in the laser industry.
The vast majority of laser suppliers come from the U.S., Japan, Germany and Canada. Chinese laser suppliers focus on assembly laser machines such as automated cutting/welding tools, optical transceivers, LiDAR and others. However, the Chinese government invests significantly in core laser technologies. As tension between the U.S. and China escalates, China wants to maintain its economic growth by ensuring a secure and controllable technology supply chain as well as building domestic technology sectors to be independent of U.S. parts impacted by tariffs.
Our market research has revealed more than 100 EEL manufacturers. They focus on device manufacturing for one or more application fields. Edge emitter integration into laser systems and subsystems particularly for communication, manufacturing and sensing is becoming a decisive advantage. There will be a big role in the future for laser devices that enable high flexibility and reduce cost in automated logistics or manufacturing. The manufacturing or logistics ecosystem including online connected laser machines or scanners will require connection into the newly built smaller datacenters. The co-existence of laser manufacturing and handling tools, automated guided vehicles using LiDARs and other machine vision based tools that are connected to the internet provides opportunities for photonics companies to strengthen their positions.

1. MORE M&AS ARE EXPECTED IN THE LASER ECOSYSTEM

Laser end-systems can have different forms of vertical integration depending on their application. While devices and modules dominate in fiberoptic communication or sensing applications, large footprint laser systems and tools are usual in material processing applications. Now, end-market laser solutions require new strategies to meet new market demands. A good example is automated systems in warehouses or manufacturing plants connected to datacenters. Suppliers of such ecosystems are today fragmented.
It seems that vertical integration wins over outsourcing for targeting markets requiring highly specific laser tools or modules. Vertical integration results in greater scale. This drives growth, reduces cost and thus expands profit margin. Future acquisitions in laser industry might diversify photonics technologies, businesses and revenue streams and accelerate growth through complementary technology platforms. Therefore, we expect numerous acquisitions in the near future following the recent bidding war for Coherent between II-VI and Lumentum.

3SPTechnologies, Accelink, Adtech Optics, Akela Laser, Allwave Lasers, Alpes Lasers, Applied Optoelectronics, Arima Lasers, Bright Solutions, Broadcom, Brolis Semiconductors, BWT, Cisco, Coherent, DenseLight Semiconductors, Eblana Photonics, Egismos Technology, Emcore, Ferdinand-Braun-Institut (FBH), Fiibercom, FITEL – Furukawa, Focuslight, Hamamatsu, HJ Optronics, II-VI, Infinera, Innolume, InPhenix, Intense Photonics, IPG Photonics, Jenoptik, Kyocera SLD Laser, Laserline, LasersCom, Lasers components, Lasertel, Lumentum, Lumibird, Lumics, Macom, Masimo Semiconductor, Mitsubishi Electric, MKS Instruments, Modulight, nanoplus, Necsel, NeoPhotonics, Nichia, nLIGHT, NKT Photonics, NOLATECH, Norcada, Norlase, Northrop Grumman CEO, OPTOENERGY, Optoway Technology, OSI Laser Diode, Osram, Panasonic Semiconductor, Pegasus Lasersysteme, Photodigm, QD Laser, QPC Lasers, QSI Laser, Raycan, Rohm, Sacher Lasertechnik, Seminex, Sharp, Sheaumann Laser, Sivers Semiconductor,
Sony Semiconductor, Source Photonics, Sumitomo Electric, Thorlabs, Toptica Photonics, Trumpf, UnikLasers, Ushio, Vescent Photonics, Wavespectrum Laser, World Star Tech, and more.