The early stages of a rapidly-growing market – An interview with II-VI

Since the iPhone X’s release in 2017, an increasing number of smartphones are using VCSELs for 3D sensing applications. Front 3D imaging was a first step, and now smartphone manufacturers are releasing new products with a rear 3D sensing module for enhancing portrait pictures via the bokeh effect. The development of the rear 3D sensing module, used today for computational photography, should not stop here and instead could be used for near-future augmented reality applications.

In its latest report, VCSELs 2019 – Market and Technology Trends, Yole Développement (Yole) offers a comprehensive analysis of VCSEL’s main applications, including an in-depth analysis of the consumer and automotive landscapes. Our report also presents VCSELs’ main specifications, along with a detailed analysis of the VCSEL manufacturing process together with a cost comparison split by VCSEL type.

Pierrick Boulay, Technology & Market Analyst, Solid-state Lighting at Yole Développement discussed with Mark Lourie, Vice President, Corporate Communications & Brand Development at II-VI Incorporated.

Pierrick Boulay (PB): Can you please introduce yourself, your responsibilities, and II-VI’s activities?

Courtesy of II-VI

Mark Lourie (ML): My name is Mark Lourie. I’m Vice President, Corporate Communications & Brand Development at II-VI Incorporated. II-VI is a market leader in engineered materials and optoelectronic devices. We serve three core end markets: optical communications, materials processing, and aerospace and defense. We also leverage our technology platforms to serve growing markets, including in the automotive and consumer electronics end markets.

PB:  How have VCSELs evolved over the last decade, and what can we expect in the next 10 years in terms of applications, technology, price, performance, and manufacturing?

ML: VCSELs were first experimentally demonstrated in the lab about 30 years ago. The first commercial devices became available around 1996. VCSELs were initially developed for datacom applications, and by 2010 they were leveraged for industrial sensing, laser printing, and the optical mouse. This decade has seen the proliferation of VCSELs into a number of additional use cases, such as camera autofocus and proximity sensing. Other applications, perhaps not as well known, include thumb menu navigation on several Blackberry smartphones and on the steering wheels of several Mercedes-Benz cars. II-VI’s VCSELs have been serving the consumer electronics and automotive markets for quite some time.

PB: Can you describe your vision regarding the emergence/boom of 3D sensing applications and their impact on the VCSEL industry/technology?

ML: Until the advent of 3D sensing, manufacturing on 4-inch wafers was sufficient. Because of their vertical structure relative to the plane of the wafer, VCSELs enabled 4- to 12-element one-dimensional arrays that transmit data in parallel through optical ribbon-fibers. 3D sensing was the first application to drive the demand for relatively large 2-dimensional VCSEL arrays. A typical design for 3D sensing requires on the order of a hundred VCSELs per chip in order to scale up the optical power required, for example, for facial biometrics applications. Therefore, 3D sensing applications drove an entirely new manufacturing infrastructure to enable 6-inch wafer processing. As such, it is not adequate to describe the market growth in terms of wafer volumes or shipment of chips. Instead, we talk about manufacturing volumes in terms of wafer area shipped, and that has increased by several orders of magnitude over the last 10 years, requiring a quantum leap in manufacturing technology.

PB: What are the main challenges related to the VCSEL manufacturing process, and how can they be overcome?

ML: It’s important to remember that all VCSEL suppliers tend to leverage internally developed proprietary processes. As such, the challenges are likely different for each manufacturer. Each breakthrough enhances a company’s intellectual property, which raises the barrier to entry. II-VI has been in volume production of VCSEL arrays for 3D sensing for almost two years. Most of the challenges were overcome before that and some as we ramped up manufacturing. II-VI is building on that knowledge to achieve more efficient designs for new opportunities in the consumer electronics market.

PB: The VCSEL wafer manufacturing process recently moved from 4″ to 6″, and some players are already investigating 8″. Do you think this is possible? What would the challenges be, and what would drive such a transition?

ML: The manufacturing technology needs to be matched to the size and financial requirements of the respective target market. The transition to 6-inch was necessary, because die size could not be economically manufactured in the required volumes with the existing 4-inch laser diode manufacturing infrastructure anywhere in the world. Therefore, the industry needed to establish a 6-inch VCSEL manufacturing infrastructure to address the 3D sensing market for consumer electronics applications.
Today there are only very few vertically integrated 6-inch VCSEL manufacturers with a proven track record in high-volume manufacturing of high-reliability, large multi-emitter VCSEL dies designed for 3D sensing. The number of suppliers may increase as the demand continues to grow. However, newcomers will face a steep learning curve and will be competing with established suppliers. It is not likely that the 3D sensing market alone will be large enough to economically justify a transition to 8-inch manufacturing. Such a development would require several markets, each with the potential size of 3D sensing, to justify that investment, and these markets are not yet on the horizon.

PB: 3D sensing is today the main application for VCSELs in smartphones, but implementation is also expected in industrial and automotive applications. When will these applications generate significant volume? What is the main difference compared to VCSELs in smartphones?

ML: As I mentioned, VCSELs have already found applications in the automotive market, on steering wheels. VCSELs will compete with edge-emitting laser diodes and other technologies for a broad range of automotive applications, including in-cabin and exterior scanning applications. Typically, each new use case requires a design specifically tailored to the requirements. Taken together, we don’t believe that the demand for these automotive applications will rise to the kind of volumes expected in consumer applications, and the design-in cycle can take much longer. Still, these automotive applications will benefit from the economies of scale that 6-inch manufacturing platforms have enabled for VCSELs in consumer electronics.

PB: What do you expect from VCSEL implementation over the next five years?

ML: In terms of applications, the trends are already clear: There are an increasing number of announcements of consumer devices with embedded VCSELs, including multiple smartphones and augmented reality headsets announced just this year. We are in the early stages of a rapidly growing market.


Interviewee

Mark_Lourie_II-VI_circle

Mark Lourie has more than 25 years of experience in the photonics industry and is Vice President, Corporate Communications & Brand Development, at II-VI Incorporated. Mr. Lourie has been with II-VI since the Company’s acquisition of Aegis Lightwave in 2011. Mr. Lourie joined Aegis Lightwave in 2001, initially in a product line management role, eventually becoming Vice President of Sales, Marketing & Product Management. Mr. Lourie joined Aegis Lightwave from Lucent Technologies (now Nokia), where he led market development activities for optical networking products in the service provider market. Prior to Lucent, he held product marketing roles at Corning and before that at EPITAXX (now Lumentum). Mr. Lourie holds an A.E. degree in Electronic Engineering Technology and a B.S. degree in Engineering Physics from Wentworth Institute of Technology. Mr. Lourie also holds an MSEE degree, with a concentration in Lasers and Optics, from the University of Southern California.


Interviewer

Pierrick Boulay - Yole Développement

As part of the Photonics, Sensing & Display division at Yole Développement (Yole), Pierrick Boulay works as Market and Technology Analyst in the fields of Solid State Lighting and Lighting Systems to carry out technical, economic and marketing analysis. Pierrick has authored several reports and custom analysis dedicated to topics such as general lighting, automotive lighting, LiDAR, IR LEDs, UV LEDs and VCSELs.
Prior to Yole, Pierrick has worked in several companies where he developed his knowledge on general lighting and on automotive lighting. In the past, he has mostly worked in R&D department for LED lighting applications. Pierrick holds a master degree in Electronics (ESEO – Angers, France).


Related report

VCSELs-2019_May2019

VCSELs – Market and Technology Trends 2019
New functionalities in smartphone and automotive are boosting the VCSEL market.

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