INSIGHT - The Growth of Laser JUNE 2021
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G&H INSIGHT Photonics Emerges Stronger from the Pandemic, Proving its Robustness and Resilience Against Market Disruptions AS WE START EXITING THE TUNNEL, IS THIS LIGHT OR THE TRAIN COMING RIGHT AT US?1 28.5% The year 2021 has forced enterprises and indeed entire economies to Growth in some completely re-baseline their expectations of how sectors and markets categories of will perform. Unfortunately, there have been several casualties along industrial the way, especially for those businesses with narrowly targeted offerings in applications affected by the pandemic. 10.4% laser use Overall increase Photonics being a truly cross-cutting, enabling technology is stubbornly in industrial bucking this trend and shows strong growth across many different market laser market $18.2 billion sectors. From micro-machining and materials processing for semiconductors, to applications including industrial and telecom, aerospace and defense, and life Value of global industrial sciences, a recent study2 predicts that by the end of the year we will witness: laser market • Growth of over 28.5% in some categories of industrial laser use “ • Overall industrial laser market increase of 10.4% • A global industrial laser market worth $18.2 billion (£13.2 billion) These are positive signs that create optimism and hope for businesses across To be at the vanguard of industrial the complete value chain – from component manufacturers and value-add OEM laser use, laser component vendors, to Tier-1s relying on photonics to manufacture the end-products their manufacturers need to be at customers buy – from smartphones to wind turbines. the forefront of industrial laser design. With strong growth in high-volume industrial lasers, increased ubiquity is expected to lead to more demanding expectations of cost versus performance in industrial laser systems for commoditized products in this specific market sub-sector. On the other hand, innovative photonic products are expected to In this article we explore the continue to dominate in the semiconductor processing market, as well as in life demand for photonics-based sciences and aerospace and defense, driven by high-performance, field reliability, solutions across sectors, qualification standards and product differentiation. applications and pain-points, In short, to be at the vanguard of industrial laser use, laser component and set out industry needs for manufacturers need to be at the forefront of industrial laser design. Anything photonic components to address else is going to put them – and, ultimately, the businesses they serve – behind the challenges customers face the curve. today. Page 3
G&H INSIGHT WHAT’S DRIVING LASER MARKETS? UNRAVELLING THE UPLIFT Rather ironically, the pandemic Global internet traffic continues itself has been responsible for a to increase, driven also by remote significant uptick in certain areas of working and the impact of Covid-19. the laser component market, both Globally, the total number of Internet in 2020 and 2021. users is projected to grow from 3.9 billion in 2018 to 5.3 billion by 2023 at Arguably, this is unsurprising in the a CAGR of 6%, and as of January 2021 communications sector, given the stood at 4.66 billion4. exponential increase in the use of online conferencing tools and the To intercept this global traffic electronic devices that facilitate them. increase, all the ‘background’ enabling technologies need to step-up and It is equally unsurprising that China deliver. Amongst others, these leads the world in this respect, include a new generation of faster via the famed ‘3C’ triumvirate microchips, higher-speed printed (‘computer, communication, consumer Beyond the industrial market, circuit boards, new compound electronics’), particularly when one photonics is currently also semiconductors and more advanced considers that the country's ultrafast underpinning the aerospace and and high-throughput manufacturing laser market alone grew at a CAGR of defense sector, outperforming the techniques. Innovations in photonics 70.5% from 2015-2019, compared to sector average. The technology’s technology have been the primary a global CAGR of 11% over the same potential for faster, miniaturized, enabler in all these advancements period3. power-efficient and EMI-free systems in the microelectronics industry; is attracting significant attention And the stability of several other from lasers used in wafer fabrication for generating photonics-enabled sectors is in itself, revealing. Demand and inspection, to laser-based mission-critical functionality. From in these sectors has increased or manufacturing equipment. advanced multi-band imaging remained roughly the same against The continuous advancement of systems in aerospace platforms, to the backdrop of an extreme economic equipment and more precise and ground-based sighting systems using downturn – indicating that the market high-throughput lasers can only be augmented reality (AR) is going to be a for industrial laser components in maintained if the components used to game-changer in the defense sector. these applications is, by its very build these systems continue to meet nature, highly resilient. From advanced multi-band imaging the specific and rapidly evolving needs Growth in the telecom sector for of those applications; and because systems in aerospace platforms, to photonics is driven from ‘both sides’; photonics has the potential to deliver sighting systems on the ground, using on the one hand, core and subsea quicker, cheaper, and ‘better than’ augmented reality AR is going to be a networks are racing for more capacity, alternatives, all eyes are on it – so game-changer in the defense sector. and on the other hand, the increased the competition to meet those needs bandwidth at the network edge is skyrockets. Although certain biophotonic sub- pushing adoption of photonics further markets have suffered through the out, including interconnection of the Because photonics has the potential pandemic, the sector was resilient mast to the base of 5G antennas and to deliver quicker, cheaper, and ‘better and most importantly, the outlook within massive data centers. than’ alternatives, all eyes are on it. for photonics-enabled life sciences is ‘brighter’ than ever. Our ageing population, the ever-increasing shift of healthcare funding from therapy to early diagnosis, coupled with the advancements of high-resolution and multi-modal imaging systems will continue to challenge and push for new biophotonic components and systems. What, then, are these applications, what are their needs, and what does it take for one component to underpin a laser that outperforms another? Page 4
G&H INSIGHT TARGETING THE APPLICATION PAIN-POINTS – WITH LASER PRECISION Over the 70 years we have been active in optics and photonics, we have seen markets rise and fall and application requirements and customer pain-points evolve rapidly. In the section below, we describe the applications, current challenges and try to define the required technology advances to support the industries under consideration. INDUSTRIAL AND TELECOM Current and future challenges In industrial applications, higher Application description: power lasers need high-quality and Photonic applications in the low-loss components, whereas higher industrial sector are primarily throughput and more precise lasers focusing on laser-based require faster and more efficient microelectronic manufacturing photonic modules. and semiconductor fabrication and In telecom, higher speeds, power metrology. Typical applications efficiency and capacity scaling are include photolithography, going to drive next-generation system metrology, laser-based equipment architectures, supporting convergence for flexible and high-density from wireless and space-based interconnects (HDIs), printed networks. circuit boards (PCBs), via drilling, integrated circuit (IC) packaging Outperform indicators Token critical technologies applications and display Industrial • Low-loss and high-damage manufacturing and processing. • Ultrafast (femto- and pico-second threshold optical components capability) • Miniaturized photonic components In the telecom sector, fiber-optic • Power-efficient and high-speed • High-throughput equipment passive and active components lasers and modules • Higher precision and repeatability are used to generate, modulate, • Faster optical switches and amplify and guide light in fiber- Telecom deflectors optic links for diverse applications. • Power efficient systems to enable These links can be a few meters higher capacity long (e.g. interconnecting 5G • Higher speed networks Associated keywords: Precision optics • Converged networks merging (PO); fiber optics (FO); acousto-optics antennas or data centers) to a (AO); microelectronics, semiconductor few thousand kilometers long wireless and wired communication wafer fabrication and processing, (e.g. subsea network bridging two infrastructure industrial lasers, UV lasers, PCB via continents). drilling, smartphone display processing Page 6
G&H INSIGHT AEROSPACE AND DEFENSE We also expect these systems to start Application description: penetrating into adjacent established Aerospace and defense sectors markets like security and counter- rely on lasers for mission-critical, terrorism to more futuristic developing inertial navigation systems, markets such as planetary mining. including ring laser gyroscopes for airborne and maritime navigation, Quick to deploy and munitionless, they and guidance systems for missile fire a noiseless, invisible, variable- and UAV (drone) guidance. intensity beam almost perfectly flat over long distances. The technology is Photonics is also key for currently in the demonstration phase sensing and imaging in harsh and current challenges including environments as part of airborne, operational stability in diverse and spaceborne or ground military harsh environments as well as size, assets. Associated keywords: diode weight, power and cost (SWAP) lasers, fiber optic gyroscopes, lidar, are being engineered by several hyperspectral imaging, sighting systems, development teams around the world. Current and future challenges radiation-hard precision optics, atomic clocks, laser cooling, gravimeters, high- In these applications, many of the Outperform indicators energy lasers (HEL), solid state lasers challenges seen in industrial and • Low-size, low-weight, low-power (SSL), fiber lasers, optimal beam point, telecom also apply, but with the laser solutions missile defense, drone defense added critical dimension that defense • Ruggedized designs to withstand “ applications operate in typically harsh high shock and high vibration environments that can drastically • Stability throughout wide impact component reliability. temperature ranges Robust sensors and imaging • Multi-band sensing and systems, combined with Modern warfare is increasingly reliant communication systems communication in RF-denied on deep-tech in order to provide the • Military grade qualification levels and navigation in GPS-denied reconnaissance edge and operational • Highly sensitive sensors environments, are going to be key superiority when active engagement is required on the battlefield. challenges where photonics can Token critical technologies • New power-efficient laser diode offer unique solutions. Robust sensors and imaging systems, combined with communication in RF- modules denied and navigation in GPS-denied • Functional hermetic modules environments, are going to be key merging electronics and photonics challenges where photonics can offer • Lightweight multi-band systems for unique solutions. reconnaissance and remote sensing • Advanced sighting systems for Although lasers are progressively increasing situational awareness in becoming the solution of choice the battlefield for navigation, rangefinding, and target designation, we see photonics continuing to penetrate the market, enabling new applications, such as directed energy weapons (DEW). Pivoting on the advancements in high- power laser technology within the industrial sector, high-energy lasers are gaining traction, primarily due to the high efficiency, monolithic nature and power scalability of photonics and fiber optics. We expect to see directed energy weapons fully operational in combat systems and vehicles globally in the next five years. Page 7
G&H INSIGHT LIFE SCIENCES AND MEDICAL Arguably, this requirement has also been fueled by the recent Covid Application description: pandemic, and the accompanying Biophotonics, as the name realization that rapid diagnostics suggests, is the cross-section can be vital for the effective and between life science and immediate containment of virulent photonics, fusing the Greek infections, and not just for the early words Bio (meaning life) and phos detection and treatment of underlying (meaning light). health issues. Biophotonics is essentially Outperform indicators “ split into two main categories; • Higher-accuracy, higher-resolution medical diagnostics and medical diagnostics therapeutics and both revolve • Combination of imaging and In the short term, we expect around the traditional pillars therapeutics in surgery biophotonics and specifically of medicine (predict, monitor, • Functional imaging combining aesthetic laser components diagnose and treat). different technologies and systems to outperform the • Minimally-invasive or non-invasive sector average, propelled by a in-vivo diagnostics post-pandemic surge in cosmetic Current and future challenges • Cohesion of supply – one source for The advances in biophotonics and minimally invasive surgeries all necessary optics, modules and worldwide. continue to optimize, streamline, and subassemblies automate treatment devices, making them more accessible, efficient, and Token critical technologies as non-invasive as possible. These • Ultra-wide bandwidth components advances can be seen in laser surgery, • Biocompatible micro- and nano- fluorescence microscopy which has photonic integrated components revolutionized our understanding of • Laser active and passive kidney physiology for example, and components in new wavelengths medical imaging generally. The global • Precision optical components for medical imaging market size was AR/VR in medical diagnostics and $33.69 billion in 2019 and is projected surgery to reach $43.33 billion by 2027, In the short term, we expect exhibiting a CAGR of 5.1% during the biophotonics and specifically aesthetic forecast period 5. laser components and systems to In many senses, the burgeoning outperform the sector average, opportunities for laser technology propelled by a post-pandemic surge in this sector are also its greatest in cosmetic and minimally invasive challenges. surgeries worldwide. Driven not only by demographics (an Longer-term, we expect a ‘collision’ increasingly ageing population) and of photonics with other disciplines changes in funding emphasis (from (robotics, artificial intelligence, treatment to early detection), laser augmented reality), driven by ever technology in this sector is also coming more accurate, reliable, stable, and under pressure from the demand and integrated laser components and expectation that real-time, lab-quality systems. diagnostics and detection should now be achievable within minutes rather Associated keywords: Pockels cells, super-resolution microscopy, functional than hours – the so-called ‘point of imaging, fluorescence microscopy, care’ or ‘with-patient’ orthodoxy. optogenetics, medical quantum sensing, fiber-optics Page 8
G&H INSIGHT SPACE COMMUNICATIONS AND Outperform indicators REMOTE SENSING • Optimum SWaP-C (size, weight, power and cost) • Ruggedized designs to withstand Application description: high levels of shock and vibration High-speed connectivity between due to launch satellites and from satellites • Survival and operation throughout to ground using lasers has wide temperature ranges been identified as a promising • Performance under radiation technology solution for creating throughout its operational lifetime high-speed, low-latency and • Cost-effective bootstrapping best future-proof networks in the sky. practice from adjacent markets Moreover, relaying data from low- Some critical technologies earth orbit (LEO) to geostationary • High-performance lasers coupled satellites using high-speed with photodetectors and passive laser communications can offer fiber optics high-capacity and near real-time • Laser electronics and digital control downloading of data from remote systems including u-ICs and FPGAs sensing satellites. • Optical pre-amplifiers; booster and high-power amplifiers Current and future challenges • Rad-hard space transceivers New communication architectures • Highly stable laser sources and using space photonic components and atomic clocks for navigation modules must deliver the required performance and reliability in the required operational scenario and corresponding environment. The Earth’s orbit is an inhospitable environment for electronics and photonics. Satellites orbiting our planet usually do so within or close to the inner and outer Van Allen belt that traps transit galactic and solar cosmic radiation. Moreover, these systems must be able to meet the stringent cost targets in order to allow for mass manufacturing of space hardware using realistic funding levels. Transitioning from traditional high- cost bespoke systems to higher volume, high-reliability systems in a cost-effective way is by far the biggest challenge faced. Associated keywords: Space photonics, satellite communication, navigation, lidar, quantum-based sensors, atomic clocks Transitioning from traditional high- cost bespoke systems to higher volume, high-reliability systems in a cost-effective way is by far the biggest challenge faced. Page 9
G&H INSIGHT CONCLUSIONS The pandemic has tested the agility and robustness of the photonics industry. The technology’s fragmented nature that is usually seen as a disadvantage, this time has worked in its favor and enabled even deeper penetration into a plethora of emerging growth areas. The laser market in 2021 is performing strongly with the electronics industry expected to drive the market's growth over the short term. It would seem, therefore, that 2021 is indeed destined, in many sectors and across many applications, to see photonics and laser push the boundaries and demonstrate their resilience in what has undeniably been an unprecedented climate. 2021 is destined, in many sectors and across many applications, to see photonics and laser push the boundaries and demonstrate their resilience. … But as the market grows, the competition inevitably increases; and in that crowded environment, the product differentiators and business capability to constantly innovate become more important than ever. G&H Insight looks at what’s happening, why and how it affects your business in the world of photonics. Written by specialists at G&H, it aims to share information learned from 70 years’ listening to our customers, involving them in our product development, and sharing our insight- Stratos Kehayas Adrian Meldrum led approach. Chief Technology Officer Chief Commercial Officer gandh.com info@gandh.com G&H Photonics G&H Photonics GandHPhotonics REFERENCES IMAGE CREDITS 1 APM 2020 Page 7 top right: Courtesy of the US Navy 2 Worldwide Laser Market Review & Forecast 2021 Page 7 middle right: © Crown copyright 2011 3 https://www.cioe.cn Page 8 bottom right: Courtesy of Michelson Diagnostics Page 9 top right: © Japan Aerospace Exploration Agency (JAXA) 4 www.cisco.com and www.statista.com 5 www.fortunebusinessinsights.com The appearance of U.S. Department of Defense (DoD) visual information does not imply or constitute DoD endorsement. Page 10
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