The fall Laser Focus World survey is done and the estimate for the laser market in 2010 comes out to...(drum roll please)...$6.4 billion. That's a 27% gain over our revised value for 2009, recovering almost to the value in 2008 and not far from the peak in 2007. The strongest gains were in materials processing and communications.
A more complete picture will be presented, along with other market perspectives, at the annual Laser Focus World Marketplace Seminar in San Francisco, the same week as Photonics West.
Nearly every sector saw gains over 2009. But how could they not, considering the first half of 2009 was the worst period of the recession.
Nonetheless, the gains exceeded expectations, especially in the sectors related to electronics manufacturing: semiconductor fab tools, solar cell fab tools, flat panel fab tools, and electronics assembly tools. Let's hear it for smart phones and HDTV! China was also a big factor, buying tools at a time when other regions were more cautious.
And then there is the jobless recovery. Many manufacturers have cash and even credit, but remain wary about the future. Some chose to invest in capital equipment instead of hiring workers. The capital equipment improves the productivity, so it helps in their labor costs too.
It's worth a mention in this blog that historical values were significantly revised in two key sectors: excimer lasers for lithography and diode lasers for optical storage drives. These sectors are not relevant to most followers of the laser market numbers, but restating them does change the overall totals.
For more information, come to the seminar, or buy the complete forecast and segmentation in our market report.
Monday, December 6, 2010
Friday, November 5, 2010
Microsoft Kinect is a win for lasers and imaging
Bravo to Microsoft this week for launching a new market segment for lasers! The company finally launched the Kinect, a laser-based accessory that allows Xbox360 players to use their body as a remote control--gesture recognition. The lasers illuminate a field and an imaging system interprets it for the game console.
The reviews so far indicate that Microsoft is on to something here. It is a step up from the Nintendo Wii remote controller and way beyond the Sony PlayStation Eye, neither of which used laser projection to create the image. The main complaints so far seem to be that the Kinect is understandably a little clunky yet, and it doesn't work well in crowded spaces, like dorm rooms.
The system needs single-mode lasers to get a strong enough return signal to do the processing. But, they have to operate in the near-infrared to be invisible and at low enough average power to be eye safe. Kinect uses a structured light technique, which is to say that it interprets the distortion in an image created by the object. When the object moves, the field is distored accordingly.
The project was born as Project Natal, from two Israeli companies, Prime Sense and 3DV Systems. Microsoft bought 3DV in 2009, and this week it bought Canesta. Canesta is known for its laser-based 3D imaging system based on the time-of-flight technique. It works much like radar to recreate a 3D form. Years ago Canesta used the technique to read finger strokes on a virtual keyboard. It worked, and although I prefer an actual keyboard for touch typing, it may be useful as an alternative to touchscreens. The product is sold through a joint venture called Celluon, created in 2004.
The Kinect technique is less expensive than the Canesta approach. Maybe Microsoft has other plans for Canesta. Or it wants Canesta's expertise in imaging. Or maybe it wants to keep it away from competitors.
Any way you look at it this is all good news for lasers and imaging engineers. It's the beginning of a new market segment.
The reviews so far indicate that Microsoft is on to something here. It is a step up from the Nintendo Wii remote controller and way beyond the Sony PlayStation Eye, neither of which used laser projection to create the image. The main complaints so far seem to be that the Kinect is understandably a little clunky yet, and it doesn't work well in crowded spaces, like dorm rooms.
The system needs single-mode lasers to get a strong enough return signal to do the processing. But, they have to operate in the near-infrared to be invisible and at low enough average power to be eye safe. Kinect uses a structured light technique, which is to say that it interprets the distortion in an image created by the object. When the object moves, the field is distored accordingly.
The project was born as Project Natal, from two Israeli companies, Prime Sense and 3DV Systems. Microsoft bought 3DV in 2009, and this week it bought Canesta. Canesta is known for its laser-based 3D imaging system based on the time-of-flight technique. It works much like radar to recreate a 3D form. Years ago Canesta used the technique to read finger strokes on a virtual keyboard. It worked, and although I prefer an actual keyboard for touch typing, it may be useful as an alternative to touchscreens. The product is sold through a joint venture called Celluon, created in 2004.
The Kinect technique is less expensive than the Canesta approach. Maybe Microsoft has other plans for Canesta. Or it wants Canesta's expertise in imaging. Or maybe it wants to keep it away from competitors.
Any way you look at it this is all good news for lasers and imaging engineers. It's the beginning of a new market segment.
Friday, October 15, 2010
How the jobless recovery helps lasers
Several laser segments have recovered surprisingly well in this recession. This is after my warnings over the last two years that capital equipment markets take it especially hard in a recession. So what gives? Who needs new capital equipment when factories are running at lower capacity?
Enter the jobless recovery. Plant managers are talking about buying more efficient tools that operate more efficiently. In good times, this means buying a new tool to do more with the same staff. In recessions, this means buying a new tool to do more with less. Lasers play a role because they are used in big machine tools like sheet metal cutters.
Companies have cash. They are using it to buy back stock, buy capital equipment, and increase their reserves. What they're not doing is hiring workers.
There's a lot more to it than just the jobless recovery. There's the turnaround of the electronics industry after a two year slide. There's China. There are segments that are less sensitive to recessions. And so on.
But the jobless recovery explains why so much of the laser market is recovering as well as it is.
Enter the jobless recovery. Plant managers are talking about buying more efficient tools that operate more efficiently. In good times, this means buying a new tool to do more with the same staff. In recessions, this means buying a new tool to do more with less. Lasers play a role because they are used in big machine tools like sheet metal cutters.
Companies have cash. They are using it to buy back stock, buy capital equipment, and increase their reserves. What they're not doing is hiring workers.
There's a lot more to it than just the jobless recovery. There's the turnaround of the electronics industry after a two year slide. There's China. There are segments that are less sensitive to recessions. And so on.
But the jobless recovery explains why so much of the laser market is recovering as well as it is.
Thursday, September 9, 2010
Our new report: the time for mid-IR lasers has finally come
The time for mid-infrared lasers has finally come. Never mind that CO2 and certain mid-IR solid-state lasers have been around for years. But change is coming, with new solutions, new applications, and new companies.
We finally completed our masterwork on the subject, our market report on mid-IR lasers. We found that the new applications should grow 30% per year in coming years. What's exciting is that some new military applications are helping to develop new technologies while other applications in sensing can get some traction. And, there are new solutions in quantum cascade and interband cascade lasers, GaSb diode lasers and OPSLs, fiber lasers, solid-state lasers, and compact OPOs. Not to mention help from other innovations, like QEPAs, uncooled focal plane arrays, and hollow-core optical fibers.
Altogether, we counted over 50 companies selling lasers or OPOs and OPAs in the mid-IR range. Over half are headquartered in North America.
Of course it's not easy. Some applications are very challenging, and unraveling the technologies and the applications is messy. Not to brag, but we did a nice job in the report to unravel it all for you.
There's more going on with mid-IR market information. We worked with Robert Thornton of Ubiquilight in his survey of mid-IR laser needs. Please do the survey.
And, there will be a panel discussing the mid-IR market at the Laser Focus World Marketplace Seminar in January. To make it a little more direct, we're calling it "Quantum Cascade Lasers for Mid-IR Applications: Pro vs. Con." We will have Tim Day (Daylight Solutions), Robert Afzal (Lockheed Martin), Ken Kaufmann (Hamamatsu Photonics), Lars Hildebrandt (nanoplus), and me. The agenda will up shortly, if it isn't already. We hope to see you there.
We finally completed our masterwork on the subject, our market report on mid-IR lasers. We found that the new applications should grow 30% per year in coming years. What's exciting is that some new military applications are helping to develop new technologies while other applications in sensing can get some traction. And, there are new solutions in quantum cascade and interband cascade lasers, GaSb diode lasers and OPSLs, fiber lasers, solid-state lasers, and compact OPOs. Not to mention help from other innovations, like QEPAs, uncooled focal plane arrays, and hollow-core optical fibers.
Altogether, we counted over 50 companies selling lasers or OPOs and OPAs in the mid-IR range. Over half are headquartered in North America.
Of course it's not easy. Some applications are very challenging, and unraveling the technologies and the applications is messy. Not to brag, but we did a nice job in the report to unravel it all for you.
There's more going on with mid-IR market information. We worked with Robert Thornton of Ubiquilight in his survey of mid-IR laser needs. Please do the survey.
And, there will be a panel discussing the mid-IR market at the Laser Focus World Marketplace Seminar in January. To make it a little more direct, we're calling it "Quantum Cascade Lasers for Mid-IR Applications: Pro vs. Con." We will have Tim Day (Daylight Solutions), Robert Afzal (Lockheed Martin), Ken Kaufmann (Hamamatsu Photonics), Lars Hildebrandt (nanoplus), and me. The agenda will up shortly, if it isn't already. We hope to see you there.
Friday, July 16, 2010
What went wrong with GSI?
What’s going to happen to GSI? GSI announced in May that it would emerge from restructuring this summer. We got some interest this summer from investors checking out the laser market. One can imagine that some pieces of GSI will get traded. There will be news soon enough. As one of my smarter bosses used to say, “it will all become obvious” in due time.
The other question is, what went wrong? First, it got slammed in the downturn in the semiconductor and manufacturing sectors. Semiconductors turned down in 2007 and didn’t stop until last year. GSI is heavy into the semiconductor tool business, and it got hit hard. Equipment sales dropped as much as 90% or more from the peak. The rest of manufacturing turned down in 2008 with the recession. That business was hit with a 50% drop in equipment sales, plus or minus. That's brutal.
Second, GSI is really well positioned in lamp-pumped solid-state lasers, and it has a wide range of other laser and system products in many nice niches. But lamp-pumped lasers have been in a decline for several years while fiber lasers are on the rise. Lamp-pumped lasers won’t disappear, but it’s just not the place to be these days.
Finally, we’ve heard comments about certain decisions made by management along the way, particularly regarding the whole restatement thing. The gist of these comments is that the process was badly mishandled. It certainly made a bad situation worse, and it’s relevant enough. But, you expect Wall Street types to point that out first. They look at financial statements for a living.
To me, I take the macro, long-view perspective. The downturn came at great cost to companies and to the people who work in them. Some got caught out in the storm. Let’s hope that things work out for the best from here.
The other question is, what went wrong? First, it got slammed in the downturn in the semiconductor and manufacturing sectors. Semiconductors turned down in 2007 and didn’t stop until last year. GSI is heavy into the semiconductor tool business, and it got hit hard. Equipment sales dropped as much as 90% or more from the peak. The rest of manufacturing turned down in 2008 with the recession. That business was hit with a 50% drop in equipment sales, plus or minus. That's brutal.
Second, GSI is really well positioned in lamp-pumped solid-state lasers, and it has a wide range of other laser and system products in many nice niches. But lamp-pumped lasers have been in a decline for several years while fiber lasers are on the rise. Lamp-pumped lasers won’t disappear, but it’s just not the place to be these days.
Finally, we’ve heard comments about certain decisions made by management along the way, particularly regarding the whole restatement thing. The gist of these comments is that the process was badly mishandled. It certainly made a bad situation worse, and it’s relevant enough. But, you expect Wall Street types to point that out first. They look at financial statements for a living.
To me, I take the macro, long-view perspective. The downturn came at great cost to companies and to the people who work in them. Some got caught out in the storm. Let’s hope that things work out for the best from here.
Thursday, June 24, 2010
Paying for the solar market
I don’t usually venture into solar energy discussions, even though it is also an opto technology. For one thing, it depends a lot on policy decisions and I've been there, done that once before. And there's already plenty written elsewhere. But it's worth pointing out Vinod Khosla’s recent posting on the requirements of investing in solar.
Khosla’s piece is long with detail, but he basically says that startups have to “be competitive with silicon cells at thin film costs or be competitive with III-V cells (well over 20 percent) at silicon costs. Then you have a 50/50 chance of making it. But a billion dollars of capital and billion dollars of debt will be hard to pay off.” A lot of is just basic market sense, and that's exactly the point.
Khosla echoes more or less what we have seen in solar for years. Strategies Unlimited followed the solar industry for decades while it had steady 25+% compound annual growth. (Don’t believe me? Check out the figure below.) Now that solar is finally in the public imagination, overinvestment has become a increasing concern.
Source: Strategies Unlimited and Paula Mints (Navigant Consulting).
I wrote already about the market for lasers needed for making thin-film cells (first here and the sequel here). My point then was that the cycle is amplified because it’s the “second derivative."
I worked on solar cells myself, back in 1978 at Texas Instruments. It's great to see it finally make the big time, and if oil prices go up, it will be even bigger. I'm hoping so. A lot of smart people are working on it. Great things are still to come.
Meanwhile, if you're following solar, read Khosla's piece, and read the comments, too. It makes interesting reading.
Khosla’s piece is long with detail, but he basically says that startups have to “be competitive with silicon cells at thin film costs or be competitive with III-V cells (well over 20 percent) at silicon costs. Then you have a 50/50 chance of making it. But a billion dollars of capital and billion dollars of debt will be hard to pay off.” A lot of is just basic market sense, and that's exactly the point.
Khosla echoes more or less what we have seen in solar for years. Strategies Unlimited followed the solar industry for decades while it had steady 25+% compound annual growth. (Don’t believe me? Check out the figure below.) Now that solar is finally in the public imagination, overinvestment has become a increasing concern.
Source: Strategies Unlimited and Paula Mints (Navigant Consulting).
I wrote already about the market for lasers needed for making thin-film cells (first here and the sequel here). My point then was that the cycle is amplified because it’s the “second derivative."
I worked on solar cells myself, back in 1978 at Texas Instruments. It's great to see it finally make the big time, and if oil prices go up, it will be even bigger. I'm hoping so. A lot of smart people are working on it. Great things are still to come.
Meanwhile, if you're following solar, read Khosla's piece, and read the comments, too. It makes interesting reading.
Friday, June 4, 2010
Time for customers to pony up
There was news this week that Morgenthaler Ventures is ending its track for funding opto hardware start-up companies, mostly in silicon, but including optical components. This is not good news, to be sure, but maybe it's time again for the systems integrators to finally pony up for components research.
The conventional wisdom here in Silicon Valley is that venture-backed start-up companies form the engine of innovation for industries. The venture capitalists are nice enough to invest piles of money in component research, with the hope that they'll make even bigger piles for their investors, when they sell the start-up to a Cisco or an IBM, or they take it public.
Trouble is, I don't know how many times I've heard the systems integrators complain that they need new opto technology now. Not next year, not next month. Now! And these are the companies that are getting decent profit margins, unlike the components suppliers (don't make me name names, please). Well, if this stuff is so darned vital, the systems vendors should be willing to pay big bucks for it, right?
The VCs aren't investing in optical communication components because they don't see the return in it. If things get bad enough, the integrators will have to take on more risk. If that becomes too expensive, maybe they didn't really need it today, or even tomorrow. My bet is that they do need it, but were happy to let someone else pay for the development.
The wild card is whether some Asian government, such as Korea or China, will fill the gap in funding and gain a permanent advantage in the components market. If you think that the venture financing model is driven by a herd mentality or is too narrowly focused to be effective, then that may well happen. But if you think that, for all of its faults, the VC model is mostly rational and market driven, then it's just China's money getting wasted, to the benefit of the systems vendors.
The conventional wisdom here in Silicon Valley is that venture-backed start-up companies form the engine of innovation for industries. The venture capitalists are nice enough to invest piles of money in component research, with the hope that they'll make even bigger piles for their investors, when they sell the start-up to a Cisco or an IBM, or they take it public.
Trouble is, I don't know how many times I've heard the systems integrators complain that they need new opto technology now. Not next year, not next month. Now! And these are the companies that are getting decent profit margins, unlike the components suppliers (don't make me name names, please). Well, if this stuff is so darned vital, the systems vendors should be willing to pay big bucks for it, right?
The VCs aren't investing in optical communication components because they don't see the return in it. If things get bad enough, the integrators will have to take on more risk. If that becomes too expensive, maybe they didn't really need it today, or even tomorrow. My bet is that they do need it, but were happy to let someone else pay for the development.
The wild card is whether some Asian government, such as Korea or China, will fill the gap in funding and gain a permanent advantage in the components market. If you think that the venture financing model is driven by a herd mentality or is too narrowly focused to be effective, then that may well happen. But if you think that, for all of its faults, the VC model is mostly rational and market driven, then it's just China's money getting wasted, to the benefit of the systems vendors.
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