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.

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.

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.

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 brightest x-ray source in the Universe

What do you do with an aging linear accelerator? You use it to make an ultrafast free-electron hard x-ray laser, that’s what. And that laser is now the brightest x-ray source in the universe (so far as we know) and the only hard x-ray laser in the world. Where? At the SLAC National Accelerator Laboratory. At Stanford. It’s a national lab. Nice place, too.

Government labs love acronyms of acronyms, so the laser is called the Linac Coherent Light Source, or LCLS. Last month I was able to tour the new laser facility with the local IEEE Photonics Society chapter. It brought back flashbacks of grad school, but without the poverty. It’s a plush lab. For you laser geeks, here are some stats:

Pulse energy ~ 1 mJ
Pulse duration 5 to 200 fs
Peak power 10 GW
Average power 1 W
Repetition rate 120 Hz
Wavelength 0.1 to 10 nm
Electrical power bill per month: $ 1,000,000
Temperature control in beam delivery system: 0.01 degrees
Laser design: Self-amplified spontaneous emission (ASE)

The laser doesn’t sound that impressive, until you consider the infrastructure to build it. About 3 km of accelerator and beam delivery. A massive electrical bill to run the magnets and the air conditioning. A tunnel underground to keep the temperature stable (they used the same company to dig it that digs wine cellers in Napa Valley). The experiments are all done by remote control, just to ensure radiation safety. Not that they need to, with all the shielding and massive ground wires everywhere.

There is a great animation video that shows how it works, here. The electrons are accelerated to relativistic energies, then run through the free-electron laser, creating coherent hard x-rays. The rest is beam delivery. So, it’s just like your benchtop custom-built laser, but on a cosmic scale.

And what do they want to do with it? For one, it’s like a very fast x-ray camera that exists nowhere else on earth. It’s so fast, it can take diffraction images of crystals before the materials degrade from the x-rays. It can do pump-probe experiments on atoms and nuclei. It can reproduce the harsh environments in the universe by imparting a lot of energy into a very small volume. The SLAC SCLS aims a stream of x-rays at a small spot size, creating a huge intensity. (The new Livermore NIF laser also creates x-rays at the target, but they go in all directions. The NIF laser produces higher energy pulses, for fusion reaction.)

You can drive over the accelerator on Interstate 280, just near Sand Hill Road, near Stanford’s radio telescope and open cattle range. But you can’t just drive onto the SLAC national lab campus. There’s a guard. And anyway, the laser and beam delivery is all underground.

The numbers are in: $8.8B by 2014

We've finalized the 2010 edition of our laser report, and it's official: a 25% decline in the market for 2009, but still among the top 6 years in terms of revenue. And, everything from here is up, with about 9% growth to $8.8 billion in 2014. Some of you saw the draft in March, after the Q4 numbers came in. Here is the chart:

Fiber lasers are doing well, under the circumstances. Our estimate for fiber lasers came out a little higher than many people expected, including us. We recorded a decline of only 5% overall, to $280 million. IPG took a big hit in 2009, returning to its 2007 level. This is because it is strong in kilowatt fiber lasers. (Other kilowatt laser companies were hit even worse, like Rofin-Sinar and TRUMPF, for the same reason.)

But there are several smaller fiber laser suppliers that are selling into various applications from Europe to China. Two very promising sectors are medical systems and military projects. True, one could exclude some of those military projects from a count of the market, but it shows up as revenue to companies so we include them.

No shopping sprees. Another surprise is that, so far, there haven't been as many acquisitions as one might expect. This is partly due to the tight credit and the uncertainty that weighed on the market last year. There has been consolidation of other kinds, just not the kind of shopping spree that sometimes accompanies downturns.

More coverage. This year, we extended the coverage of the laser market report to include every major market, beyond fiber lasers, beyond even industrial lasers. It now has everything that the annual Laser Focus survey covers, but with the most updated data, forecasts to 2014, and 300 pages of detail not provided in the January issue of the magazine or the January seminar. (Disclaimer: our numbers also continue to differ in some key places from the LFW numbers due to differences in segmentation.)

Pecha Kucha 20x20

Ever wondered why techie presentations are so notoriously bad? You think, am I the only one who's bored or confused? Well, check out this completely new way of doing presentations. I've seen it and it's a breath of fresh air.

First of all, you know what kind of bad presentations I'm talking about, don't you? Presenters who assume you love their narrow topic. They have too much detail. The print is too small. Equations that you can't follow. Monotone voice. Wooden statue posture. A nervous laser pointer flitting across the screen. We're all guilty, and sure, photonics is supposed to be technical. But do so many presentations have to be so bad?

Well, there's a new way of presenting called Pecha Kucha 20x20. It's very simple. You present 20 slides with 20 seconds each. That's about 7 minutes. During that time, you can't ask questions--questions come after (sorry, Intel employees). You have to get through your main points fast, like an elevator speech.

I've seen it and it gets to the point. It cuts the bull. It's great for those small-ish sessions: internal company meetings, B-to-B briefings, that sort of thing.

It started in Japan as a social event in 2003 as a way for architects and other designers to network without boring everyone. It spread to cities all over the world. The subjects can include anything. There's now also a group called Ignite in the U.S. that is doing kind of the same thing, for fun. Imagine.

Using it as a social scene does sound a bit geeky. After working in the tech industry all day, the last thing you might want to do is to go listen to more Power Point presentations, even if they use 20x20. But, it's kind of the modern equivalent of Toastmasters. Or salons. Or speed dating. That might be fun after all.

Spread the word. Managers, start using 20x20 in your meetings. Salespeople, use it in your sales calls. Engineers, use it in your presentations, and leave the other slides as backup for the Q&A. Don't be afraid to try it. Think Pecha Kucha 20x20.