Why LEDs are doing better than industrial lasers

The difference between the high-brightness LED and the industrial laser markets couldn't be wider right now. My colleague, Bob Steele, forecasts that LED revenues will decline 5% in 2009. I'm forecasting that industrial laser sales will drop by over 30%. And that's if 2009 follows the current trend. Some sectors will be worse.

Why so different?

It turns out that a lot of LEDs are sold into consumer products like mobile phones, displays, that sort of thing. Sales are down, but these products aren't out of reach for people who still have jobs.
Industrial lasers, on the other hand, are expensive capital items that are usually used to make something else. When factories are idle, or closing, you aren't likely to need much new capital equipment. It is a good time to upgrade, but the recession leaves most companies short of spare cash, so capital spending gets cut. And we don't count consumer applications like lasers for laser pointers and DVDs in this category.

Think about it: you are still buying groceries, and maybe even replacing some of your electronic appliances. But a lot fewer people are buying new cars these days.