computers, entertainment, and telecommunications is now
an industry larger than any of the old giants of yore, such as
construction, food products, or automobile manufacturing.
This new information-based sector already occupies 15% of
the total U.S. economy.” As Kelly concludes, “The geogra-
phy of wealth is being reshaped by our tools. We now live
in a new economy created by shrinking computers and ex-
panding communications.”
Kelly’s description of the modern farmer harkens back to the
statements made in last year’s laser market review by Karlheinz
Gulden of II-VI (Saxonburg, PA) on the ubiquitous use of smart
gadgets. Kelly alludes to the use of lasers in communications,
sensing, and transportation applications when he writes: “A
farmer in America—the hero of the agricultural economy—
rides in a portable office on his tractor. It’s air conditioned,
has a phone, a satellite-driven GPS location device, and so-
phisticated sensors near the ground. At home, his computer
is connected to the never-ending stream of weather data, the
worldwide grain markets, his bank, moisture detectors in the
soil, digitized maps, and his own spreadsheets of cash flow.
Yes, he gets dirt under his fingernails, but his manual labor
takes place in the context of a network economy.”
Despite the fact that the Conference Board (New York, NY)
Global Economic Outlook 2014 predicts that global economic
growth in 2015 will hold at a rate of 3.4%, here’s hoping that
laser-based technologies will continue to command a larger
and larger share of the New Economy as one of the key net-
work “tools” that will reshape the aforementioned “geogra-
phy of wealth” in favor of the laser manufacturer.
Why optimism?
According to an article in Quartz, which is “a digitally native news outlet, born in 2012, for business people in the new
global economy,” 2014 will see a surge in laser 3D printing
system sales since certain key patents from 3D Systems (Rock
Hill, SC) for laser sintering and stereolithography will expire,
opening the market to new system players—especially Chinese
companies. In May 2014, it was reported that the China 3D
Printing Technology Industry Alliance will invest $33 million
in 10 innovation centers for 3D printing technology in 10 different cities in China.
3D printing revenues continue to rise across the industry:
3D Systems’ revenue was $466 million for the nine-month
period ended September 30, 2014, compared to $358 million
for the same period last year—a 30% increase. Voxeljet’s
(Friedberg, Germany) Q3 2014 3D printer systems’ sales
revenue grew 23.3%; and Optomec (Albuquerque, NM), a
supplier of additive manufacturing systems for 3D printed
metals and printed electronics (PE)—an emerging technol-
ogy being fostered by organizations like the PE Test Center
Network—more than doubled its order bookings through
the first three quarters of 2014. Clearly, laser 3D print-
ing is meeting the high expectations we set in our Laser
Marketplace 2014 report.
And as if 3D Systems’ own 3D printing systems’ revenues
weren’t exciting enough, the company also acquired Layer Wise
(Leuven, Belgium) and its proprietary line of direct metal la-
ser additive manufacturing (LAM) printers for aerospace, oth-
er high-precision metal components, and medical and dental
customers. 3D Systems even expanded into 3D healthcare and
personalized medical solutions capabilities with the August
2014 acquisition of Simbionix (Cleveland, OH), which specializes in FDA-cleared, 3D virtual-reality surgical simulation
and training solutions.
Besides the 3D laser printing boom, if you believe that
strength in mergers and acquisitions (M&A) activity is an
economic indicator of future growth, take comfort in an-
nouncements by Mike Simon at OEM Capital (New York,
N Y) over the past year that show a steady increase in technology M&A activity: as of May 2014, technology M&A was
up 10% over the prior year’s period and more recently, as of
October 2014, was up 19%.
In the laser sector, Oplink was acquired by Koch Industries
in November 2014 for more than $400 million and will now
be managed by Koch-acquired Molex (Lisle, IL) in a move
that raises speculation about more optical communications
component consolidation by traditional photonic and not-so-traditional investor groups and mega-sized private companies (like Koch) over the next few years.
Also in 2014, Laserage (Waukegan, IL) acquired the la-
ser contract manufacturing business of Directed Light (San
Jose, CA); ESI (Portland, OR) acquired Wuhan Topwin
OE (Wuhan, China) to improve laser system sales locally within China; the Zemax division of Radiant Zemax
(Redmond, WA) was acquired by Arlington Capital Partners
(Washington, DC) in October 2014; Thorlabs (Newton, NJ)
acquired the quantum cascade laser business of Corning
(Corning, N Y); NeoPhotonics (San Jose, CA) acquired the
tunable laser product line of EMCORE (Albuquerque, NM)
to expand its photonic integrated circuit (PIC) capabilities;
and M/A-COM (Lowell, MA) acquired indium phosphide
laser and silicon photonics solutions company BinOptics
for $230 million.
Compared to 2013, 2014 worldwide laser sales grew around
6% to $9.203 billion. Even with falling inflation leaving many
economies in a holding pattern and continued weakness in the
optical storage, military, and scientific R&D sectors, growing
awareness of the laser industry and the bold future of emerging applications like 3D printing, smart gadgets in the New
Economy, and improving M&A activity skew our laser forecast in the positive direction. For 2015, we forecast laser sales
to grow 6% to $9.754 billion.
