Laser Focus World - January 2015

Laser applications by segment

Communication
Printing
Optical storage
Instrumentation

& sensors
Medical & aesthetic
Lithography
Materials processing

Source:

Strategies Unlimited

The Market Segments

The communications and optical storage segment remains the largest in the laser industry, followed by materials processing and lithography lasers. And for 2014, medical and aesthetic laser sales totals continued to be larger than the instrumentation and sensors category, followed by the scientific research and military category.

Communications and optical storage

Optical storage weakness continues to damper overall laser sales in the communications and optical storage sector; however, communications laser sales are vigorous. PIC-based communications network system provider Infinera calls it the “Terabit Era” and reported sales growth to $174 million in Q3 2014 compared to $142 million in the same quarter last year. And LightCounting (Eugene, OR) said that global sales of optical transceivers reached $1.1 billion in Q2 2014, the fifth consecutive quarter of growth.

Communications and optical storage laser revenues reached $3.515 billion in 2014 and are forecast to grow around 2.8% to $3.615 billion in 2015. Despite glowing financials from most telecom laser providers in 2014, the Dell’Oro Group (Redwood City, CA) projects a telecom capital equipment expenditure drop in 2015, citing high mobile device penetration, slower mobile data growth, lack of new revenue streams, and increased competition from developed and undeveloped markets. This forecast, however, is quite perplexing considering how the optical communications industry is promoting the “Internet of Things” (Io T): the connection of equipment and devices to the cloud for the purpose of remote monitoring, diagnostics, and a whole host of yet-to-be-named “smart” applications.

“From networked systems utilized in railways and electric
power grids to edge switches and client devices that connect as-
sets like laptops, field devices and wireless access points, Cisco
and Intel enable Predix [software] to be distributed to the edge,
even in some of the most severe conditions,” said Bill Ruh,
VP of GE Software (San Ramon, CA), in a press release that
describes how hardware and software mesh in an Io T world.

Cisco Systems (San Jose, CA) chairman and CEO John Chambers, in a keynote at the 2014 International Consumer Electronics Show (CES) in Las Vegas, reportedly “pegged the value of the evolving Io T” at $19 trillion, describing how Io T-based smart cities, for example, could see a direct return on investment through a smarter infrastructure. For quantitative backing, keynote guest speaker Antoni Vives, deputy mayor of Barcelona, Spain, said the city has saved $58 million a year using a smart water system, $37.5 million on smart lighting, and has increased parking revenue by one third through the use of smart parking meters.

Whether you call it the Io T or simply a world of “smart gadgets” that will convert the driver’s seat of an automobile (or a farmer’s tractor in the New Economy) into an Internet-connected data hub, it’s fortunate that photonics—and yes, lasers—are the “fuel” for this information engine. Can you imagine how much faster the Internet will need to operate in order to seamlessly manage the 4. 9 billion connected devices that Gartner (Stamford, CT) says will be in use in 2015— up 30% from 2014—and forecast to reach 25 billion devices by 2020?

Communications & optical storage

Includes all laser diodes used in telecommunications, data communications, and optical storage applications, including pumps for optical amplifiers.

While 2013 and 2014 were relatively strong in the communications sector, there are signs that 2015 may be a bit slower. 100G has been the jumping point these last two years, driven in large part by wireless operators building up their backbones. Driving this on the device side, LTE and Wi-Fi networks continue to be deployed, and data traffic continues to grow.

Prospects remain dim for optical storage. Streamed movies and music continues to grow in popularity, and solid-state memory prices continue to drop. Heat-assisted magnetic recording (“HAMR”) or using lasers to increase storage capacity of magnetic media may have some commercial products by

2016 or 2017, but with the growing use of Cloud services by consumers, it is likely HAMR will only find use in some very specific niche server farm applications.