29 November 2016

VCSEL market to grow at 22.3% CAGR to $4728.8m by 2024

The global market for vertical-cavity surface-emitting lasers (VCSELs) is rising at a compound annual growth rate (CAGR) of 22.3% from $775.2m in 2015 to $4728.8m in 2024, according to the report 'Vertical Cavity Surface Emitting Laser (VCSELs) Market - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2016 – 2024' from Transparency Market Research (TMR).

Currently, there is demand for efficient, low-cost and compact illumination systems, replacing traditional thermal imaging systems, notes the report. VCSELs are used for infrared illumination since they offer advantages including low cost, high reliability, efficiency, a narrow emission spectrum, and a low-divergence cylindrical beam. Infrared illuminators, in turn, find application in surveillance, imaging, covert operations and detection in several end-use sectors such as the military. This has had a considerable impact on the demand for VCSELs, says the report.

GaAs most widely used raw material

By raw materials, the VCSEL market is led by gallium arsenide (GaAs), which accounted for a massive 77% share in 2015. The segment is expected to register a CAGR of 41.1% during the forecast period.

By application, the overall VCSELs market is dominated by optical fiber data transmission, followed by laser printers and computer mice. Chip-sale atomic clocks and absorption spectroscopy, on the other hand, will register strong growth through 2024.

By geographical region, Europe accounts for the leading share of the VCSELs market, at just under 30% in 2015, but the Asia-Pacific will see an impressive CAGR of 23.1% over 2016-2024, forecasts the report.

Demand for GaAs rising in low-power applications

"The growing usage of VCSELs in several high-volume applications, such as gesture recognition, data communications, and illumination in infrared (IR) cameras, has emerged as the leading factor driving the global VCSELs market," states the lead analyst for the report. Companies have been using VCSELs in gesture recognition technology for gaming as well as navigation applications. In IR cameras, VCSELs enable safety, night vision, and security. In data communications, VCSELs offer advantages including low-energy optical storage, fast switching in servers, and high-capacity data centers.

With VCSELs rapidly replacing edge-emitting LEDs in low-power applications, the demand for GaAs has surged significantly, especially in atomic clock technology, datacoms, bar-code sensors, and plastic optical fiber (POF)-based home networking. This will, in turn, propel the overall VCSELs market, says the report.

On the flip side, although long-wavelength indium phosphide (InP)-based VCSELs show a lot of promise, the lasers are in the early stages of commercialization and can prove to be a challenge concerning the design, cost and manufacturing.

The global VCSEL market is currently fragmented, with Finisar Corp (USA), Broadcom Ltd (Singapore) , Lumentum Holdings Inc (USA), Sumitomo Electric Industries Ltd (Japan), and II-VI Laser Enterprise GmbH (Switzerland) accounting for under 47% of the market in 2015. However, Transparency Market Research notes that, due to a rise in mergers and acquisitions within the industry, the dynamics of the market have changed over the years.

Apart from this, players have also resorted to product innovation and investment in technological advancement as key growth strategies. "Product innovation is important to sustain in a highly competitive environment, and companies have been involved in strong R&D work so as to gain a larger share in the VCSELs market," the report's author states. For instance, in order to retain its dominance Finisar has, from time to time, introduced new products in the VCSEL market (e.g. the 64 Gbaud high-bandwidth integrated coherent receiver in 2016).

Tags: VCSELs

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