2021 Lasers & Photonics Marketplace Seminar: Wrap-up Roundtable Discussion

Four weeks after the actual Laser & Photonics Marketplace Seminar, Laser Focus World Editor in Chief John Lewis gathered some of the seminar’s key contributors for a panel discussion. The first question was obvious, but delivered some key takeaways: what has happened since Photonics West 2021 and the Lasers & Photonics Marketplace Seminar concluded?

The market analysts had gained access to Q4 data from 2020 and revised their reports accordingly. Allen Nogee, President of Laser Markets Research, who oversees the annual laser market report in Laser Focus World, corrected his figure for the total laser systems market from 8% slightly down to 5.6% growth in 2020 compared to 2019. That assumed a strong fourth quarter in 2020. Steve Anderson, Director, Industry Development at SPIE, confirmed this impression. He found that the 30 largest photonics companies as counted by SPIE saw a 15% increase in Q4 over pre-pandemic levels.

John Dexheimer, President, LightWave Advisors, added another valuable point to the discussion: special-purpose acquisition companies (SPACs) and their investments in photonics. Just recently, such SPACs made headlines with their investments in the lidar area, and in March 2021, the SPAC SC Health Corp. announced its merger with Rockley Photonics. Rockley Photonics developed a silicon photonics sensor that may serve as “clinic on the wrist” for noninvasive health monitoring.

That is interesting in two regards. First, SPACs offer a way for a fast-growing company that is going to consume a lot of cash in a high-tech market to get a big amount of money up front, so that they are not continuously fundraising. SPACs fit in between traditional IPOs and late-stage venture capital. For Rockley Photonics, that was $323 million in gross proceeds to the combined company to help speed up the commercial launch of its platform, as Reuters reported.

This leads to the other interesting point: Rockley Photonics gets the funding to develop healthcare products, in particular for point-of-care diagnostics. Dexheimer sees a strong push to point-of-care and remote or distributed systems: “A big theme that probably is going to continue and get traction, even if those devices don’t have the gold standard efficacy,” as he emphasized. Point-of-care diagnostics have been a trend before, but the pandemic has given this idea a massive boost.

A key experience during the pandemic was the transformation of live events into digital conferences and trade shows. Anderson shared insights from Photonics West, the largest U.S. conference and trade show for photonics: With around 8000 attendees, Photonics West defended its title as the largest conference in this field. “The area which is still challenging for everybody is the virtual exhibits or digital marketplace,” he added. With about 400 exhibitors, they had quite some interest, but the visitor experience is still far from a live event. Quantum West has been introduced as a new part of Photonics West that was successful from the start. The future for such conferences and trade shows is still unclear—it will depend on vaccination and international travel restrictions.

Finally, a major discussion of the photonics community made it to the panel: The bidding war for Coherent (Santa Clara, CA). A lot has been said and written about it, but Dexheimer added an essential thought why such big mergers and acquisitions happen: “There is a push to have companies get above $10 billion in market value.” Beyond that threshold, companies can expect more investor support, he reflects.

On the other hand, as Nogee added, there has been a hunger for acquisitions in the laser field for quite some time—but the number of companies out there that can be acquired in the big laser area is decreasing. Coherent was one of the few companies that were available at all. Their revenue dropped from $1,903 to $1,229 within two financial years. That is an effect that some people see as an opportunity, where they may have the opportunity to fix the problem.

At the time of writing, it remained to be seen who would win the race to fix those problems. It also remains to be seen what impact the pandemic has within the rest of the year. The outlook among the experts is optimistic, as is the position of the organizers of the Lasers & Photonics Marketplace Seminar. The next seminar will be held along with Photonics West 2022, hopefully onsite, in San Francisco, CA on January 24, 2022.