Will materials processing drive global laser markets again in 2018?
As I wrote last month, OLED screens and VCSELS have been big drivers of laser markets. A third segment that performed incredibly well in 2017 was materials processing, specifically high-powered lasers for materials processing produced by companies such as nLight, IPG Photonics, Lumentum, Wuhan Raycus, and Coherent.
For reference, in 2017, total revenue for the macro (1 KW+) materials processing laser segment was $2.3 billion, which was a 54% increase over 2016 laser revenue in the same segment. Keep in mind, a typical yearly increase in high-power materials processing averages about 5-7%, so 2017 was an exceptional year for this segment. The question is, can this growth continue in 2018?
Related: The 30th Annual Lasers & Photonics Marketplace Seminar—More good news ahead, in-depth coverage of the keynotes, interviews, and panels
Most of the growth in KW+ lasers in 2017came from Asia (especially China) and Europe, with North America being relatively flat. In Europe and Asia, the majority of laser gains in KW+ laser revenue can be attributed to three factors: 1) Increases in laser usage due to laser tools displacing non-laser forms of manufacturing; 2) Increases in large manufacturing projects requiring laser tools; and, finally, 3) A fear of future laser price increases due to trade restrictions and tariffs.
Which of these three factors had the greatest influence has been cause for debate, but without question all played some part. Laser tools are rapidly replacing non-laser tools, a good economy is fueling many projects, and the fear of trade restrictions caused pre-emptive buying.
Because the threat of tariffs and trade restrictions may have played a part in KW+ laser growth in 2017, let’s see what has materialized so far in 2018. On June 15, President Trump approved a 25% tariff on approximately $50 billion worth of Chinese imports including laser machine tools, optical products, and lasers other than laser diodes. In response, China has published its own list of U.S. products it plans to place either a 15% or 25% tariff on. This list is mainly composed of fruits, meats, and types of steel tubing--but not lasers.
Related: $50 billion in tariffs to be imposed by the U.S. on Chinese imports include numerous photonics products – report by senior editor John Wallace
Read the full blog from Allen Nogee:
Allen Nogee | President, Laser Markets Research
Allen Nogee has over 30 years' experience in the electronics and technology industry including almost 20 years in technology market research. He has held design-engineering positions at MCI Communications, GTE, and General Electric, and senior research positions at In-Stat, NPD Group, and Strategies Unlimited.
Nogee has become a well-known and respected analyst in the area of lasers and laser applications, with his research and forecasts appearing in publications such as Laser Focus World, Industrial Laser Solutions, Optics.org, and Laser Institute of America. He has also been invited to speak at conferences such as the Conference on Lasers and Electro-Optics (CLEO), Laser Focus World's Lasers & Photonics Marketplace Seminar, the European Photonics Industry Consortium Executive Laser Meeting, and SPIE Photonics West.
Nogee has a Bachelor's degree in Electrical Engineering Technology from the Rochester Institute of Technology, and a Master's of Business Administration from Arizona State University.