Semiconductor Laser Market Size, Share & COVID-19 Impact Analysis, By Type (Fiber Optic Lasers, Vertical Cavity Surface Emitting Lasers, Blue Laser, Red Laser, Green Laser, Infrared Laser, and Others), By Application (Medical & Aesthetic, Instruments & Sensors, Aerospace, Defense, and Military, Materials Processing, Communications & Optical Storage, Entertainment, Displays, & Printing, and Others), and Regional Forecasts, 2022-2029

The semiconductor laser market size was valued at USD 7.22 billion in 2021. The market is projected to grow from USD 7.69 billion in 2022 to USD 13.25 billion by 2029, exhibiting a CAGR of 8.1% during the forecast period. Asia Pacific dominated the global market with a share of 42.66% in 2021.

The global COVID-19 pandemic has been unprecedented and staggering, with semiconductor laser experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a decline 3.3% in 2020 as compared to 2019. 

Semiconductor laser is a diode that uses several semiconductor materials, such as gallium arsenide, gallium nitride, and silicon carbide, as an active medium. This product is used for various telecommunications, medical, and industrial manufacturing applications. It is used in various applications, including automotive, consumer electronics, and others. The products include blue lasers, infrared lasers, high output beam lasers, Fiber Optic Lasers (FOL), Vertical Cavity Surface Emitting Lasers (VCSEL), and others.

Rising demand for consumer electronics manufacturing for specific component manufacturing will aid market growth. According to the Consumer Electronics and Appliances Manufacturers Association, in 2020, the global consumer electronics industry was valued at USD 2.9 trillion and is growing at a fast rate. This is primarily owing to the increasing demand for advanced technology devices such as IoT-connected devices, smartphones, and others. Laser diode is widely used for the manufacturing of these components. Rising development of advanced technology-based laser solutions by the key players in the market will drive the market growth. For instance,

• In October, AMS Osram GmbH launched the shelf laser diode emitter Can Metal PLT5 522FA P-M12, which produces 514nm wavelength output. It was designed for several applications in the life science industry for research & development and diagnostics. This 514-nanometer laser diode enables scientific equipment manufacturers to replace traditional argon-ion lasers.

COVID-19 IMPACT

Closure of Manufacturing Activities Globally Hindered the Market Growth

The COVID-19 pandemic has restricted the manufacturing activities of several industries, including automotive, consumer electronics, and others. This declined the demand for the products required during manufacturing. Laser solutions are widely used in the manufacturing of consumer electronics, automotive, and other industries. Also, global automotive demand declined during the COVID-19 pandemic. According to the United Nations Statistics Division Development Data and Outreach, the share of the manufacturing value added to the global GDP declined from 16.6% to 16.0% between 2019 to 2020. The global semiconductor laser market share declined in market size by 2.5% in 2020 compared to 2019. In terms of revenue, the market witnessed a decline of USD 6.86 billion in 2020.

During the post COVID-19 pandemic, the demand for laser solutions increased across automotive and data center applications. A laser diode is widely used to manufacture several optical communications products to establish data centers. Rising investment by the vital tech players to establish data centers is driving the global market growth. For instance, in the first quarter of 2022, Microsoft Corporation planned to invest around USD 1.85 billion to establish data centers in India. Such rising number of data centers for development across India, Japan, and other countries is driving the demand for laser solutions.

LATEST TRENDS

Rising Adoption of Lasers Solutions in Various High-end Applications to Drive the Market Growth

Increasing adoption of laser diodes by the leading manufacturers of optical communication devices used in manufacturing the data centers applications to drive market growth. High-precision laser diodes are used to manufacture satellite components and various telecommunication devices. For instance,

• In July 2022, Silicon Photonics opted for a lasers diode to manufacture the data center and high-performance computing systems components. Laser diodes are used as they are cost-effective, low-power devices that accelerate optical device manufacturing. Scintilla Photonics raised around USD 13 million for accelerating the manufacturing and commercialization of silicon photonics for optical interconnects.


• In September 2022, Mitsubishi Electric Corporation began the shipment of advanced tunable laser diode chips used for optical communication devices. The company sold its laser diodes to manufacture the optical transceivers of optical fiber communication systems.


• In October 2021, Mitsubishi Electric Corporation launched an electro-absorption modulator laser diode chips sample of its 100 Gbps pulse-amplitude modulation (PAM4) for coarse wavelength division multiplexing.

Such a rise in the development and adoption of advanced laser technologies by significant manufacturers in the market is expected to drive the global market growth.

SEMICONDUCTOR LASER MARKET GROWTH FACTORS

Increasing Investments in Smart Connected Devices to Aid Market Growth

Rising investment by electronics device manufacturers in smart connected devices is expected to drive market growth. Laser diodes are widely used in manufacturing consumer electronics devices for high-quality products.

For instance,

• In November 2022, LG Display launched a 12-inch display that gets stretched by 20%. It has an outstanding free-form technology that gets folded, extended, and twisted without any damage or distortion. The display offers 100ppi (pixels per inch) resolution with full-color RGB, durability, reliability, and high flexibility.


• In March 2022, Samsung Electronics Ltd. consumer electronics invested about USD 200 million in India for setting up a new manufacturing plant. The company signed a Memorandum of Understanding (MoU) with the Indian government in Tamil Nadu to expand and strengthen the plant’s capacity.

Laser diodes have various applications such as medical diagnosis, scientific research, telecommunications, military equipment, barcode scanners, consumer electronics, optical storage devices, printers, entertainment, manufacturing, surveying, and others. They are widely used in medical, industrial, and communication applications.

RESTRAINING FACTORS

High Costs Associated with Laser Diode and Reliability Issues to Hinder Market Growth

These lasers have reliability issues and require a high initial investment for hardware component manufacturing. Also, the low power production of the laser is restraining the growth of the global market. Laser diodes require high manufacturing costs, which makes it difficult for new players to enter the market. High capital costs and reliability issues related to different laser diodes hinder the market growth.

SEGMENTATION

By Type Analysis

Rising Demand for Optical Communication Systems and Equipment to Drive Segment Growth

On the basis of type, the market is divided into Fiber Optic Lasers (FOL), Vertical Cavity Surface Emitting Lasers (VCSEL), blue laser, red laser, green laser, infrared laser, and others (compact disc laser).

Among these, Fiber Optic Lasers (FOL) segment is expected to have the largest market share in 2021, owing to the rising adoption of edge-emitting diodes in optical device manufacturing. Fortune Business Insights reports that global optical communication systems and networking was valued around USD 19.26 billion in 2021. The optical communication systems and networking market is projected to reach around USD 32.94 billion by 2029 growing with a CAGR of 7.09% during this period.

Vertical cavity surface emitting lasers segment is projected to increase with the highest CAGR over the forecast period. This is primarily attributed to the rising of these laser diodes across the data center and communication devices. Rising data center investment and a surge in the adoption of 5G devices drive this segmental growth. According to the Data Center Investment Outlook Report in 2020, the global data center investment in infrastructure increased from approximately USD 24.4 billion to around USD 53.8 billion in 2021. Such rising investments in the data center infrastructure drive the vertical cavity surface emitting lasers market growth.

By Application Analysis

Rising Investments in the Automotive Sector by Leading Players to Aid the Segment Growth

Based on application, the market is categorized into medical & aesthetic, instruments & sensors, aerospace, defense, and military, materials processing, communications & optical storage, entertainment, displays, & printing, and others (printing, lithography). Materials processing segment held the largest share in 2021. This is primarily owing to rising investments in manufacturing automotive component cutting. Laser cutting is widely used for metal cutting in the heavy machinery industry and automotive component manufacturing.

Instruments & sensors segment is projected to grow with the highest CAGR over the forecast period. This is primarily owing to increasing investments across IoT devices. Increasing sales of IoT devices and the surge in demand for advanced technology-based devices around the globe drive the global market growth. According to IoT Analytics Report 2021, globally, IoT connections increased by 8% in 2021, reaching around 12.2 billion.

REGIONAL INSIGHTS

Geographically, the market is studied across North America, Asia Pacific, Europe, the Middle East & Africa, and South America. They are further classified into countries.

Asia Pacific held the largest market share in 2021, owing to the robust manufacturing sector. Semiconductor laser is widely used for metal cutting across the automotive sector and heavy machinery manufacturing. Asia Pacific has countries such as India, China, South Korea, and Japan that have a strong manufacturing sector that accounts for the market’s largest share. Also, several countries’ governments in Asia Pacific are providing initiatives to promote the manufacturing industry. For instance, China’s government launched the Made in China 2025 state-wise industrial policy that accelerates high-tech manufacturing sectors. The program aimed to use government subsidies in the advanced manufacturing industries in China.

The manufacturing sector in India is developing fast with the surge in foreign direct investment. According to the India Brand Equity Foundation Organization, the manufacturing sector in India with foreign direct investments reached around USD 104.18 billion from 2000 till 2021.

North America is projected to grow at a moderate CAGR during the forecast period. This is owing to the rising development of data center investments with rapid development of 5G infrastructure. For instance,

• In March 2021, Alphabet LLC’s Google planned to invest over USD 7.0 billion for the expansion of data centers and offices in the U.S., with a pledge to create at least 10,000 full-time jobs at the company across several states.

Europe is projected to increase owing to rising demand from automotive manufacturers across Germany, Italy, the U.K., France, and others. Also, in Europe, the universities and main players in the market are collaborating to develop advanced technology based on small-sized laser diode solutions. For instance,

• In June 2022, Ferdinand Braun Institute from Germany developed laser diodes with narrow line widths and optical frequency reference. This laser was designed for manufacturing satellite and quantum technologies applications of semiconductor devices.

South America countries such as Argentina, Brazil, and others are growing with moderate CAGR during the forecast period. This is primarily owing to rising investment in the semiconductor industry. For instance, in September 2022, Brazilian government authorities planned to establish a semiconductor industry across Minas Gerais with a 4 million square meters facility.

The Middle East & Africa is expected to grow with a moderate CAGR owing to rising investments across the communication infrastructure sector. The Gulf countries such as the UAE, Saudi Arabia, and others have shown immense growth during the forecast period.

KEY INDUSTRY PLAYERS

Key Players in the Market are Offering Advanced Laser Solutions

The global market is fragmented due to the presence of several semiconductor laser players such as OSRAM Licht AG, ASML Holding NV, Coherent Inc., Jenoptik Ag, Mitsubishi Electric, Sumitomo Electric Industries Ltd., and TRUMPF Group. These major players are investing in expanding by implementing corporate tactics such as mergers, product launches, acquisitions, partnerships, and collaborations. For instance,

• In February 2022, Night, a fiber and lasers manufacturer for aerospace, military, defense, and manufacturing sectors, acquired Austria Based Plasmo Industrietechnik, a diagnostic and automated solution provider. This acquisition enables businesses to develop efficient, robust, and cost-optimized manufacturing procedures. nLight has strengthened the laser portfolio with the acquisition of Plasmo in the emerging market.


• In November 2021, OSRAM Licht AG, an optical solutions provider, enhanced its Light Detection and Ranging (LiDAR) laser line capacity for industrial applications. The company launched SPL TL90AT03 short laser, which is used for various applications, including site leveling, industrial automation, and traffic monitoring. The SPL TL90AT03 was explicitly built with 5 to 100 nanoseconds of wavelengths.


• In April 2021, AMS Ltd., a 3D sensing firm, acquired Osram Licht AG to develop opportunities for the laser product. With this acquisition, the company aimed to support product development across LiDAR and VCSEL laser technologies. The company aimed to broaden its product portfolio in several industries, including consumer electronics, medical, industrial, and automotive.


• In March 2021, Coherent, Inc. acquired U.S.-based optoelectronic components manufacturer II-VI Incorporated for around USD 7.01 billion.

List of Key Companies Profiled in Semiconductor Laser Market:

• OSRAM Licht AG (Germany)


• ASML Holding NV (Netherlands)


• Coherent Inc. (U.S.)


• Mitsubishi Electric (Japan)


• Huaguang Photoelectric (China)


• Hans Laser Technology Industry Group Co. Ltd. (China)


• IPG Photonics Corporation (U.S.)


• Panasonic Corporation (Japan)


• ROHM Co. Ltd. (Japan)


• Sharp Corp. (Japan)

KEY INDUSTRY DEVELOPMENTS:

• September 2022, Coherent Corporation in the communications and aerospace & defense industry firm launched I-Temp micro pump semiconductor lasers. The laser launched for the extended temperature operations for the optical networking.


• August 2022, Lumentum, Inc. acquired NeoPhotonics Corporation to expand its business across optoelectronics, semiconductor lasers, and cloud networking infrastructure.


•  April 2022, Lumentum Inc. launched a second-generation Femto-blade laser system. The company’s product offers high-precision, ultrafast industrial, and semiconductor lasers. This new system offers high power, better flexibility, and faster processing for metal cutting.


• April 2022, MKS Instruments acquired Atotech Limited to strengthen the product expansion related to lasers.


• March 2022, Ushio introduced red color laser diodes with wavelengths 670~690 nm for biomedical applications. These lasers are used for several applications such as industrial measurements, medical equipment manufacturing, and others.


• April 2020, Asahi Kasei Corporation, in collaboration with Nagoya University’s researchers in Japan, designed a semiconductor diode that emits ultraviolet light with the shortest wavelength. This laser has a wide range of applications in healthcare and the treatment of skin conditions and DNA analysis.


• January 2020, Ushio laser manufacturer launched a red color laser diode with 660nm wavelength. This diode has 400mW pulse power and 200 mW output. The series consists of several connectors.

REPORT COVERAGE

The research report includes qualitative and quantitative insights and a detailed analysis of the size & growth rate for all possible segments in the market. It also elaborates on market research, market dynamics, emerging trends, and the competitive landscape. Key insights offered in the report are the adoption of automation by individual segments, recent industry developments such as partnerships, mergers & acquisitions, consolidated SWOT analysis of key players, business strategies of leading market players, macro and micro-economic indicators, and key industry trends.

REPORT SCOPE & SEGMENTATION