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Global Photonics market, Military Photonics and technology trends

Photonics is the science and application of light; it is the technology of generating, controlling, and detecting light. The characteristics of the waves of light or individual photons that make up light can be used to explore the universe, cure diseases, and even solve crimes. Underpinning all of the light-enabled products and services are fundamental (or core) photonics components, which range from raw materials to image sensors, and from light-emitting diodes (LEDs) to lasers.

 

Photonics is everywhere: in consumer electronics (barcode scanners, DVD players, TV remote controls), telecommunications (fiber optics, lasers, switches), health (eye surgery, medical instruments), manufacturing (laser cutting and machining), defense and security (infrared cameras, remote sensing), and entertainment (holography, cinema projection), to name a few examples. Photonics is so ubiquitous in our daily lives that the 21st century has been called the Age of the Photon.

 

The advancements in the photonics market have been stimulated owing to developments in the field of fiber optics and the introduction of electricity, which have given a boost to the conversion. The development of optics has reached its zenith with highly advanced contemporary lasers gradually replacing traditional electric bulbs and primitive lamps. The evolvement of photonics has also resulted in a steady increase in the performance of both OPV and OLED technologies. Advancements in optics have made rapid strides in the photonics-based field in the past few years and are further broadening the technological horizons.

 

Innovative photonic-enabled connected services and products are expected to be introduced and are expected to have positive impacts on organizational as well as consumer activities. The emergence of flat-screen displays and the increasing use of the photonic-enabled high-speed internet have considerably changed the dynamics of the market. Photonics is a Key Enabling Technology (KET) within the Information and Communications and Technology (ICT) vertical owing to its advantages and high economic growth across various industries.

 

In a presentation by Evan Nisselson, General Partner and Founder of LVD Capital., highlighted the role of “visual technology” in our everyday lives. Cameras are everywhere and increasingly in our devices, and while cameras and camera components are experiencing exponential growth (he estimated that there will be 45 billion cameras by 2022), what is key is how we use the visual data. He said that the next wave is the “internet of eyes,” where vision is connected across sectors. Some examples he gave include the possibility for mirrors to have sensors that could track health issues. Autonomous maritime can automate boats and cargo ships. Videos can train computers to understand gesture recognition. Alexa can do our shopping for us, and it can be delivered by an autonomous robot. He concluded by saying that optics and photonics are critical to the future. “It’s just the beginning.”

 

Some of the mega-markets within the photonics industry include Industry 4.0, digitization, quantum, AI, and IoT and these are driven by applications within space, healthcare, environmental, defense and telecommunication industries. Photonics also includes emerging forms of quantum optics, polaritonics, and optomechanics.

 

Military Photonics

The military relies heavily on the optical spectrum for sensing, mapping and identifying enemy intent over large distances. Photonics can provide the military with higher quality sensing and communications devices. The vision of photonics is generating and harnessing photons for real-time, high-resolution, wide area persistent day/night surveillance, missile imaging and tracking, biological and chemical Sensing, optical networks, high-bandwidth free-space communication, information processing and Optronic Warfare.

 

Modern defense systems are migrating toward optically based imaging, remote sensing, communications, and weapons. In Optics area, plastic optics has started entering mainstream along with glass optics. Staring array IR detectors have come into use reducing the size and weight of thermal imagers.

 

Uncooled IR imagers are providing advantages like low weight and small size but have got range limitations as compared to cooled ones. Mercury Cadmium Telluride (MCT) detectors are dominant in LWIR area and InSb the MWIR area. An example of a photonics based technology for military use is multispectral imaging, which can extract significantly more information about its surroundings than regular sensors. Multispectral imaging can be used for tasks such as locating explosives, uncovering enemy movements and pinpointing the depth of hidden bunkers.

 

Multi-spectral cameras have been developed, The Targeting ability of weapon systems in adverse environments will be increased using multi-spectral sensors and supporting algorithms. Sensor fusion and Automatic Target Recognition technologies are critical technologies. Diode lasers are coming into use in low power lasers.

 

Modern weapon systems have day/night vision along with multi-sensor acquisition and tracking capability which is enabled by microwave and/ or millimeter wave radar, thermal imagers operating in the mid- and long wave infrared bands, laser range finders, ultraviolet receivers, and television systems operating in the shortwave infrared and optical bands .

 

Fiber Optical communication systems, enabled by Erbium-doped fiber amplifiers (EDFA) technology have replaced of electronic communications in the telecom, datacom and military communications especially for long haul (> 1000 km) communication links. Also at the metro, to access, to in-room and intra-rack scales, optical fiber has completely replaced copper due to its advantages like high speed, minimum EMI.

 

The Free Space Optical Communication (FSO) technology has matured to some extent for fixed-site commercial deployments. The military adoption of FSO data links is also increasing because of their ability to provide gigabits/s data rates ,low probability of intercept (LPI), low probability of jamming (LPJ) as well as the potential for extremely low bit error rate (BER) characteristics. The potential applications of Free Space Optical Links in the military domain are many, from short-range inter-ship links and UAV-to-ground data links. FSO systems are expected to dominate aircraft-to-aircraft and satellite-to-satellite communications links, they where the weather and fog, turbulence and battlefield obscurants cannot degrade their system performance.

 

Directed energy laser weapons have reached a high level of maturity phase and ready to enable many new missions that were extremely complex to realize with conventional kinetic energy weapons. These include ground based laser systems (GBL) for disabling low earth orbit satellites and destroying missiles, airborne laser systems (ABL) for destroying ballistic missiles and space based laser systems (SBL) for negation of theatre and intercontinental ballistic missiles.

 

The Laser DEW are continuously being enhanced through ultra high efficiency multi-kilowatt single mode lasers, incoherent & coherent beam combining technologies, light weight large aperture beam directing optical systems, high precision (sub microrad) tracking & beam pointing technologies, electronic beam steering technologies – optical phased array, adaptive optical system technologies for long range atmospheric beam propagation correction and thermal management systems. Technologies for multiple target detection and tracking abilities coupled with extremely short reaction times and a very high hit probability are being built into a DEW system.

 

Photonics based spectrometers and holographic imagers are also used in the military. A spectrometer is a chemical sensor that can be used to detect explosives in liquids and solids. A holographic imager is a device that produces 3D visualisations of urban and mountainous terrain. A major advantage of these photonics devices is that they are lightweight and small, making them easily portable for soldiers in the field.

 

Imaging Sensors & Optics

Increasing and enhancing imaging capabilities to solve soldier problems like obscured vision, long-range identification and high performance infrared imaging. All this at higher operating temperatures and with reduced size, weight, power, and cost.

 

Ultraviolet (UV) Optoelectronics

Developing new devices with enhanced material properties for UV detectors, light emitting diodes and lasers. Applications include sensing, water purification and monitoring, threat mitigation and communications.

 

Sensor Protection

Exploring specialty materials and devices designed to protect eyes and sensors from wavelength agile microsecond to nanosecond pulsed lasers and ultrafast lasers in multiple wavelength bands.

 

High Energy & Tactical Lasers

Investigating materials for solid state lasers suitable for military applications. Research is directed at improving laser average and peak power, thermal management, scalability, beam quality and efficiency.

 

Global Photonics market

To put the value of photonics into perspective, the global GDP in 2018 was about $84.8 trillion. The value of light-enabled products and services is estimated to be between $7 and $10 trillion. So, the value of photonics is about 11% of the world’s economy.

 

The global photonics market size was valued at USD USD 593.7 billion in 2020. The market is estimated to rise from USD 802.5 billion in 2021 to USD 1267.3 billion by 2028 at a 6.7% CAGR during the forecast period 2021-2028.  The Photonics market is driven by the growing application of photonics-enabled products in the healthcare sector, information and communication sector, and industrial sector.

 

Photonics-based devices deliver increased energy efficiency compared to other technologies across diverse verticals. This aspect has been identified as a significant market driver. In industrial applications, photonics-based processes ideally consume 30% less energy than conventional machines, in addition to offering material wastage savings up to 94% and faster operating times. Similarly, multiple other operations, such as data transfer, printing, and imaging, observe relatively more benefits associated with size, function, and performance and ensure reduced energy consumption.

 

The global share of the photonics components market is shifting as dominance of Asia, and specifically China, increases. The components industry has shown solid growth above global GDP since 2012. The estimated photonics components industry revenues for 2018
are $282 billion, which represents a compound annual growth rate (CAGR) of 10.6% for the 2016-2018 period. Global annual revenues for photonics-enabled products exceeded $2.0 trillion in 2019 and are expected to remain flat-to-down in 2020 due to the impact of the pandemic. Production of photonics-enabled products generates more than four million jobs worldwide.

 

However, although the advent of COVID-19 has impacted the outlook for 2020 and 2021, 2019 appears to have been a very strong year for many companies. While components revenues for 2020 and 2021 are likely to be lower than in 2019, we anticipate that 2020 could end up higher than in 2018. Photonics products have enabled the work-from-home and school-from-home build outs, diagnostic testing equipment, disinfection systems and non-contact systems, and other items needed to combat or contain COVID-19. SPIE currently expects global component revenues for 2020 will end up about 23% higher than 2018 at $347 billion.

 

Market Segments

The photonics value chain starts with raw materials like glass and semiconductor substrates and progresses through optical components and subsystems to photonics-enabled products such as lighting systems, data centers, and smartphones. The global photonics-enabled the marketplace is based on these “end-use” products.

 

Photonics technologies also underpin a large range of enabled services based on the Internet, which relies on optical fiber to transport its data. These services include cloud computing, streaming video, and e-commerce. Each level of the value chain has higher value than the previous one, so the total revenues associated with the enabled services, for instance, are much larger than those derived from the core components.

 

The complexity of the categories increases with the higher value. For the enabled products, lighting systems serve a different set of end-users with unique market dynamics and regulatory environment than, for instance, medical imaging scanners, or data centers. As a result, each “photonics-enabled” market sector moves independently, which means that measuring the size and impact of each one can be a significant undertaking.

 

By application, the Photonics market is classified into seven main end-use applications, namely Displays, Information & communication technology, Photovoltaic, Medical Technology & Life sciences (Biophotonics), Measurement & automated vision, Lighting and Production Technology.

 

In the information and communication technology application, Photonics technology is majorly used for data generation, transformation, data transmission and storage, data conversion, and data usage. Devices that are used in each of these processes are a part of the photonics materials & component industry. Also, there are services based on these processes that utilize photonics. The photonics materials & component industry includes devices used for data conversion, amplifier systems, light modulation systems (modulators, switches, and routers), and fiber optic cables

 

LED segment account for the largest share in the overall Photonics market. LED products are energy efficient and available at affordable prices—increasing usage of LED in lighting and display applications to drive its demand during the forecast period. APAC accounted for the largest market share of the LED product type segment in 2019. Energy-saving measures drive the surge in demand from applications such as general lighting, automotive, and backlighting.

The demand for lasers has driven global sales revenue growth well ahead of global GDP for more than fifty years. The industry has grown to the point that combined demand for lasers and all other photonics components in 2018 underwrote more than 1 million jobs worldwide. As employment has grown, so too has the number of countries hosting components manufacturers, making it a truly global industry

 

Enabled markets segment trends

In terms of revenues, the top five growth segments based on compound annual growth rates between 2012 and 2019 were:
• BioMedical (+13%): Double-digit growth in diagnostic imaging, digital pathology, in vitro diagnostics, and point-of-care diagnostics led broadbased gains across this segment. Food safety testing also saw a significant uptick.
• Defense, Safety and Security (+10%): Driven by single-digit gains in more than 30 sub-segments combined with substantial upswings in video surveillance, perimeter security and sensing, and investment in equipment for directed energy systems.
• Sensing, Monitoring, and Control (+10%) Autonomous systems and the Internet of Things continued to create demand for a wide variety of
photonic sensors.
• Advanced Manufacturing (+8%): Gains in this segment were led by lasers for materials processing while robotics and vision technologies maintained their momentum–as did implementation of 3D printing/additive manufacturing.
• Semiconductor Processing (+8%): This segment is inherently cyclical so despite a softening of equipment revenues in 2019 compared to the all-time high of 2018, revenues for optical processing and metrology equipment in 2019 showed a healthy growth rate as compared to 2012 and to our previous study in 2016.

Technology Trends

The industry is characterized by the presence of considerable growth opportunities over the forecast period. An emerging trend in the industry is the commercialization of environment-friendly photonic-based renewable energy sources, such as solar cells. Although other developments, such as flexible PV-based on plastic electronics, offer lower efficiencies, they are anticipated to reduce the production cost, consequently leading to the mass use of solar cells on the exterior cladding of buildings, cars, and clothing.

 

Trends seen throughout the event were what one could expect: AR/VR/MR, vision, lidar and autonomous technologies, and an increased focus on solving problems within applications. The trends in photonics, such as lidar or additive manufacturing are rising. Lidar technology has been used for decades to analyze the distribution of gases and pollutants in the atmosphere. It has become a crucial technology for autonomous driving in recent years.

 

Technological advancements in light-based technologies have been driving the new wave of innovation by providing sustainable solutions to global challenges, which has been identified as a major driving factor for the global market. However, due to the high cost of applications of photonics products, the market is expected to face challenges in the future.

 

Displays: Higher resolution displays with continually improving performance are driven by evolving display technologies such as OLEDs, microLEDs, laser-based, and foldable/rollable devices.

Artificial, Virtual, and Mixed Reality (AR/VR/MR): AR and VR are establishing themselves in medicine and industry for training, marketing, and e-commerce. Gaming and entertainment are driving consumer adoption.

Medical: Cost-effective photonics-based diagnostic and therapeutic medical devices are achieving higher market penetration. Wearables are rapidly advancing, enabling real-time monitoring of physiological parameters for wellness and disease control.

Solar/PV: Diminishing panel cost combined with anticipated moreeconomic storage options (batteries) is driving large increases in solar deployment across the globe. Nextgen thin-film PV (e.g, perovskite) promises improved performance.

Defense and Security: Infrared systems, hyperspectral imaging, and laser-based countermeasures are all deployed, while laser weapons are emerging as a real near-term possibility.

Lighting: Penetration of LED technology is increasing, driven by declining cost-per-watt of LEDs and higher value-add in smart and human-centric lighting systems. Applications such as sterilization, photonics in precision farming, and water purification are also benefiting from lower cost smart sources.

Autonomous Systems: Self-driving cars, drones, and other robotics systems utilize a wide range of photonic sensors and imaging systems,
some of which are increasingly benefiting from embedded artificial intelligence.

Advanced Manufacturing: Photonics-based production tools including lasers, optical metrology, and machine vision combined with adoption of rapid prototyping and Industry 4.0 are driving big manufacturing changes in industries like aerospace and automobiles.

Quantum Technology: Developments in the emerging field of quantum technology will drive major advances in metrology, sensing,
communications, and computing, creating a multitude of new opportunities in photonics.

Optical Communications and Information Backhaul needs for 5G implementation will drive developments in communications, while in data centers the photon will increasingly solve the limitations of electronics, which is facing the immutable limits of fundamental physics.

 

Optical metamaterials are one of the most exciting recent advancements in the field of light technologies. These metamaterials could be used in super-resolution imaging, invisibility cloaks, biomolecular sensing, photonic computing, communication and information processing.

 

Silicon Photonics

Silicon-based photonics application is the key driver for the photonics market. Hybrid silicon lasers (silicon and group III-V semiconductor) are used in telecommunications and data center applications, which gives the advantage of light-emitting properties of III-V semiconductor materials.

 

Silicon photonics is an evolving branch of photonics offering a clear advantage over electric conductors used in semiconductors, which are used in high-speed transmission systems. In data center applications, fiber-based optical interconnects can be used to provide point-to-point links, enabling high-bandwidth, inter-rack, data communications. However, due to the use of bulk optical components, high energy and cost are key disadvantages. The integration of silicon photonic devices can be used for high-bandwidth, multi-channel, wavelength division multiplexed with effective optical communication.

 

The realization of an on-chip channelized spectrum monitor and a network-node-on-a-chip is a key example, where these optical integrated circuits are used to replace bulk optical components with their functional equivalents on monolithic silicon. 100G silicon photonic transceiver is gaining the market share, due to its high data speed data communication with future integration in 5G technology.
Intel Corporation’s portfolio of 100G silicon photonics transceivers is optimized to meet the bandwidth requirements of next-generation communications infrastructure, while withstanding harsh environmental conditions.

 

Geographical

In terms of regional markets, China has a clear lead, with Europe and North America vying for a tie at second place.

 

APAC is estimated to account for the largest market share during the forecast period. “ APAC is estimated to be the largest market for Photonics and is projected to register the fastest CAGR during the forecast period.China is expected to account for the largest share of the market in APAC by 2025.

 

European Photonics Industry

Growing to a global market size of €654 (~$790) billion in 2019, the research shows photonics managed to grow at a CAGR of 7%. Following this continual CAGR at a conservative 6% projection forward, the Tematys study shows that the global photonics industry will reach €900 billion ($1 trillion) by 2025. “With a global growth rate of CAGR 7 %, photonics is growing faster than many other high-tech industries, for example, the IT industry (4.5%), Medtech (4.9%), and Microelectronics (4%).” – Giorgio Anania

 

From 2015 to 2019, Europe maintained a clear second position in the global photonics market against fierce international competition. Although Europe and North America had held a joint 16% global market share in 2015, the new research showed Europe had nudged slightly ahead to 16%, with North America on 15%. China continued to dominate with 29% of the global market share – Europe (16%), North America (15%), Japan (13%), (see report for further market segment breakdown).

 

The Photonics industry has proved to be one of Europe’s most resilient and fast-growing industries in recent years growing at more than double the rate of global GDP outperforming other market sectors segments according to the new ‘Market Research Study – Photonics 2020’ by deep technology research group Tematys. Covering the period from 2015-2019, the industry grew at a CAGR of 7% per year and was worth €103 billion.

 

An additional 30,000 jobs, taking the total employee level to over 390,000 employees during this time, represented an annual growth rate of 2.1% – twice as fast as European Manufacturing for the EU28 (around a 1% CAGR), the analyst said. Revenue growth for this same period in Europe (7% per year) was three times that of the entire European GDP (2.3%/year) and almost five times the growth of the European industrial production (1.5%/year).

 

Industry

The number of companies and countries involved in photonics components production is growing. In 2018 SPIE tracked 4,298 companies in 53 countries making and selling core photonics components, up 58% since 2012 and in seven more countries. The top countries for 2018 in terms of number of companies include China, USA, Germany, and Japan, with USA and China accounting for more than half of all firms producing photonics components.

 

Global annual revenues from production of optics and photonics core components amounted to $282 billion in 2018. Production of optics and photonics core components is a global enterprise spanning more than 50 countries. Nearly 4,300 manufacturing companies produced core components in 2018:
• 75% of them are small- to medium-size enterprises (SMEs).
• 73% of all core optics and photonics components revenues are generated by only 2% of the companies.

 

In terms of revenue generation for 2018, however, the top countries include Japan, USA, China, and South Korea, respectively. The predominance of large photonics components manufacturers headquartered in Japan—such as Canon, Nikon, and Sharp—means that Japan’s share of the total photonics components revenues is very high. Together, USA and Japan account for more than 60% of the total global components revenues.

 

The photonics market is highly fragmented and the major players have used various strategies, such as expansions, new product launches, partnerships, agreements, joint ventures, and acquisitions, among others, to increase their footprints in this market.

 

In Mar 2019,  Luna Innovations Incorporated announced that it has acquired General Photonics Corporation, a Chino, California-based leading provider of innovative components, modules, and test equipment that focus on the generation, measurement, and control of polarized light critical in fiber-optic-based applications. It brings a highly complementary product portfolio to the capabilities of Luna’s communications test products.

 

The key companies  are Signify (The Netherlands), Shin-Etsu Chemical Company (Japan), Nikon Corporation (Japan), SCHOTT (Germany), Hoya (Japan), CARL ZEISS AG, Corning (U.S), American Elements (U.S), Ohara (Japan), Asahi Glass, II-VI (U.S),  Hamamatsu Photonics KK, Intel Corporation, Alcatel-Lucent SA, TRUMPF (Ditzingen, Germany), Hamamatsu Photonics K.K. (Hamamatsu-city, Japan), IPG Photonics Corporation (Massachusetts, U.S.), Molex (Illinois, U.S.), Innolume (Dortmund, Germany), II-VI Incorporated (Pennsylvania, U.S.), NeoPhotonics Corporation (California, U.S.), One Silicon Chip Photonics Inc. (Montreal, Canada), NKT Photonics A/S (Birkerød, Denmark), AIO CORE (Tokyo, Japan), SICOYA GMBH (Berlin, Germany), RANOVUS (Ontario, Canada)

 

 

 

References and Resources also include:

http://spie.org/x2412.xml

https://www.labmate-online.com/news/news-and-views/5/tematys/the-technology-and-science-of-light-how-fast-is-the-european-photonics-industry-growing/55482

About Rajesh Uppal

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