Looking back to Photonics West at the beginning of this year, the mood appeared to be generally buoyant, and the outlook largely positive. Now, nearly 12 months on, how does the industry feel the next year will pan out?
In the UK, laser system integrators seem to have been having a tough time of late, with a couple of high-profile company closures in this area (Exitech, for example). There’s no clear indication as to why this might be, other than the fact that there is a high UK cost base for such integrators. As a result, a lot of manufacturing and assembly is being outsourced to the Far East, as this may be down to the comparatively high labour costs here in the UK. Accent Optical Technologies, for example, recently announced that it was moving its manufacturing base from York in the UK to the Far East.
Douglas Neilson, managing director of Photonic Solutions, is better positioned than most to have an idea of where the UK market in particular might be headed.
‘We import from the US, Europe and, increasingly, the Far East and distribute principally throughout the UK and Ireland,’ says Neilson. ‘Our main markets are the light industrial and scientific sectors, and we are seeing particular growth in the latter. The scientific market is particularly well-funded at the moment, and we are growing at a rate of more than 20 per cent. We believe this rate of growth is primarily due to our investment in technical service and support, which is critical in these markets.
‘In terms of technology, fibre lasers are certainly flavour of the month at the moment. It’s a technology where costs are coming down with volume production. Fibre lasers are rugged, compact and require low maintenance, while offering long operational lifetimes. They are suitable for marking applications, and there is also great potential in replacing traditional lasers in the higher power industrial areas, such as the automotive sector.
‘As far as applications of primarily visible and UV lasers, there has been a lot of interest from the biotech sector, but that is still at the research level at the moment.’
For Edmund Optics, the German market has its own particular strengths, according to Jens Meyer: ‘For us here in Germany, the size of the manufacturing market means that there is strong demand for our vision products. There are many vision applications, such as measurement of apertures or parts, all to do with quality control.
‘We are selling a lot of single components in large quantities to manufacturers of cameras, for example, such as lenses, filters and so on, and this demand is coming from the vision side. We are a relatively young company – we have only been based in Germany for six years – so more and more people are discovering us and the quality and range of product we offer.
‘Geographically, two of the newer countries that have demonstrated significant growth for us are Hungary and Romania.’
Ocean Optics’ Rob Morris also believes that there are new markets opening up all the time: ‘As far as emerging markets are concerned, China is a huge opportunity. We have just set up an office there, but we had seen a significant increase in sales even before then. Other countries showing promise include India and parts of Latin America, particularly Brazil.’
In terms of technology, Morris points to an area we have looked at recently in the pages of Electro Optics. ‘A growth technology area may well be nanophotonics,’ he says. ‘There’s a lot of smoke and no fire at the moment in terms of commercial opportunities, but this is certainly something that might come to the fore within three to five years.’
On a more general note, Morris believes there are reasons to be optimistic, but not overly so. ‘Our main market is the research and development sector, and this has not been growing as dramatically as it was some 12 years ago, when we first started,’ he says. ‘However, within that market, there are still many opportunities there, as well as some emerging applications, such as radiometry, ozone monitoring and wine analysis. With the latter, spectroscopy has begun to emerge as a viable alternative to the previously-used chromatography.
‘Within spectroscopy, there have also been some signs of change. For example, Raman spectroscopy is gaining some leverage as a viable technique, as is laser-induced breakdown spectroscopy, although the latter is still relatively new as far as commercial markets are concerned.’
One manufacturer that has made a significant shift towards industrial lasers is Bookham, and Steve Turley echoes Douglas Neilson’s view that fibre lasers are becoming increasingly popular. ‘We see a continuing trend toward fibre lasers, with a lot of our customers moving to volume production in 2007,’ he says. ‘There’s a lot of momentum there. There’s also a trend for greater use of direct diodes, particularly in the 9xx wavelength range, as it is more suitable for higher power. More suppliers are opting for gold tin soldering, which is more stable at higher powers and where we have extensive experience over many years.’
Turley also believes there is a mass acceptance application just over the horizon.‘An interesting emerging application is that of laser TVs,’ he says. ‘Traditionally, rear projection TVs use a white light source and colour filter wheel. These are starting to be replaced by LEDs, which offer better efficiency, but there is now work going on which may see lasers as the light source. Such a move could reignite the rear projection TV market, as lasers would improve colour quality, reduce warm-up times to zero (instant on), improve reliability and make the TV sets thinner and more efficient.’
Bookham, of course, also made a major commitment to the Far East earlier this year when it opened its new facility in China. ‘Geographically, we now have more people working at our Shenzen facility in China than the rest of our Bookham facilities put together,’ concludes Turley. ‘That’s mainly because of the cost advantages of carrying out assembly out there, but there is a substantial market out there for us too.’
For some companies, the market has changed for altogether different reasons, as Pierre Potet of Cedip Infrared Systems says: ‘For us, the market is growing a great deal, especially in our area of expertise, which is security and surveillance. The current global terrorism threat means that we are getting a lot of business from airports and other similar facilities. Our defence products are also attracting a lot of interest, such as our long range cameras, which are being employed in the Middle East.’
Potet also has many customers in other areas. ‘On the instrumentation side, we are seeing some growth in R&D and process control,’ he says. ‘But we see a clear distinction between customers wanting low-end equipment and those wanting the high performance, high-end equipment that we provide.
‘In thermal imaging, there is still no “killer” application. There is plenty of niche interest, but it’s possible that there may soon be mass acceptance of the concept through driver-aiding thermal imaging.
‘Geographically, most of our business is in Europe and the US, though we are seeing growth in Asia, and in particular in Japan.’
