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09 Jun 2008
Ultrafast lasers are more robust and affordable than ever before. That's the upbeat message from Strategies Unlimited as it publishes its first insight into the ultrafast market.
The ultrafast laser market will reach about $260 million in 2008, with healthy growth expected through to 2012 according to analyst Strategies Unlimited. Jacqueline Hewett speaks to Tom Hausken about applications, technologies and the ever-increasing number of players in the market.
JH: How does the growth you are predicting through to 2012 compare with previous years?
TH: This is the first time that we have focused on ultrafast, so we don't have specific numbers for years past. But, for the most part, ultrafast lasers have been at the R&D fringe of the laser market for many years. That means it mostly grows with R&D budgets, i.e. relatively slowly. We see growth in the various applications ranging from flat or even declining to as much as 30% AGR through the period.
Do you expect any new applications or technologies to emerge?
“The need for an ultrafast solution for many applications is becoming more compelling than before.”
Many new materials processing applications are showing promise. Another interesting area is the use of ultrafast in corneal incisions and refractive surgery. I don't like to emphasize these segments, though, because it takes away from understanding how the ultrafast market works. It's really about finding a niche and developing it. For example, Menlo Systems has expertise in frequency combs, TOPTICA Photonics in terahertz generation, IMRA has been working with Carl Zeiss Meditec on ophthalmology, KMLabs has expertise in x-ray generation. The list goes on.
Ultrafast is one solution, and it competes against other pulsed, continuous wave, or non-laser solutions. What is exciting is that ultrafast is more robust and affordable than before, and that the need for an ultrafast solution for many applications is becoming more compelling than before.
That said, within ultrafast there are many interesting products on the market that are using fibre, thin-disk, and other solid-state innovations. Note that I don't say "fibre laser" because the fibre may be used as the seed oscillator, as the amplifier, or as both.
How does the ultrafast market sustain such a large number of players?
There are now 38 companies offering an ultrafast laser product. In my opinion, that's a bit too many, especially when you consider that Coherent and Newport have the dominant market shares today. It is a lot more than I expected when we started looking into this project, but a lot of companies survive by serving a niche and with very tight financing. Many of them do this by offering ultrafast as an extension of their other pulsed laser products. What is surprising is how many of these little companies have been around for many years. Only a very few can be considered start-up companies entirely focused on ultrafast.
Do you expect to see new entrants and what do they have to do to survive?
When it comes to the laser business, you always see new entrants, but the venture-funded start-up is a very tough way to go, because the application development is so slow. The supplier must find a customer to design the laser into a system, and then the system has to be sold to end users. In between, there may be regulatory hurdles and extensive qualifications. It's easier to do if the laser supplier has a tight budget, lots of patience and maybe some other products already selling.
Do you expect to see any consolidation?
"Consolidation" is not the word that comes to my mind, at least not in the sense of a significant reduction in the number of suppliers. There are no strong economies of scale in the ultrafast business that would force that. The intellectual property is critical, though, so there certainly will be some licensing and even acquisitions to get access to that. I don't consider that consolidation - that is just the usual business of horse trading.
Do you expect to see an increase in the number of lasers sold and a decrease in the price tag as time progresses?
There certainly will be growth in unit sales and declining prices, but it's hard to summarize the pricing. First, this is a highly customized business, so there aren't standards or commodity pricing. Ultrafast will always be at the expensive end of the market. They make for very nice tools, but they aren't for everything. This is a good thing as it keeps margins high and it would be a shame for that to change. It also makes it difficult to say what the "average" price is.
Second, the product mix changes over time, and the average price over the mix has a different behavior from that of specific products. Currency exchange rates also change prices.
Are any geographical regions predicted to see growth?
There is growth in the supply and growth in the demand. For the most part, demand is globalized. For example, farm machinery destined for South America may be made in North America, using parts or machine tools from Europe. With the current exchange rates, some of that balance is changed, but it is still globalized.
The supply of ultrafast lasers is regionalized, though. There are concentrations in North America (mainly in the Bay area) and in Europe, especially the central European area of south Germany, Austria, Switzerland, and alpine France. There is very little in Japan and East Asia. Customer support is very important in the ultrafast laser business, and it is hard for small suppliers to support customers in far off continents. So that does raise a question about who will serve Asia as the market expands.
Author
Jacqueline Hewett is editor of Optics & Laser Europe magazine.
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