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Rofin rides downturn and looks to the East

28 Aug 2002

Industrial-laser manufacturer Rofin-Sinar seems to be surviving the recession better than most multinationals. Phillip Hill asks its CEO, Peter Wirth, where the company is headed.

From Opto & Laser Europe September 2002

Rofin-Sinar was formed in 1996 as a spin-out from Siemens. With headquarters in Plymouth, Michigan, US, and Hamburg, Germany, the industrial-laser manufacturer lists its shares on both the high-tech NASDAQ index in New York and the German stock exchange.

The company makes high-power carbon dioxide (CO2) and Nd:YAG lasers for materials processing applications. These fall into three main categories, which it calls "the three M's": large-scale cutting and welding (macro); small-scale applications for the electronics industry (micro); and marking.

Why is the macro business doing so well at the moment?
We are gaining market share with our diffusion-cooled CO2 slab technology. This - together with diode-pumped solid-state lasers - is the star product at the moment. It is a special type of CO2 laser, which does not need any gas circulation and has an excellent mode structure. It is used for high-speed cutting and very narrow welds.

What is the next big application area?
I believe it will be remote welding. You use a high-power laser in the range of 3-5 kW, a long focal-length lens or optics to focus between 1 and 1.6 m, and a mirror that directs the beam towards where you want to weld. You can move very fast from spot to spot just by changing the angle of the mirror. The cycle time is much faster than a conventional robot resistance spot welder, which has to move the welding gun from point to point. We can be 3-4 times faster in the total cycle time.

Why is the micro sector faring worse than the macro at present?
This is not the case. It is true that the combined marking and micro businesses have been reduced because of low sales for marking lasers in semiconductor manufacture, but the micro business itself is experiencing two-digit growth. This includes fine cutting of medical equipment, spot welding of jewellery and dental applications - these areas are all really growing.

Which is the biggest growing market - Europe or the US?
For us I think the answer is both - we are growing in the US, against the trend, and we are also growing in Europe. The only area where we see a reduction is in marking in the semiconductor business in Asia - there we have really seen a steep reduction.

Is Europe's laser market saturated?
No, it is growing. Our [sales] split is about 30% in the US, 55% in Europe and 15% in Asia. This does not mean, of course, that the lasers finally end up in these zones, because we have a lot of OEM customers in Europe who then export to other countries.

Why did you recently decide to set up a subsidiary in Taiwan?
I think that selling laser sources to end users through representatives is very difficult. We wanted to use our own guy. It started as a sales office and now the business is growing. Taiwan will take care of sales and service and importing spare parts for both Taiwan and China.

What do you estimate the Chinese market to be worth?
It will grow to about $10-20 m next year in Taiwan and China. In five years I expect two-digit growth in China. Taiwan is like a bridge into China, and we see a lot of business relationships between Taiwanese and Chinese companies. Then there are the US and European automotive and semiconductor companies that have started production [in China], so these are two areas into which we can sell. In the long term, China will become the bigger market, but initially it will be a 50:50 split with Taiwan.

Which products do you think will do best in China?
Marking lasers for semiconductors, PCBs and keypads on mobile telephones. We also sell a lot of our diffusion-cooled CO2 slab lasers for cutting and welding applications. In the future we hope to increase our micro business there for fine cutting and fine spot-welding.

Is Europe trailing behind the US in laser applications?
Europe is ahead of the US in most applications - especially in the macro area - because we have a stronger machine-tool industry in general in Europe. We have a more innovative automotive industry, which drives laser use. Maybe it is because our quantities are smaller and we need more flexible production lines, where every part or every car or every colour is different from the next one. A typical example is laser marking in the auto industry. This has really penetrated Europe, but in the US it is just starting. The same is true for remote welding - it will first take off in Europe and maybe even in Japan before it goes to the US.

What are the other technological developments coming through?
We are working on thin-disc lasers, which have some interesting features - excellent mode structures, for example. I think this is the technology that will appear in the next two or three years. At the moment, the applications are in engraving - where you need a good mode structure as well as small spot size. We are also looking at frequency-doubled or frequency-tripled diode-pumped solid-state lasers and fibre lasers.

Will diode lasers usurp solid-state and gas lasers in materials processing?
No, I don't see that at all. Diode lasers have a much larger spot, so you cannot use them for cutting or fine welding. Of course, they have other advantages: they are very small, compact, very efficient. We are selling them for new applications like surface treatment, surface hardening, brazing and, at lower power, for welding plastic and very thin metal. I don't see them taking business away from our existing CO2 and solid-state lasers - they are complementary.

Is industrial laser technology now a mature business?
I think there is still [a lot of] development to do. It is not a business in a steady state like some machine-tool applications, where you have only minor improvements. In the future we will go on to higher powers, shorter wavelengths, shorter pulses. There may be new applications in picosecond and femtosecond technology.

Are there too many laser makers?
There are always too many, you know. There has been consolidation and there will continue to be consolidation.

Will Rofin be taking over any smaller firms in the future?
We have done that in the past. We have a history of buying companies, integrating them, increasing our product portfolio, and increasing our application coverage.

Rofin-Sinar: the facts
Last year Rofin-Sinar made sales of $220.6 m (€ 219.1 m), a revenue increase of 28.9% from 2000. The US and German markets account for approximately 80% of total sales. The company's main customers are automotive, machine tool and semiconductor chip manufacturers, as well as makers of electronics, aerospace equipment, consumer goods and medical devices. The company has more than 14,000 units installed worldwide and its many subsidiaries have plants in the US, Asia and Europe. In a bid to further exploit the Asian market, Rofin has recently established a subsidiary business in Taiwan.

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