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Coherent senses new opportunity in OLED

08 Feb 2023

Giant laser and photonics company launched a raft of new products at Photonics West; stock set for NYSE switch.

Coherent, the $5 billion-turnover laser and photonics company created by last year’s merger of II-VI and the laser firm of the same name, is to switch its stock listing from the Nasdaq to the New York Stock Exchange (NYSE).

Saying that the move away from the tech-focused Nasdaq better complemented the new Coherent brand and its more industrial scope, CEO Chuck Mattera announced the change as he revealed the firm’s latest quarterly financial results.

“Our company has undergone a tremendous period of transformation, and this move is part of that,” he said, pointing out that II-VI had been trading on the Nasdaq for more than 35 years. The switch should take place February 23.

Diversity matters
Meanwhile, the new Coherent posted sales of $1.37 billion for the final three months of calendar 2022, with the legacy II-VI business up 23 per cent on a like-for-like basis, and the wider company up 15 per cent.

“Our integration activities are progressing very well with increasing momentum and achievements. I am pleased with how our now combined teams are working together,” remarked the CEO, pointing to substantial costs savings already made.

“We are aware of potential deceleration in the world economies and in some pockets of our end markets in the second half of our fiscal year,” he added. “However, our diversification, the strength of our backlog, our product portfolio prospects, and a great team give us confidence in delivering a strong [fiscal year] 2023.”

The highly diverse nature of the company’s business was evident at last week’s SPIE Photonics West show, where Coherent exhibited a raft of new products aimed at numerous different markets and applications.

Mattera highlighted the firm’s new industrial lasers aimed at organic LED (OLED) display production - something that is expected to take off in the next couple of years as the technology migrates to laptop, monitor, and tablet screens that have not used OLEDs widely before.

OLED laser manufacturing advances
At the San Francisco event, which attracted 22,000 attendees, Coherent revealed its new “Python” laser, aimed at so-called “Gen-8” OLED fabs. The solid-state source is set to be deployed in key annealing steps, where the firm currently dominates the market with its giant industrial excimer laser systems.

“This is the culmination of four years of innovation and development that retains Coherent’s position as the annealing process of record while improving performance and cost-per-panel,” said Mattera. “We believe our innovations in this system will drive adoption into more price-sensitive displays such as tablets, laptops, and high-end monitors.”

On top of that system, the company introduced two more lasers for OLED production that each utilize ultrafast pulses, although in different parts of the spectrum.

One is the smallest version so far of the “Monaco” industrial infrared femtosecond source for cutting large OLED display glass up to 2 mm thick, and the other is the new “HyperRapid NXT” picosecond laser emitting at 266 nm for precision ablation.

According to Coherent the proprietary crystals used in the deep-UV picosecond laser, which are grown and coated in-house, enable long-term, 24/7 operation in OLED fabs.

Chris Dorman, senior VP and general manager for Coherent’s solid-state laser business in Europe, points out: “A laser-based process capable of making such fine cuts is not only new, it’s also much simpler, cleaner, and lower-cost than alternatives based on mechanical or chemical processes.

“In fact, we estimate that our new laser could improve the profitability of a consumer product by as much as hundreds of millions of dollars over its lifecycle, easily justifying the investment.”

Communications ‘catalyst’
According to Coherent’s latest financial results, the laser division accounted for sales of $379 million in the latest quarter, down slightly from the prior quarter’s figure.

The firm’s networking business is its largest by some distance, delivering sales of $609 million in the latest period as strong demand for the full range of optical components persists in the communications sector. Its materials business, largely reflecting silicon carbide wafers and devices, posted sales of $382 million.

Mattera pointed out that US legislation in the form of the Infrastructure Investment and Jobs Act should act as a “major catalyst” for further growth in optical communications, with heavy investment in broadband networks across the country anticipated.

Coherent has also just launched its new 50 W pump diodes - believed to be an industry record for power output. Produced on the company’s gallium arsenide technology platform, the emitters are available at 915 nm and 976 nm wavelengths for pumping fiber lasers.

“The output facet width of the laser chips is available from 150 µm to 350 µm, enabling optimal coupling efficiency and output powers for a wide range of fiber laser designs,” explained the firm.

“The chips include Coherent’s proprietary E2 front mirror passivation that prevents catastrophic damage to the laser, even at extremely high output powers.”

Ubiquitous sensing
Looking ahead, Mattera and his executive team expect sales in the March quarter to be flat or slightly down, at somewhere between $1.32 and $1.37 billion, partly due to the usual seasonal slowdown in major consumer electronics markets like 3D sensing.

But Mattera continues to see a major long-term opportunity in sensing applications. “[It’s] not just VCSELs for 3D sensing,” he told an investor conference call discussing the latest results.

“We believe that sensing will become ubiquitous in metaverse hardware and wearables, and [in] lidar and other emerging applications. Our [customer] engagements are growing across them all.”

• Following the latest update, Coherent’s stock price - still on the Nasdaq for now - held steady at around $43.60. That equates to a market capitalization in the region of $6.6 billion.

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