LASER 2023: Photonics industries in Germany and worldwide ‘growing at 7%’

27 Jun 2023

Industry group Spectaris “cautiously optimistic”, predicting steady growth through 2027, but skills shortage and supply chain problems persist.

by Matthew Peach in Munich

After a double-digit increase in sales in 2022, the signs for German photonics manufacturers continue to point to growth. German industry association Spectaris made its predictions as LASER World of Photonics opened its doors Tuesday at the Munich Fairground.

The analysis is based on a new survey undertaken by the France-based market research company Tematys, whose headline figure for 2023 is that “nominal growth of eight percent is expected in Germany’s photonics sector”.

Jörg Mayer, Managing Director of Spectaris, told the press conference, “The approximately 1,000 companies in the German sector are expected to generate sales of 54 billion euros with their 182,000 employees in the current year. Against the background of the strong price increases, the result is put into perspective slightly, but can still be seen as a success.”

Annual sales growth of around seven percent is expected until 2027. Contributing to this growth, especially the areas in which German photonics is strongly positioned, are optical components and materials, and technologies associated with mobility, Industry 4.0 and health.

The Spectaris report also notes: “Photonics also benefits from their above-average growth rates as a driver of other innovative areas within their application markets, such as quantum technologies or precision agriculture.”

The report also considers the world market for photonics (with the source for this second forecast cited as McKinsey), stating, “The global market for photonics will grow by at least 6 per cent per year nominally until 2025.

“The market for core photonics components, such as LEDs, lasers and sensors, is growing at a rate of 10 per cent per year, faster than the overall market for systems whose functionality is based primarily on photonics,” it added.

Challenges to growth

Mayer also considered challenges that are restraining photonics sector growth. He commented, “The continuing shortage of skilled workers poses an enormous challenge for the industry. Due to the strong development of the industry, there will also be an increasing need for employees in the coming years to be able to fully develop the potential of the photonics market.”

Besides recruitment, tackling supply chain challenges, particularly in the semiconductor space, remains on the agenda for companies. Planned general bans on materials, such as in the case of PFAS high-performance materials, are also causing companies great concern, Mayer added. “Without numerous per- and polyfluoroalkyl substances, essential photonic applications will no longer be possible in the future,” he warned.

Looking at the current year, in particular, Mayer added, “The general economic situation is on shaky ground, forecasts are difficult in this volatile environment. Photonics has in the past though proven several times that it is significantly more resilient than other industries.”

In the subsequent question session, it was put to Mayer that the current difficult China-USA trade relationship has become a problem for German industry [wishing to export to China]. Was Spectaris “lobbying the Federal Government to do something or – as usual – would German industry be sacrificed for politics?” asked one questioner.

Mayer replied, “It’s a huge problem. I had a personal talk last week with the responsible Trade Secretary at the German Ministry for the Economy, who told me that Spectaris is the toughest lobbying organisation in terms of finding a solution for the permits for exports.”

He added, “The problem is huge because some of the companies have been waiting for more than two years. They are losing projects, they are losing clients. Millions of euros are waiting to be turned over and this is an unacceptable situation but it is politics and we are trying to do our best.”