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29 May 2025
'Investor Day' presentations highlight market opportunities in both data centers and industrial laser applications.
Coherent’s executive team has detailed its business strategy for the coming years, with a focus on communications and industrial photonics applications expected to generate annual sales growth of between 10 and 15 per cent from now until 2030.
In a series of investor presentations hosted by the firm at the New York Stock Exchange, CEO Jim Anderson and his colleagues outlined the vast array of optics and photonics technologies at their disposal, and how Coherent stands to benefit as that technology is deployed ever more widely.
Although efforts to streamline the business are ongoing, Anderson highlighted some changes already made - for example shifting research spending to better match more profitable product areas - as the firm looks to improve margins and reduce debt taken on to finance the near-$7 billion merger of II-VI with “classic” Coherent three years ago.
Among the near-term developments covered were the first sales revenues to be generated by Coherent’s novel optical circuit switches for data centers, and a new industrial laser system aimed at speeding production of large microLED-based displays.
Liquid-crystal circuit switch
Sales revenues in the current fiscal year, running until the end of June, are now expected to be in the region of $5.8 billion, up 22 per cent year-on-year and with that rate of growth fueled almost entirely by accelerating demand for pluggable optical transceivers being used in AI data centers.
Anderson and Coherent CTO Julie Sheridan, who heads up the firm’s data center and communications business unit, anticipate further rapid growth in data center applications, with current transceiver demand set to be complemented by new offerings in co-packaged optics (CPO) and optical circuit switches.
Sheridan showed figures from analyst firm Lightcounting suggesting that the market for optical interconnects in data centers would rise from around $10 billion in 2024 to $30 billion in 2030.
That 2030 total is expected to be generated by a $25 billion market for pluggable transceivers, plus a $5 billion market for CPO technology - an area where Coherent is already collaborating with Nvidia, among others.
Further significant sales growth in the data center is expected to come from demand for optical circuit switches, where Coherent has developed a new approach based on digital liquid crystal switching instead of conventional MEMS designs, and has just sold its first commercial switch.
Sheridan explained that while either type of optical circuit switch offers major power consumption savings compared with today’s electronic switches - a key consideration for data center operators - the liquid crystal system from Coherent would be inherently more reliable than moving MEMS devices.
MicroLED system launch
Covering the industrial side of business, executive VP Chris Dorman highlighted the strategic thinking behind Coherent’s offering of five different types of laser source, namely excimer, ion, solid-state, fiber, and carbon dioxide.
All of those laser types are used across major application areas like semiconductor wafer inspection, car production, medical instrumentation, and smart phone manufacturing, with Dorman noting recent product launches including kilowatt-scale fiber lasers and the firm's 920 nm “Axon” femtosecond laser for neural mapping.
Displays is also a major application area for Coherent, and Dorman revealed that the company was about to launch a new laser system aimed at the emerging area of microLED televisions.
Referred to as “UVtransfer”, the new tool is described as “the world’s first high-throughput turnkey system for microLED production”, and said to be compatible with transferring more than 50,000 microLEDs every second.
That kind of speed would in principle reduce the time currently taken to transfer the millions of microLEDs that make up a TV screen during production from hours to minutes, with the tool due to launch before the end of June - likely at the forthcoming LASER World of Photonics event in Munich, Germany.
Wrapping up the investor day Anderson once again highlighted the company’s sheer breadth and depth of photonics expertise, saying:
“Photonics is becoming so much more important for so many applications. And there really isn't another company out there that’s better positioned to benefit from that.”
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