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09 Apr 2025
Coherent, Lumentum, MKS Instruments and IPG Photonics down 20% or more in week after 'reciprocal' tariff announcement.
The stock prices of some of the world’s largest photonics companies are among those hardest hit following a tumultuous week of trading in response to new US trade tariffs that have just gone into effect. **see update at foot of article**
As an example, prior to the start of trading on April 9 MKS Instruments had dropped in value by 27 per cent over the past five days. That compares with falls of around 12 per cent for both the Nasdaq Composite and S&P 500 indices.
Over the same period Lumentum and fiber laser firm IPG Photonics each declined by 21 per cent, with the highly diversified Coherent down 19 per cent.
The recent losses have compounded a general decline in valuations since the start of 2025 as the potential for widespread tariff actions became more evident.
Global production footprints
Coherent, which manufactures a broad range of photonic components and products in multiple global locations, has fared the worst over that time period, for which it is down 46 per cent.
While the laser, networking, and materials firm has a large number of manufacturing sites in the US, its most recent annual report also lists production and research facilities in Australia, China, Finland, Germany, India, Malaysia, Philippines, Singapore, Korea, Spain, Sweden, Switzerland, Thailand, the UK, and Vietnam.
MKS Instruments, whose business is largely geared towards semiconductor and PCB manufacturing using a broad portfolio of products - many of which incorporate lasers and other photonic elements - is down 44 per cent since January 1.
Like Coherent, it operates a number of US facilities, but also lists production sites in Austria, Brazil, Canada, China, Czech Republic, France, Germany, India, Israel, Italy, Japan, Malaysia, Mexico, Romania, Singapore, Slovenia, Korea, and Taiwan.
Lumentum’s business is weighted towards optical networking and the company has, like Coherent, benefited from the massive recent investment in high-speed transceivers for data centers.
But its stock price is now down 40 per cent since the start of the year. Lumentum produces key components in Japan, Thailand, and the UK, and - like its peers - also uses contract manufacturers often based in south-east Asia.
One of those contract manufacturers is Thailand-based Fabrinet, whose stock has dropped 12 per cent over the past week and is down 19 per cent since the start of 2025.
Complex supply chains
IPG Photonics, which in recent years has retreated from Russia and increased production at sites within the European Union, is down 32 per cent since the start of the year.
Other public companies in the photonics ecosystem have felt a similar impact, with laser firm nLight down 18 per cent in the past week and 37 per cent since January 1. Machine vision specialist Cognex has dropped 22 per cent in the past week and is down 35 per cent since the start of the year.
Among the larger industrial companies whose business is partially related to optics and photonics technologies, glass and optical fiber giant Corning is down 14 per cent over the past week and 17 per cent since the start of the year.
ASML, whose lithography equipment relies on a highly complex supply chain integrating lasers and optics with thousands of other parts, had already dropped in value significantly since last year. In the past week it has fallen by another 11 per cent, and is now down 14 per cent since the start of the year.
None of the companies mentioned has commented publicly on the impact that the new tariffs will have on their businesses, although ASML is due to update investors with its quarterly results announcement next week. Executives from the other photonics companies are set to follow with their own results towards the end of April and start of May.
One company to have fared less badly over the past week is the photovoltaics firm First Solar. It is “only” down 6 per cent in the past week but has dropped 32 per cent since January 1.
While the vast majority of silicon solar production takes place in China, First Solar manufactures a large proportion of its proprietary cadmium telluride modules in the US but also has production sites in Malaysia, Vietnam, and India.
**update (April 10th)** Following the April 9 announcement that higher tariff rates on US imports would be paused for 90 days (except in the case of China), stock prices rebounded across the board. The table to the left shows the impact of that reversal on the same selected photonics stocks on April 9.
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