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10 Dec 2024
Analysts at Yole Intelligence see telecoms and automotive lidar applications in China growing fastest.
The global market for semiconductor lasers is poised to rise strongly over the next five years, growing from approximately $3 billion in 2023 to $5.3 billion by 2029.
That’s according to a new report from the French market consultancy Yole Intelligence, whose analysts expect applications in telecoms infrastructure and automotive lidar - the latter especially in China - to drive the expansion.
AI data demands
Entitled “Illuminating the future: semiconductor lasers driving innovation”, the report suggests that communications-related deployments will account for nearly half of the global market, or $2.56 billion, in 2029.
That is thanks to a predicted compound annual growth rate (CAGR) of 18 per cent for the 2023-2029 period, with the current boom in demand for high-speed links in artificial intelligence (AI) data centers and long-distance submarine links among the key factors.
The rapid rate of growth will see telecoms and infrastructure take over from the consumer sector as the largest single application area, with the market value of consumer applications virtually flatlining over the same period.
While consumer deployments - for example inside smart phones for face-scanning security - will remain the second-largest group of applications, they will grow only slightly, from $1.62 billion in 2023 to $1.75 billion in 2029.
Fragmented sector
Industrial applications, including high-power sources driven by semiconductor lasers in either fiber-based or direct-diode configurations, represent the next-largest market. The Yole team reckons that it is set to grow at a CAGR of 4 per cent, and to reach $471 million in 2029.
Starting from a much smaller base, the “automotive and mobility” market will see the fastest rate of expansion, jumping from just $32 million in 2023 to $191 million in 2029, equivalent to a CAGR of 35 per cent.
Yole’s analysts point out that the overall market ecosystem remains highly diversified and fragmented, with very different commercial priorities and technological requirements for lasers used in different market sectors.
“Trends such as the expansion of applications using lasers, the shift toward energy efficiency, compact size and precision, and the growth in integration with multiple technology platforms including silicon-on-insulator (SOI), silicon nitride , indium phosphide, and thin-film lithium niobate (TFLN) are shaping the future of the semiconductor laser market,” they stated.
This year has seen two TFLN-focused startup companies - Zurich-based Lightium and the Harvard University spin-out HyperLight - raise venture funding, with the technology likely to be aimed at photonic integrated circuit (PIC) designs for even higher-speed links in future AI data centers.
Lidar in China
Ali Jaffal, Yole’s senior analyst for compound semiconductors - the basic light-emitting materials that form the basis for most laser chips - suggests that the slowdown in the consumer segment is due to recent changes in requirements for optical sensing applications.
In stark contrast, Jaffal expects to see a significant expansion in the use of similar semiconductor lasers in automotive applications, which he says will be mainly driven by lidar deployments in China.
Although dozens of companies located in the US and Europe have developed automotive lidar technology, they are generally yet to see sales take off while Chinese providers like Hesai and RoboSense have emerged as market leaders.
Hesai’s most recent sales figures suggest that it is on course to ship close to half a million sensors this year, and the company has predicted that it will become the first automotive lidar firm to turn a profit in the closing quarter of 2024.
The company has recently signed major supply deals with key domestic auto makers Great Wall and Changan, as vehicle production in China grows at the apparent expense of many Western car firms.
• For more details on Yole’s semiconductor laser report, click here. Attendees at next month’s SPIE Photonics West event will be able to hear from Jaffal, plus Yole analysts Axel Clouet and Martin Vallo. They are scheduled to discuss trends in the machine vision industry on the Expo Stage at San Francisco’s Moscone Center January 30.
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