Organizers of Invest in Photonics 2012, a two-day international convention on photonics venture capital (VC) investment, said that participation at last month’s event increased “despite a tough investment decade in photonics”.
The gathering in Bordeaux, France (host of the Laser Megajoule and a region recognized as a center for photonics) attracted a mix of industry leaders, investors, photonics specialists, market analysts and trade representatives from across Europe, the USA and Asia. They met with 19 key companies selected for the special funding session, raising attendance to 150 (up 20% on the previous event in 2010). Total funding targeted by selected companies also increased to €72m ($90m), more than doubling earlier funding targets.
Invest in Photonics is co-organized by the Bordeaux Chamber of Commerce, ALPhA (Aquitaine Laser Photonics and Applications) technology cluster and CEA, the largest government-funded technological research organization in France.
The photonics market is estimated to be worth €300bn ($395bn) and is expected to reach €480bn ($632bn) by 2015, according to SPIE, the international society for optics and photonics. The photonics industry now supports 1.7 million jobs. The market in Europe, consisting of about 5000 small- and medium-sized enterprises (SMEs) and 1000 research institutes, is estimated to be €60bn. In Europe, Germany leads the pack with 20% of the market, followed by France and the UK with 14% each, according to European industry group Photonics 21.
“Invest in Photonics is the only venue that informs VCs about future applications in photonics, which we back by providing them with market data from diverse economic sectors,” commented Invest in Photonics chairman Giorgio Anania, chairman of Cube Optics’ board and former CEO of Bookham (now Oclaro). “The photonics industry will have a major impact on a range of industries. We bring the key players together to help make this happen.”
Growth areas
At the conference, analysts and speakers from leading companies focused on three high-growth markets: consumer goods, clean-tech and healthcare, plus the evergreen hot topic of Asia. Subjects covered included: early diagnosis of diseases through new detection methods, communication and data infrastructure in the 21st century, consumer devices, LED lighting, lasers, advanced displays and sensors, 3D IC packaging, micro-fabrication of glass and PCBs, and solar energy.
“Photonics is ubiquitous yet often invisible,” Steve Anderson, industry and market analyst for SPIE, told the delegates. “It is a light-based enabling technology that underpins just about everything from consumer devices to clean-tech and from communications to life sciences,” he added.
“Smartphones, for example, are made using 13 different laser-based systems; they contain diverse photonics components and are enabled using fiber-optic technology. A significant number of commercially successful companies that rely on photonics technology do not associate themselves with the photonics industry,” he added.
Fiber lasers
Several delegates spoke about the market for lasers which, according to Anderson, continues to exhibit strong growth for certain types of products, in particular fiber lasers. These are being adopted faster than any other laser technology in history. For directed energy, lasers allow processing by the single unit (versus batch), enabling customization or adaptation to upstream process changes.
Furthermore lasers enable the processing of challenging materials such as glass, ceramics, plastics, metals and alloys. For green processes, laser ablation is a dry process that avoids the use and need for disposal of dangerous chemicals that would be required for wet/dry etching. For applications like marking and scribing, the key components do not even require cleaning, which would otherwise waste water or solvents.
LEDs dominating
Another hot technology highlighted was the LED, especially for lighting. LED technologies currently represent half of the sales involved in backlighting in televisions and mobile devices. A 13% compound annual growth rate is expected over the next two years, from $11.4bn in 2012 to $17bn by 2018, according to Yole Development’s report ‘Status of the LED Industry’.
“The LED is unlike any other lighting technology in history,” said Hans Nikol, vice president LED Innovation and Strategy at Philips Lighting. “Today, every light technology from the candle to fluorescent and halogen co-exists. We strongly believe that LED will wipe out previous existing lighting technologies.”
Another emerging area of interest is integrated photonics – achieving with light what has been previously been done with electronics. “Areas where photonics can provide solutions include the necessity to reduce the power consumption of running and cooling computer servers, as well as routers that are becoming increasingly more power hungry,” noted Carl Zeiss France’s president Pierre Billardon. “Other markets are reducing the cost of healthcare and improving the early detection of debilitating conditions like Alzheimer’s disease.”
Solar power
In terms of opportunities in solar, Raffi Garabedian, chief technology officer at First Solar of Tempe, AZ, USA (which makes cadmium telluride based solar modules), pointed VCs to four areas offering investment potential: incremental technological developments that can improve the dominant platform technologies with minimal factory re-tooling; metrologies for improved quality and process controls in manufacturing; balance of system controls for low-cost power conversion; grid integration and controls; and prediction and forecasting - disruptive new photovoltaic technologies with the promise of low system costs and improved efficiency.
Intune Networks’ chairman Ian Jenks said that, in a world moving to zetabyte communications, photonics will be important in solving problems associated with the need to develop new architectures that will be required to scale virtualized networks economically.
Asian focus
Regarding Asia, analysts acknowledged the lead that many Asian companies have in certain areas of photonics. Lead areas cited in particular were AMO-LED (active-matrix organic light-emitting diode) display technology (where Samsung and LG Display are now well established), followed by several emerging companies from around Asia. China has the top capacity in LED reactors, despite only starting production in 2009. Participants voiced concerns about IP protection.
Nevertheless, following Billardon’s presentation of Zeiss’ successful entry two years ago into fast-growth markets, he said: “China is a great business opportunity. Go there!”
