VCSEL Market size worth over $5bn by 2027
Published Date: February 1, 2021 Authors: Preeti Wadhwani, Shubhangi Yadav
Vertical-cavity surface-emitting lasers (VCSEL) Market size is set to surpass USD 5 billion by 2027, according to a new research report by Global Market Insights, Inc.
The proliferation of ADAS and self-driving technologies across developed economies will boost the VCSEL market growth during the forecast timeline. The vertical-cavity surface-emitting laser components are integrated into automotive LiDAR systems for 3D mapping of objects and surroundings, increasing their applications in driver-assistance systems and self-driving cars. VCSEL offers several intuitive features such as high resistance to ambient light, faster scanning, and highly efficient scanning compared to its counterpart technologies such as Radar and Sonar technologies.
Several automotive OEMs including Tesla, Inc., General Motors, Daimler AG, Great Wall Motors, etc., are focusing on integrating LiDAR-based systems in their upcoming driverless cars, creating high growth opportunities for the market. In August 2020, Ibeo Automotive Systems GmbH entered into a strategic contract with Great Wall Motors to provide vertical-cavity surface-emitting laser components for its upcoming level-3 autonomous vehicles product lines. The Great Wall Motors will be focusing on the volume production of level-3 autonomous driving cars by 2022.
The limited data transmission range associated with vertical-cavity surface-emitting lasers are major factors restraining the VCSEL market expansion. VCSEL components offer limited modulation performance and large frequency chirp that limit fiber transmission speed and distance. Furthermore, the continuously rising demand for high-speed networks across the telecommunication sector has encouraged market leaders to opt for silicon photonics technology over Gallium Arsenide (GaAs) and Gallium Nitride (GaN) based vertical-cavity surface-emitting lasers. This will further restrict the industry growth to some extent over the forecast timeline.
Rising demand for single-mode VCSEL in medical applications will spur the market value
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The single-mode segment held a vertical-cavity surface-emitting lasers market share of 35% in 2020 and is anticipated to witness 17% growth rate till 2027 led by several features offered by the single-mode architecture such as high stability, low numerical aperture, smaller spot size, and narrow linewidth. Single-mode VCSELs are suitable for transmitting data over both few-mode and multi-mode fibers with high image range, transfer speed, and accuracy. These features increase their application in medical diagnostics and therapeutics devices & applications. The growing effort of market leaders to enhance device tunability and energy efficiency is creating high growth opportunities for the single-mode segment.
Increasing adoption of Indium Phosphide (InP) material by foundry players to manufacture high-end VCSEL
The Indium Phosphide (InP) segment accounted for 20% of revenue share in 2020 impelled by several features offered by the material such as low-distortion and high-performance with cost efficiency during fabrication of components. Due to these features, foundry participants are emphasizing on the acceptance of Indium Phosphide (InP) material in the manufacturing of vertical-cavity surface-emitting lasers.
Browse key industry insights spread across 170 pages with 551 market data tables and 27 figures & charts from the report, “Vertical-Cavity Surface-Emitting Lasers (VCSEL) Market Size, By Type (Single Mode, Multi-Mode), By Material Type (Gallium Arsenide (GaAs), Indium Phosphide (InP), Gallium Nitride), By Wavelength (< 850 nm, 850 - 940 nm, 940 - 1,050 nm, > 1,050 nm), By Application (Sensing, Data Communication, Industrial Heating & Laser Printing), By Industry Verticals (Consumer Electronics, IT & Telecom, Automotive, Industrial, Healthcare, Aerospace & Defense), Industry Analysis Report, Regional Outlook, Application Potential, Competitive Market Share & Forecast, 2021 - 2027” in detail along with the table of contents:
Growing uptake of 940 – 1,050 nm VCSELs for biometric and facial recognition applications to foster the market demand
The 940 – 1,050 nm segment held 20% of the vertical-cavity surface-emitting lasers market share in 2020 and will grow at a CAGR of 18.5% till 2027 propelled by the increasing usage of 940 - 1,050 nm wavelength range for biometric, facial recognition, and 3D sensing applications. The 940 - 1,050 nm wavelength is highly suitable for facial recognition applications owing to its high immunity to background ambient sunlight cutting-edge image processing.
Rising integration of VCSELs in collocation data centers will accelerate the market revenue
The VCSEL market for data communication application is estimated to attain a CAGR of 20% during 2021 to 2027. Growing demand for high-speed data transmission with large bandwidth over the Internet will increase the adoption of vertical-cavity surface-emitting lasers in data communication applications. The vertical-cavity surface-emitting laser increases the bandwidth capacity with high energy efficiency, helping network service providers with long-range transmission and communication. The ability to handle large-scale data with high security and scalability will further increase the acceptance of vertical-cavity surface-emitting lasers in colocation datacenters over the forecast period.
Increasing investments of telecom service providers to establish 5G communication network will increase their market position
The IT & telecom segment in the VCSEL market will observe substantial growth rate of 19% till 2027 on account of the rising usage of vertical-cavity surface-emitting lasers in 5G infrastructure and communication equipment. The proliferation of 5G communications across developed economies including Germany, Italy, Spain, the UK, the U.S., and China will add new opportunities for the market growth. According to the European 5G Observatory, as of September 2020, 18 countries in EU-27 & the UK have successfully commercialized 5G services in the region. The rapid deployment of 5G technology will push telecom operators in the telecom industry to deploy VCSEL-based devices such as active optical fibers, cabling networks, and base-station equipment, among others, fueling the industry growth.
Favorable government initiatives to accelerate manufacturing sector in APAC will boost the regional growth
The Asia Pacific VCSEL market is poised to expand at more than 20% through 2027 due to favorable government initiatives supporting consumer electronics manufacturing in the region. For instance, in September 2020, the Government of Japan announced a USD 221 million incentive scheme to support consumer electronics manufacturers to shift their manufacturing bases from China to other Asian countries. This scheme will help Japanese consumer electronics manufacturers to re-establish the supply chain of raw materials & components and showcase less dependency on a particular region. Regional governments are also focusing on boosting emerging AI and machine learning technologies, addressing new growth opportunities for the market.
Key companies operating in the VCSEL market include II-VI Incorporated, Lumentum Operations LLC, ams AG, TRUMPF, Broadcom, VERTILAS GmbH, TT Electronics, OSRAM Opto Semiconductors GmbH, and Leonardo Electronics US, Inc., among others. These players are extensively focusing on inorganic growth strategies to stay competitive in the market.