Vertical-cavity surface-emitting lasers 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 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.
The limited data transmission range associated with vertical-cavity surface-emitting lasers are major factors restraining the market progression. 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 players to opt for silicon photonics technology over Gallium Arsenide (GaAs) and Gallium Nitride (GaN) based vertical-cavity surface-emitting lasers.
Rising demand for single-mode VCSEL in medical applications will spur the market value
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The single-mode segment held 35% of the vertical-cavity surface-emitting lasers market share in 2020 and is anticipated to witness 17% growth rate till 2027. Growth is attributed to 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 increasing 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 the revenue share in 2020 impelled by the 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 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), COVID-19 Impact Analysis, Regional Outlook, Growth Potential, Price Trends, 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 propel the market demand
The 940 – 1,050 nm segment captured 20% of revenue share in 2020 and will grow at a CAGR of over 18.5% through 2027. Increasing usage of 940 - 1,050 nm wavelength range for biometric, facial recognition, and 3D sensing applications will drive the industry progression. 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 to stimulate the market revenue
The data communication application segment is poised to expand at 20% CAGR by 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 coming years.
Increasing investments of telecom service providers to establish 5G communication network will increase their market position
The IT & telecom segment is estimated to register growth of19% during 2021 to 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 market expansion. 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 region
Asia Pacific vertical-cavity surface-emitting lasers market is predicted to grow at a CAGR of over 20% through 2027 due to the 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 fostering emerging AI and machine learning technologies, addressing new growth opportunities for the market.
Key players operating in the 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. These leaders are extensively focusing on inorganic growth strategies to stay competitive in the market.