The Vertical Cavity Surface Emitting Laser Market is expected to register a CAGR over 18% over the forecast period from 2021 to 2026. VCSELs are critical components in multiple existing and future 3D sensor systems, using both structured light and time-of-flight (ToF) technologies. Applications range from 3D facial identification (front-facing) systems and world-facing cameras on mobile handsets to light detection and ranging (LiDAR) and in-cabin sensing for autonomous drive vehicles. VCSELs can also become a booming market for optical chip manufacturers. The world’s second-largest lighting company, Osram, is also building up a strong VCSEL portfolio along with its existing LED semiconductors portfolio.
- The growing trend in computer and television displays regarding higher resolution, thinner profiles, and the larger size is also fueling the demand for VCSELs. An increasing number of data centers, mainly driven by the rising cloud computing and 5G wireless communications market, will also offer a massive opportunity to the studied market. To target these specific applications, many global vendors are also innovating products particular to these applications. For instance, US-based II-VI Inc. recently introduced 56 Gbps PAM4 VCSEL arrays for 200 and 400 Gigabit Ethernet short-reach transceivers. - Automotive is another industry, which will offer massive opportunities for VCSEL suppliers.VCSELs are also witnessing adoption among diverse applications as lidar guidance for driverless vehicles, fiberoptic data transmission, and medical imaging. Even if they do not directly replace LED technology across the board, their laser light makes them useful in applications where ordinary LEDs are not. However, the VCSEL production process is more labor and material intensive, which could be a significant restarting factor for the studied market during the forecast period. - In March 2020, Silicon Line GmbH, a provider of ultra-low-power analogue ICs, announced that it had launched the SL82022 and SL82012, an ultra-low-power 12.5 Gbps VCSEL driver and TIA chipset. Implemented in standard CMOS using Silicon Line’s world-leading ultra-low power architectures, the chipset consumes much less than 34 mW at 12.5 Gbps. Even including typical VCSEL modulation currents, an entire optical link based on these ICs would consume less than 50 mW. This corresponds to below four pJ per bit. Silicon Line has an extensive portfolio of leading-edge, ultra-low-power, and costs capable VCSEL drivers and TIAs, including 3 Gbps and 6 Gbps dual, single and quad-channel chipsets. - The COVID-19 pandemic impacts several markets in every segment of the economy, and smartphones are no exception. The smartphone industry, one of the significant adopters of VCSEL technology, has seen production disruptions and substantial changes in usage patterns, as social distancing impacts how much consumers use their phones and what they use them for. The coronavirus pandemic will have a severe effect on the growth of 5G devices, beginning to gain traction in the global market. Delays in manufacturing and reduced demand will set back the development of affordable 5G phones, which incorporate VCSEL technology and does not encourage large-scale adoption of the technology.
Key Market Trends Consumer Electronics is Expected to Hold a Significant Share
- The expanding smartphone market and increasing adoption of 3D sensing technology across various end-user industries are some of the major driving factors of the studied market. Over the past few years, VCSELs have become a key enabler in the widespread use of 3D sensing and imaging technologies. Data communications were the first industrial application that integrated VCSEL technology; 3D sensing modules are becoming an essential component in most of the advanced smartphones, where VCSELs are becoming a primary option for smartphone manufacturers. - Xiaomi, Huawei, OPPO, Samsung, and Sony are now ordering large quantities of VCSEL products. Market vendors, like II-VI Inc, also reported increased shipments of its VCSELs products for FY2019, addressing the growing consumer electronics, datacom, and other developing end markets. VCSEL is also easier to experiment, is more efficient, and requires less electrical current to produce a given consistent power output. VCSEL diodes are inexpensive to manufacture. Also, the total VCSEL cost per smartphone has decreased over the last two years. Therefore, the smartphone will continue to be a significant driver for the studied market during the forecast period. - For some time now, it is expected that Apple will incorporate laser-powered time-of-flight (ToF) 3D rear camera to its iPhone 12 series, which will bring improvements in the form of new augmented reality experiences and better photos. Apple has approached San Jose-based Lumentum to supply the VCSEL lasers that will power the 3D depth sensor in at least one of 2020’s iPhones. VCSELs, or vertical-cavity surface-emitting lasers, have been a critical component of Apple’s TrueDepth camera since the iPhone X in 2017. The lasers power several flagship features like Face ID, Animoji, and Portrait mode selfies, as well as the proximity-sensing capabilities of AirPods. - In January 2020, Apple revealed the latest 12.9-inch iPad Pro product of 2020 with a LiDAR scanner for a world facing 3D sensing solution that uses 940nm 3W VCSEL direct ToF with a sense distance up to five meters. The light energy emitted by VCSEL is used to calculate the reflected time and received by a single-photon avalanche diode sensor (SPAD Sensor). One of the advantages of the technology is power saving is the main advantage. Lumentum and SONY are the major suppliers for the technology. 3D sensing combining 5G transmission and AR function with gesture control is expected to realize interactive augmented reality, leading to a broader range of applications and new possibilities.
Asia-Pacific is Expected to Witness Rapid Growth
- Asia-Pacific is one of the essential markets for VCSEL technology. The region is dominating the semiconductor manufacturing, smartphone manufacturing, and consumer electronics manufacturing market. The region serves as home to many of the global smartphone companies. The organic electronic production in the emerging economies in the region is also surging VCSEL demand in the region. Countries like India, Vietnam, and Thailand, among others, are witnessing the increasing number of smartphones and other consumer electronics manufacturers setting up their manufacturing plants in the region. - In June 2020, Hubble, a venture capital subsidiary of Huawei, has reportedly invested in Vertilite Co. Ltd., a maker of vertical-cavity surface-emitting lasers (VCSELs). The company makes VCSELs that generate light at wavelengths from 650nm to 1000nm for applications from high-speed optical communication to optical sensing in biomedical, industrial, automotive, and consumer products. In July 2019, the company announced it had closed a Series B round of funding at CNY 108 million in September 2018. That funding was intended to accelerate Vertlilite’s mass production of VCSELs for mobile applications. - To support the growing demand for VCSELs, AMS also increased production at its existing site in Singapore, with an investment of USD 200 million, over the next three years. According to the company, this was to create an R&D and manufacturing lines for VCSEL production. In March 2020, Compound semiconductor foundry Sanan Integrated Circuit Co. Ltd. (Xiamen, China) has expanded its optical portfolio to include VCSEL arrays. With a wide range of wavelengths available in-house, Sanan IC enables the design and manufacturing of high-power VCSEL lasers, high-speed VCSEL lasers, distributed feedback (DFB) lasers, avalanche photodiodes (APD) and monitor photodiodes (MPD). - In September 2019, Epiwafer foundry and substrate maker IQE plc announced the successful device and module qualification for vertical-cavity surface-emitting laser (VCSEL) epi wafers for a significant Asian OEM. The firm reckons that this represents an essential development in the adoption of 3D sensing technology by Android smartphones, with production volumes anticipated in 2020. Production volumes are expected to ramp sharply over the next few years as adoption across multiple mobile platforms, and other use cases proliferate.
Competitive Landscape The Vertical Cavity Surface Emitting Laser market is highly competitive. It consists of significant individual players such as II?VI Incorporated, Lumentum Operations LLC, Philips Photonics? (TRUMPF Group), Hamamatsu Photonics K.K, etc., which is a moderately fragmented market. The companies in the market are increasing their market presence by introducing new products or by entering into strategic mergers and acquisitions.
- January 2020 - Ambarella, Inc., Lumentum, and ON Semiconductor launched a joint 3D sensing platform for the development of smart video security products and intelligent access control systems, including intelligent video doorbells and door locks. The platform is formed based on Ambarella’s CV25 CVflow AI vision system on chip (SoC), structured-light powered by Lumentum’s VCSEL technology, and ON Semiconductor’s AR0237IR image sensor. - January 2020 - II?VI Incorporated announced the introduction of its high-speed vertical-cavity surface-emitting lasers (VCSELs) on its vertically integrated 150 mm gallium arsenide (GaAs) technology platform to serve the growing demand for optical high-definition multimedia interface (optical HDMI) cables in consumer electronics. II-VI’s high-speed VCSELs developed for datacenter transceivers are now available on its scalable 150 mm GaAs platform to meet the expected high-volume demand for optical HDMI cables.
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