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Laser diodes or semiconductor lasers are compact, efficient coherent light sources that find widespread usage in optical storage, laser printers, barcode scanners, fluorescence microscopy, and confocal microscopy among others. A laser diode produces coherent light when electrons recombine with electron holes within the device, causing the emission of photons. Advances in material sciences have enabled the development of direct bandgap semiconductor materials like gallium arsenide, aluminum gallium arsenide, and indium gallium arsenide that serve as the active lasing medium for laser diodes. The compact size, reliability, low power consumption, and precise output of laser diodes have made them indispensable in various industrial and consumer applications. The global Laser Diode Market is estimated to be valued at US$ 45 Billion in 2023 and is expected to exhibit a CAGR of 18% over the forecast period 2023-2033, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
Vertical-cavity surface-emitting laser (VCSEL) technology is one of the key trends shaping the laser diode market. VCSELs have several advantages compared to edge-emitting lasers like lower packaging costs, ability to create 2D arrays, lower power consumption, and ability to fast modulate. These properties make VCSELs well-suited for applications involving data communications, sensing, and imaging. Another notable trend is the increasing focus on wide-bandgap semiconductor materials like gallium nitride and diamond for the development of green and blue laser diodes with higher efficiencies. Such laser diodes could enable the miniaturization of 3D sensing modules for facial recognition in smartphones. The military and defense sector is also boosting investments in R&D activities involving gallium nitride laser diodes for applications in LIDAR, directed energy weapons, and laser weapon countermeasures.
Porter’s Analysis
Threat of new entrants: The threat of new entrants is moderate as laser diode technology has high initial setup costs and barriers to entry in terms of distribution channels, branding and access to key customers.
Bargaining power of buyers: The bargaining power of buyers is moderate since some key customers like smartphone manufacturers can negotiate on pricing. However, customized requirements keep their bargaining power in check.
Bargaining power of suppliers: The bargaining power of suppliers is low given the availability of substitute raw materials and outsourced manufacturing hubs reducing dependence on any single supplier.
Threat of new substitutes: The threat of new substitutes is moderate as newer technologies like LEDs pose a threat but laser diodes still maintain an edge in applications requiring precision and efficiency.
Competitive rivalry: Competition is high among key players operating at a global level.
Key Takeaways
The global laser diode market is expected to witness high growth over the forecast period of 2022-2032. The rising demand for laser diodes from various end-use industries such as consumer electronics, industrial, telecom and healthcare is driving the market.
Regional analysis: The Asia Pacific laser diode market is expected to be the largest and fastest growing regional market during the forecast period. This is attributed to high manufacturing activity from key players in countries like China and low production costs. Countries like Japan, South Korea and Taiwan are also major contributors to the growth of the laser diode market in Asia Pacific.
Key players operating in the laser diode market are ASML Holding NV, Panasonic Corp., IPG Photonics Corp., AMS Technologies AG, Sharp Corp., Jenoptik AG and Coherent Inc. IPG Photonics Corp. specializes in fiber lasers and diode lasers for industrial applications. Coherent Inc. provides laser solutions for microelectronics manufacturing and other industries.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
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