China surpasses Europe as largest laser systems consumer
Arnold Mayer, general manager of Optech Consulting, analyses the major trends in lasers and laser systems for materials processing, including the Chinese and fibre laser markets
The market for laser systems has increased by 7 per cent annually over the last 10 years with China being a major driver (see figures 1 and 2) – laser materials processing systems accounted for USD 11.8 billion in 2015, 3.7 times larger than the market for industrial lasers at USD 3.2 billion (2015).
For more than 20 years Europe had been the largest user of laser systems. Europe had taken over the leading position in the early 1990s from the United States, which had pioneered the use of lasers in industrial manufacturing. In 2015 China surpassed Europe as the largest consumer of laser systems for the first time.
The Chinese market has an impressive history of growth. In 2005 it only accounted for a volume of USD 300 million, representing 5 per cent of the global market. By 2011 the market in China had increased to USD 1.8 billion. The recent growth history is mixed, with a 10 per cent increase in 2012, followed by a 30 per cent surge in 2014, and another 10 per cent increase in 2015. In 2015, the growth rate was only about 5 per cent, reflecting the slowdown in overall growth of the Chinese economy.
Optech Consulting is frequently asked whether the growth of the laser materials processing market in China will persist. Those who have observed the laser industry for a long time may remember how Japan was on the verge of becoming the largest laser user in the 1980s, but that the market then fell as industrial production capacity was transferred from Japan to lower wage countries. We do not expect that this will occur in China in the foreseeable future. The present boom in laser materials processing in China is founded on a large and growing basis of industrial manufacturing that is adopting lasers. As long as manufacturing in China grows faster than in most other parts of the world, we expect that the demand for laser materials processing systems will show more than average growth.
Figure 1: Global market for laser systems for materials processing 2005 through 2015. Source: Optech Consulting
Figure 2: Global market for laser systems and share of China. Source: Optech Consulting
High power laser systems for cutting, welding and surface treatment make up 45 per cent of the laser systems market. These systems employ lasers with an average power of 1kW and above. As most laser systems only include one laser this means that the laser accounts for 27 per cent of the system value, on average.
Laser systems for microelectronics processing make up a 22 per cent share. These systems are used in the manufacture of semiconductors, flat panel displays, printed circuit boards, solar cells, fibre-optic components, and microfluidic devices. The balance of 33 per cent is accounted for by low- to medium-power laser materials processing systems. The average power of the lasers used in these systems is below 1kW, while for pulsed lasers the peak power can be a multiple of that. The systems are used for metal and non-metal cutting, welding, marking, additive manufacturing, as well as many other processes such as cleaning, engraving, and soldering. Systems for additive manufacturing and medium-power metal cutting systems especially contributed to market growth in recent years.
Fibre lasers dominate
Fibre lasers now hold a 37 per cent share of the global market for lasers for materials processing (USD 3.2 billion in 2015), with gas lasers accounting for 37 per cent, and bulk solid-state and diode lasers 26 per cent (see figure 3). The market share of fibre lasers has increased strongly during the last 10 years, from only 4 per cent in 2005 to 14 per cent in 2010 and 37 per cent in 2015 (see figure 4). For the last five years the average annual market growth rate for fibre lasers in materials processing was nearly 30 per cent.
The success of fibre lasers in materials processing is mostly due to the replacement of other laser types in already well developed applications. The first major substitution concerned marking, where fibre lasers replaced bulk solid-state lasers. The next major substitution concerned sheet metal cutting where fibre lasers replaced CO2 lasers. Fibre lasers also carved out a substantial market share in low and high power welding.
At the same time, large segments of the industrial laser market are still unaffected by fibre lasers. This includes many microprocessing applications, where fibre lasers do not provide the wavelengths and pulses needed. This includes ablative and structuring processes, as well as microlithography and annealing. In addition, many non-metal processing tasks favour the longer wavelength of CO2 lasers.
Figure 3: 2015 global market for lasers for materials processing. Source: Optech Consulting
Figure 4: Global market for lasers for materials processing and share of fiber laser lasers. Source: Optech Consulting
Optech Consulting is frequently asked for how long fibre lasers will continue to gain market share. According to our market assessment fibre lasers have advanced substantially in the major substitution markets. They dominate in marking and they clearly outnumber CO2 lasers in sheet metal cutting and in high power welding. In high power cutting and welding fibre lasers increasingly compete versus disk and diode lasers rather than versus CO2 lasers alone.
It is important to note, however, that the success of fibre lasers has not been limited to the substitution of other lasers. In marking, fibre lasers have not only replaced bulk solid-state lasers but they have markedly pushed the limits of laser application due to low cost. Fibre lasers for marking are now available for a few thousand US-dollars making laser marking attractive for an increasing number of applications. In metal cutting fibre lasers have enabled low cost systems due to low prices and ease of integration. In additive manufacturing fibre lasers were early adopted while the substitution of other lasers played a minor role. Pulsed fibre lasers are increasingly successful in pulsed welding and in drilling, and ultrafast fibre lasers have started to penetrate microprocessing. Taking into account these opportunities we expect that the demand for fibre lasers will continue to grow stronger than the market, although longer term growth rates will be substantially lower than in the past.
Arnold Mayer is the general manager of Optech Consulting (www.optech-consulting.com), a Swiss consulting firm for the laser and photonics industry. Optech Consulting assists companies and institutions in technology marketing and strategy development. Publications include the Industrial Laser Quarterly Report and various laser market reports. The Laser Marketplace, a seminar organised periodically by Optech Consulting, provides a discussion platform on industrial laser markets.