Market musings from Munich
Matthew Dale reports on the International Laser Marketplace that took place at the Laser World of Photonics this year
The International Laser Marketplace grants the attendees of Messe Munich’s Laser World of Photonics the opportunity to learn more about the markets, trends and driving applications of laser materials processing. This year, thanks to a new media partnership that Laser Systems Europe has with the Marketplace, I had the chance to seize this opportunity myself and report my findings:
In addition to chairing the event, Dr Arnold Mayer, of Optech Consulting, expanded on his report of the 2018 industrial laser market that was released earlier in the year, which revealed that despite a decline in growth from 30 to 17 per cent, the global market for laser systems for materials processing reached a record volume of $19.8 billion in 2018.
Mayer emphasised that while newer applications such as additive manufacturing did contribute to the recent growth in system sales, the biggest impact came from added capacity to the very well-established laser applications, such as cutting and welding.
‘If we really want growth, we cannot only count on new applications,’ he remarked. ‘We need growth from the existing applications.
‘Electronics, automotive, sheet metal processing, these are all dominant applications. If these don’t see growth, we won’t see growth for the laser industry.’
He added that the alternative would instead be having a variety of ‘real, heavy-growing new applications’ emerge that would then stimulate further market growth.
For 2019, Mayer expects a market contraction on a worldwide basis, however he explained that this is not an unusual development. ‘In 2016 and 2017, I said that higher power lasers were being bought as if there’d be no lasers available tomorrow, that was my comment at the time as the market was overheated, this year is a counter reaction now,’ he said. ‘To me if we come out of this year with 5 per cent less growth, this would be very moderate considering how much the market increased before. I don’t think there’s a very specific reason for such a moderate correction.’
Challenges in China
Commenting on the progress of the Chinese laser market for 2018, Dr Qitao Lue, CTO of Chinese laser giant Han's Laser, expressed that while in the media we might have seen that business conditions in China are well and unchanging, this is not in fact the case.
'In reality, for more than one year, we have experienced problems, big challenges for companies,’ he said. ‘The real conditions are not good, demand has slowed down.’
He commented that following 13 years of unbroken growth in the sales of laser technologies, driven by applications in the smartphone, sheet metal cutting, electric vehicle and display industries, a downturn of 15 or even 20 per cent is now expected over the coming year. When questioned about the reason for this anticipated downturn, Lue elaborated that demand has slowed in the smartphone and sheet metal processing industries, and that due to strong competition, electric vehicle production is a 'money losing business' in China.
On a more positive note, Lue reported that last year the total Chinese laser market reached sales of $5 billion, and that export growth has been steady. The main export market for Chinese companies are mainly countries in Southeast Asia such as Vietnam, Taiwan, Malaysia, Korea, and India.
In addition, Lue said that while in general less laser systems are now imported to China due to the improving strength of domestic system integrators, there was a jump in imports from Korea last year, mainly due to activities in the display and semiconductor industries. He continued by saying that the increased integration and automation capabilities of Chinese laser integrators are also making it difficult for system integrators from abroad to service end users in China.
Looking forward, in order for Chinese laser integrators to grow further, Lue explained that offering laser modules alone will not be enough, and that these integrators must look to offering ‘laser technologies plus X, where X is machine vision, industrial robotics, 3D printing or even internet and big data capabilities for customers.’
Regarding the number of units for each type of industrial laser system sold in China last year, Lue reported that pulsed fibre laser sales reached around 100,000 units, while sales of medium-power CW fibre lasers (up to 1.5kW) were between 12,000-15,000 units, sales of high-power fibre lasers (over 1.5kW) exceeded 6,000 units, and UV laser sales exceeded 8,000 units.
Going forward, Lue predicts that pulsed fibre laser and UV laser sales will remain around the same, and that high-power fibre lasers and ultrafast lasers will show particularly strong growth.
Looking at the how many of these sold systems were manufactured by Chinese laser companies, Lue reported that: for pulsed fibre lasers, between 70-80 per cent were sold by domestic manufacturers; for medium-power CW fibre lasers it was roughly two thirds; for UV lasers it was close to 90 per cent; and for ultrafast lasers it was around 60 per cent.
Turning towards how the prime applications of industrial laser technologies have varied over the years, Lue informed attendees that: between 2002-2006, the prime application was marking buttons with low-power CO2 lasers; from 2003-2008 the spotlight shifted to marking keypads and keyboards using DPSS lasers; from 2009 an increasing number of laser systems were used to manufacture smartphones; from 2010 more fibre lasers were being used for sheet metal cutting; in the last five years electric cars have become more important due to the need to weld batteries; and finally in the last three years, OLED and LED displays have become a strong focal point for lasers, particularly those in the ultrafast regime.
Addressing the ongoing trade conflict between the US and China, Lue explained that because of it, many big contract manufacturers have been moving their production capacity out of China, and that Southeast Asia will therefore become a very important region for laser sales in the future .
In addition to Southeast Asia, Lue commented that another opportunity for the Chinese laser industry will be the ‘One belt, one road’ initiative currently being undertaken by the Chinese government. This initiative offers export opportunities across 26 countries and a railway network spanning 81,000km, with the covered region containing two thirds of the world’s population. ‘This initiative opens new export markets for Chinese enterprises, it helps countries in such regions to improve their infrastructure,’ Lue said. ‘In my opinion laser technology will play a significant role in this massive economy and market initiative.’
Despite these positive opportunities, Lue concluded saying that it is still unpredictable what will happen in the second half of this year or even next year – acknowledging the US-China trade conflict at the end of his presentation by displaying pictures of US president Donald Trump and Chinese President Xi Jinping side by side.
Catering to the customer
This year’s panel discussion at the Marketplace covered the topic of ultrafast laser development.
Two current key applications for the technology were identified by the panel as glass cutting and the dicing of silicon wafers – both of which are prime examples of how lasers are replacing conventional mechanical methods. According to Thomas Merk, executive vice president and general manager for industrial lasers and systems at Coherent, wafer dicing in particular has recently become particularly difficult to perform mechanically due to wafers having gotten increasingly thinner – down to below 100µm thickness. He explained that ultrafast lasers are now being used as a suitable alternative to mechanical methods, and that this application of ultrafast laser technology is still in its early stages.
Panellists discussed the ongoing developments and trends in the ultrafast laser regime at the International Laser Marketplace this year. (Credit: Messe Munich)
The key takeaways for me from this year’s panel discussion were that for the uptake of ultrafast lasers to be increased – it was said that the ultrafast laser market volume is still under $500 million, less than 10 per cent of the total laser market volume – manufacturers need to reduce the cost and increase the flexibility of their systems, in addition to further developing the applications of ultrafast laser technology, and providing closer support to the customers and integrators purchasing their systems.
‘The ultrafast laser industry is it an early stage still, and I think it's beneficial to develop systems that have high flexibility and high average power, which can be adjusted more easily to the demands of the customer,’ commented Berthold Schmidt, managing director of research and development at Trumpf. ‘I think what is happening in this industry is that single use lasers are going away, and I expect customers will work more closely on reducing capital spending in the future. Therefore, having lasers that after one production cycle can be readjusted and reused for a slightly different application is probably the way to go, so we have to go there.’ Schmidt added that he’s already starting to see a tendancy toward variable pulses and adjustable repetition rates emerging in ultrafast laser technology.
Merk remarked that because industry is still transitioning from working with classical mechanical applications to working with lasers, in addition to reducing the cost of ultrafast lasers, laser manufacturers should also be investing money into further developing the applications of the technology. He added that creating a package around these applications, including the required beam delivery technology, would help system integrators and machine builders deliver a proven solution to end users, which would help increase the uptake of ultrafast lasers considerably.
In response to a question as to whether there is a current limitation in the knowhow of ultrafast laser customers, Merk and Schmidt agreed that there was, with both explaining that they often have to work very closely with their customers to guide and teach them about their different applications in order to help them select an optimised ultrafast laser solution. ‘I think that's something I see as an important step forward...this more active and more involved business development,’ remarked Schmidt. On the application development side, he also emphasised that for Trumpf's own activities in this area, the firm currently has the same number of employees involved in ultrafast laser application development as it has working on laser welding – emphasising the importance and potential of ultrafast laser technology.
Other trends mentioned by the panel – in addition to the continued increase in average power for industrial ultrafast lasers – included the increasing variety of wavelengths being offered in the ultrafast regime, such as UV, which Schmidt remarked will be important for future applications. Martynas Barkauskas, CEO of Light Conversion, added that he was happy to see more companies now providing UV femtosecond lasers, and said that this was definitely something that wasn't happening a year ago. Lastly, Dr Lue of Han’s Laser, who was also a panellist in addition to giving his own presentation, remarked that the emergence of 5G could bring with it new materials that will require ultrafast lasers to process – specifically those offering picosecond pulse duration.
Powering up the Pulse - Matthew Dale learns that dramatic increases in power are on the horizon for ultrafast lasers