Global laser systems market shows strong growth in 2021

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We spoke with Arnold Mayer, of Optech Consulting, to discuss his preliminary findings for last year’s global market for industrial laser systems. (Image: Pixels Hunter/Shutterstock.com)

The global market for industrial laser systems saw strong growth last year, despite the pandemic. Preliminary data based on the first three quarters show it reached a new record high of $21.3bn, up 22 per cent versus 2020. 

The market for industrial laser sources also reached a new record volume of $5.2bn in 2021.

These findings, obtained by market research firm Optech Consulting, were shared by the firm’s general manager, Arnold Mayer, at the recent Lasers and Photonics Marketplace Seminar, held at Photonics West in San Francisco.

‘This growth was driven mainly through the major end industries of laser materials processing, including micro-electronics, automotive and general sheet metal processing,’ Mayer told Laser Systems Europe. ‘Demand for laser processing even picked up because the pandemic increased electronic equipment sales. Demand in the automotive industry was spurred by the transition to e-mobility; applications here mainly include high-power welding and foil cutting. Also, general sheet metal cutting saw strong demand in 2021. Despite the application having been around for decades, the technologies involved continue to grow and develop.’

For this last point he shared the example of fibre lasers, which continue to deliver more power for less cost. ‘This is opening up a lot of new market opportunities in sheet metal processing,’ said Mayer. ‘Sheet metal has traditionally been cut by stamping presses for larger lot sizes, whereas for small lot sizes, laser cutting has increasingly been used. This is now changing, however, due to laser cutting increasing in power and throughput, and becoming extremely productive.’

Preliminary data shows the global market for industrial laser systems demonstrated 22 per cent growth, to $21.3bn in 2021 

Consequently, laser cutting can now compete with stamping presses and take market share for processing medium lot sizes, according to Mayer. ‘This is an ongoing process,’ he remarked. ‘There is still a lot of additional potential in sheet metal cutting that can be unlocked by lasers. This is also true for thick sheet metal, where laser cutting competes with plasma cutting.’

China continues to stimulate market growth

In terms of region, China is playing an extraordinary role in stimulating the growth of the laser system market, having contributed a very high share towards global industrial manufacturing. 

‘The country has now adopted laser technology to the same extent as Europe and the US, meaning it is by far the largest market for industrial laser systems,’ said Mayer. ‘This is driven in particular by sheet metal cutting, which has shown significant growth in the region in recent years, but also microelectronics manufacturing, a lot of which is now located in China.’

Lasers have become an enabling technology in the production of many microelectronic products – for example semiconductors, displays and printed circuit boards. 

‘A lot of consumer electronics firms in the west have their products manufactured in China, while an increasing number of local (Chinese) firms are also having their products manufactured there,’ Mayer explained. ‘So that has opened a lot of opportunities for certain laser applications – for example, micro processing using short- and ultra-short-pulsed (USP) lasers.’

The technology proportions of the $5.2bn 2021 global market for industrial lasers, based on preliminary data

The pandemic is also a contributing factor to increased electronics manufacturing in China. According to Mayer, increased demand for home office equipment and electronic devices in general caused a surge in sales. This followed a lull in the market in 2019, when smartphone sales had previously decreased. 

‘The natural bounce back of the industry following the lull, combined with increased demand during the pandemic, led to a surge in sales, which in turn launched a new investment cycle for electronics manufacturing equipment,’ Mayer remarked.

One thing he did note about China though, is it isn’t competing as well in the production of high-spec lasers – these still come mostly out of Europe and the US.

‘Using USP and UV lasers as an example, those made in China usually result in a trade off between higher power and quality, whereas in Europe and the USA we see continually increasing average power, high-quality USP and UV lasers emerging,’ said Mayer. ‘Chinese laser manufacturers will undoubtedly catch up at some point, however, this will be an ongoing development process that will take time.’

Future growth segments and market forecast

From past experience several lessons have been learned, according to Mayer. 

‘One lesson is about where new laser processing applications will likely emerge,’ he said. ‘Two major end industries for industrial lasers are the electronics and the automotive industry. In the past, new developments in these sectors were crucial for new and extended laser applications, such as for e-mobility, handheld electronic devices and their components. This is only expected to continue. New developments in displays, for example, repeatedly occur and are expected to continue to offer new laser applications.

‘Another lesson is about which laser types are needed for new applications. Often, several laser types compete and the application selects the laser, and suppliers therefore need a portfolio of products to be well positioned to serve these new applications.’

As for how the laser systems market could develop in the future, Mayer first noted it has grown at an average annual rate of 9 per cent over the last 15 years, and that this growth trend does not show saturation. 

The global laser systems for material processing market, compared with the global machine tool market

‘For the next five years, I expect continued high, single-digit market growth rates,’ he said. ‘There is plenty of application potential in the major end industries mentioned earlier: automotive, electronics and general sheet metal manufacturing. In addition, it is always worthy to observe megatrends that have an impact on industrial manufacturing, also in other industries.’

A continued high, single-digit growth rate would lift the laser systems market to a volume above $30bn within five years, corresponding to more than 30 per cent of today’s machine tool market. 

‘However, I always add a cautionary footnote to this forecast,’ Mayer remarked. ‘The demand for industrial laser systems has a history of being highly susceptible to macro-economic ups and downs, similar to the demand for machine tools or semiconductor equipment. In 2009, for example, the demand for industrial laser systems decreased by more than 40 per cent, and it took several years for the market to return to its long-term growth line. Fortunately, there has been no comparable downturn for more than 10 years, but we cannot exclude that for the future.’

Mayer will share his full findings of the 2021 market data at the upcoming 15th International Laser Marketplace in April, to be held alongside the Laser World of Photonics exhibition in Munich.

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