Vertical Cavity Surface Emitting Laser (VCSEL) Market SWOT Analysis, Business Growth Opportunities By Top Companies | IQE PLC, VERTILAS GmbH, Vertilite, FLIR Systems, Thorlabs, Leonardo S.p.A.

The Vertical Cavity Surface Emitting Laser (VCSEL) Market size is estimated to grow from USD XX Billion in 2020 to USD XX Billion by 2027, growing at a CAGR of 21.5% during the forecast year from 2021 to 2027.

Market definition, market segmentation, key developments in the market, competitive analysis and research methodology are the major topics in which this Vertical Cavity Surface Emitting Laser (VCSEL) market research report is divided. This market research provides clients with the information on their business scenario with which they can build business strategies to thrive in the market. The report covers all the market shares and approaches of the major competitors or the key players in the market. Each of the topics covered in the Vertical Cavity Surface Emitting Laser (VCSEL) market analysis report is studied very well to get clear idea about all the factors that are influencing the market growth.

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Various types of VCSELs are being deployed worldwide, from single-mode VCSELs to multimode VCSELs. Multimode VCSELs are used for 3D sensing and high data rate transmission over short reach as more than one optical mode is allowed inside the laser cavity in multimode VCSELs. The objective of the report is to define, describe, and forecast the VCSEL market based on type, material, wavelength, application, data rate, industry, and region.

Impact of COVID-19 on current VCSEL market size and forecast

The emergence of the COVID-19 pandemic, a deadly respiratory disease that originated in China, is now become a worldwide issue and has also affected the VCSEL market. The market has been negatively affected primarily due to a 10% decline in smartphone shipments in 2020 as compared to 2019. Apple (US), the main smartphone OEMs for VCSELs, actually experienced a growth of 1.6% during 2019-2020, while other manufacturers experienced a fall of 12% during the same period. Since Apple is the major customer for VCSELs as compared to other manufacturers, the fall in the shipment of VCSELs was not as severe. Other consumer electronics are also experiencing a fall in revenue initially but are expected to recover from 2021 onward. As the overall market is expected to recover in 2021, some segments such as commercial and industrial, and military are expected to have a slightly late recovery, as a realistic growth rate has been adopted.

VCSEL Market Dynamics

Driver : Growing adoption of 3D sensing applications in smartphones

VCSELs play an important role in 3D sensing applications in smartphones. 3D camera sensing using a flood illuminator, dot projector, and proximity sensor are all based on VCSEL laser components. Cameras that scan and render objects in 3D have now become a standard feature in high-end smartphones. The cameras, when paired with proper software, enable the user to sense light levels, movements, and textures more precisely than previously possible. VCSELs offer several advantages, such as relatively low cost, optical efficiency, low power consumption, wavelength stability, and high modulating rates. This has resulted in an increase in the adoption of VCSELs in 3D sensing applications in the market.

With technological advancements in 3D sensing using VCSELs, smartphones are no longer limited to simple face recognition and unlock applications but have extended to complex applications, such as 3D object recognition, modeling, and augmented reality (AR), by utilizing smartphone cameras. Apple’s (US) integration of VCSELs into its smartphones for 3D sensing applications has resulted in increased demand for the technology due to competitors, such as Samsung (South Korea), Xiaomi (China), Huawei (China), and BBK Electronics (China), quickly adopting VCSEL technology. Hence, the increase in demand from smartphone players is projected to be one of the major driving factors for the adoption of VCSELs in the market.

Restraint : Limited data transmission range

The data rates attained are considerably high for optical communication using VCSELs, with the latest devices transmitting at more than 50Gbps. Multimode fiber (MMF) is designed to operate at wavelengths of 850 and 1,300nm, where 850nm is the most common wavelength for VCSELs. However, signal attenuation is high in MMF, and the range of VCSELs is limited to a maximum of ~300 m. Hence, transmitting data using VCSELs over a certain distance can be a challenge due to the weakening of the signal. Attenuation is higher for data communication over longer distances, which results in signal losses, thereby affecting performance. As a result, the VCSELs are not suitable for long-range optical communication. Other limitations of VCSELs include limited modulation performance and large frequency chirp, which limits data transmission speed and distance. These factors are projected to restrict the use of VCSELs, thereby limiting its adoption.

Opportunity : Use of VCSELs in LiDAR systems for automotive applications

The automotive industry offers significant growth potential for VCSEL suppliers. The two main applications in automotive are in-cabin monitoring and LiDAR. For in-cabin monitoring, VCSELs are utilized to keep track of the driver and occupants in the car. By collecting driver and occupancy data, in-cabin sensing enables driver monitoring, whether the driver is actively paying attention to the road or is distracted or drowsy. In-cabin sensing also makes it possible to support gesture recognition for in-car navigation, communication, and infotainment systems. For in-cabin scanning, the Euro NCAP (The European New Car Assessment Programme) mandate for driver monitoring systems (DMS) is expected to become a safety standard in Europe for next-generation motor vehicles.

According to MarketDigits, LiDAR for the automotive market is expected to grow at a CAGR of 28.3%, from an estimated USD 735 million in 2025 to a projected USD 2,557 million by 2030. VCSELs are quickly being adopted for LiDAR equipment, as it is one of the most important components in autonomous vehicles. They are used in LiDAR systems that find applications in self-driving cars. LiDAR is an evolving remote sensing technology that measures the distance by illuminating the target with a laser and analyzing the reflected light. The fast on/off switching of VCSELs permits distance measurement at that spot. LiDAR sensor is one of the emerging applications for VCSELs in the automotive sector. In autonomous vehicles, LiDAR acts as an eye for the vehicle by providing a 360-degree view of the surrounding. LiDAR sends thousands of laser pulses every second.

These laser pulses collide with the surrounding object and then reflect back. A 3D cloud point is created by using the resulting light reflections. Each laser’s reflection point is recorded by an onboard computer, which rapidly translates these points into an animated 3D representation. The 3D representation monitors the distance between the other passing vehicle and any other vehicle in front of it. It commands the brakes to slow or stop. When the road ahead is clear, it also allows the vehicle to speed up. The increasing production and sale of self-driving cars are projected to drive the demand for LiDAR, and hence, VCSELs. Moreover, as the need for safety features in automobiles is increasing, many government regulations have been put in place to enhance safety levels in vehicles.

Challenge : Impact of COVID-19 on the smartphone and automotive industry

The smartphone industry is one of the significant adopters of VCSEL technology that has witnessed market disruptions and substantial changes in buying patterns. The pandemic is expected to slow down the growth of high-end devices. Delays in manufacturing and reduced demand could set back the development of high-end smartphones that incorporate VCSEL technology. The global semiconductor shortage due to disruptions in the supply chain is also expected to discourage large-scale adoption of VCSELs in more affordable smartphones. This shortage is more prevalent in the automotive industry as semiconductor foundries reassigned production for smartphones, laptops, and gaming devices to cater to the surge in demand for such devices during the pandemic.

The COVID-19 pandemic has also imparted a significant impact on the growth of the automotive industry. Although countries are partially working through various lockdown measures, the loss of consumer confidence is expected to persist. This is projected to impact the sales of automobiles in the long term. As automotive is one of the growth markets for VCSELs, its growth is projected to remain hampered during the forecast period. According to the International Organization of Motor Vehicle Manufacturers (OICA), vehicle production in 2020 witnessed a decline of 16% as compared to that of 2019. As VCSELs for in-cabin sensing and LiDAR are mostly used in more expensive vehicles, the market conditions are not expected to significantly affect the demand for VCSELs. However, COVID-19 has still created a challenging situation for the VCSEL manufacturers that cater to the growth of the automotive industry.

Market Interconnections

Market for multimode VCSELs to grow at higher CAGR during the forecast period

The multimode VCSEL segment is projected to register a higher CAGR during the forecast period. In 2017, with the release of the Apple iPhone X, its 3D sensing module and multimode VCSELs witnessed an increased production, becoming more prevalent in the market. They are also increasingly used for high-power 3D ToF sensing, industrial, illumination, and LiDAR applications. The integration of 3D sensing by more smartphone manufacturers and the future applications of VCSELs in automotive LiDAR is projected to account for this growth.

Market for GaAs based VCSELs to grow at highest CAGR during the forecast period

The GaAs segment is projected to register the highest CAGR during the forecast period. The high adoption of GaAs-based VCSELs in the production of smartphones and consumer devices is the primary growth driver in the market. In addition, the use of GaAs-based VCSELs in LiDAR applications is projected to create growth opportunities in the long term for the players operating in the ecosystem. Technological innovations in consumer electronics besides smartphones, such as AR/VR devices, are projected to further increase the demand for GaAs-based VCSELs in 3D sensing applications.

Market in automotive industry to grow at highest CAGR during the forecast period

The high growth in the automotive segment is attributed to the increase in the use of VCSELs in automobiles for driver monitoring and infotainment systems. As the automotive industry is moving toward the evolution of autonomous vehicles, VCSELs are finding increased applications in systems, such as advanced driver assistance systems (ADAS), to support this evolution. LiDAR is the latest technology used in automotive safety developments and solutions that are being developed to make solid-state LiDARs using VCSELs. The increase in transition toward the adoption of autonomous vehicles in the long term is projected to drive the growth of the segment. The increase in the importance of VCSEL for LiDAR, in-cabin monitoring/driver monitoring, and gesture recognition are expected to be the primary growth drivers during the forecast period.

Market in APAC to grow at highest CAGR during the forecast period

APAC has a large consumer electronics industry, including countries such as China, Japan, and South Korea, which is the largest manufacturer and end user of consumer devices. South Korea is a key country for manufacturing portable consumer devices, while China is the manufacturer and consumer of consumer electronics devices. Players such as Samsung (South Korea), Huawei (China), Oppo (China), and Xiaomi (China) are already using VCSELs in their smartphones. Significant investments in new vehicle technologies, including electric vehicles, LiDAR, and autonomous vehicles, are expected to create a demand for VCSELs. Countries in APAC such as China and South Korea have led to the adoption of 5G communication technology, which would further provide opportunities for penetration of VCSELs in data communication. Hence, for consumer electronics, the market in APAC is projected to continue to grow as markets in North America and Europe continue to stagnate over time.

Key Market Players

Major vendors in the VCSEL market include Lumentum (US), II-VI Incorporated (US), ams (Austria), TRUMPF (Germany), Broadcom (US), Vertilite (China), Coherent (US), Alight Technologies (Denmark), Connector Optics (Russia), VERTILAS (Germany), WIN Semiconductors (Taiwan), IQE (UK), Ricoh (Japan), Fuji Xerox (Japan), MKS Instruments (US), FLIR (US), Santec (Japan), Leonardo Electronics (US), TT Electronics (UK), Ushio America (US), Thorlabs (US), Bandwidth 10 (US), RaySea Technology (China), Inneos (US), Frankfurt Laser Company (Germany), OCTLIGHT (Denmark), Ouster (US), Sanan Integrated Circuit (China), NeoPhotonics (US), Lytek Corporation (US), and OptiGOT (Sweden).

Recent Developments

In March 2021, Lumentum (US) announced the launch of five and six junction VCSEL array products for advanced consumer, automotive, and other 3D sensing applications.
In February 2021, II‐VI Incorporated (US) launched its VCSEL flood illuminator modules for driver and occupancy monitoring systems in vehicles. The VCSEL flood illumination modules integrate VCSEL chips, photodiodes, and diffuser optics to achieve a greater degree of vertical integration and value for customers.
In January 2021, ams announced the launch of its VCSEL IR emitter family for the industrial mass market in 2D and 3D sensing. The EGA2000 flood illuminators combine VCSEL and optical packaging technologies to provide optimal performance in detection and ranging applications.

Scope of the Report:

This report categorizes the VCSEL market based on type, material, wavelength, application, data rate, industry, and geography.

VCSEL Market, by Type:

Single-Mode
Multimode
Impact of COVID-19 on different types of VCSELs

VCSEL Market, by Material:

Gallium Arsenide (GaAs)
Indium Phosphide (InP)
Others

VCSEL Market, by Wavelength:

Red
Near-Infrared (NIR)
Shortwave Infrared (SWIR)

VCSEL Market, by Application:

Sensing
Data Communication
Industrial Heating & Laser Printing
Emerging & Other Applications

VCSEL Market, by Data Rate:

Upto 10 Gbps
10.1 to 25 Gbps
Above 25 Gbps

VCSEL Market, by Industry:

Consumer Electronics
Data Center
Automotive
Commercial & Industrial
Healthcare
Military
Impact of COVID-19 on different Industries

VCSEL Market, by Region:

North America
Europe
APAC
RoW

This report would help you answer the following questions:
1. What is the market size and forecast of the Global  Vertical Cavity Surface Emitting Laser (VCSEL) Market?
2. What are the inhibiting factors and impact of COVID-19 shaping the Global  Vertical Cavity Surface Emitting Laser (VCSEL) Market during the forecast period?
3. Which region outstands in the Global  Vertical Cavity Surface Emitting Laser (VCSEL) Market?
4. Which are the segments to invest in over the forecast period in the Global  Vertical Cavity Surface Emitting Laser (VCSEL) Market?
5. What is the competitive strategic window for opportunities in the Global  Vertical Cavity Surface Emitting Laser (VCSEL) Market?
6. What are the technology trends and regulatory frameworks in the Global  Vertical Cavity Surface Emitting Laser (VCSEL) Market?
7. What are the major company in the Global  Vertical Cavity Surface Emitting Laser (VCSEL) Market?

Table of Contents:
1 Introduction
2 Research Methodologies
3 Executive Summary
4 Premium Insights
5 Market Overview
6 Industry Trends
7 Compliance in Vertical Cavity Surface Emitting Laser (VCSEL) Market
8 Vertical Cavity Surface Emitting Laser (VCSEL) Market, By Service
9 Vertical Cavity Surface Emitting Laser (VCSEL) Market, By Deployment Type
10 Vertical Cavity Surface Emitting Laser (VCSEL) Market, By Organization Size
11 Vertical Cavity Surface Emitting Laser (VCSEL) Market Analyses, By Vertical
12 Geographic Analyses
North America
Europe
Asia-Pacific
South America
Middle East & Africa
13 Competitive Landscapes
14 Detailed Company Profiles
15 Related Reports

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