Optoelectronics Industry Accelerates in New Areas

Anne L. Fischer

Optimistic about the future, the Washington-based Optoelectronics Industry Development Association (OIDA) indicated in its eighth annual “Global Optoelectronics Industry Market Report and Forecast” that the industry experienced 20 percent growth in 2005 and that certain areas are poised for much stronger growth through 2010.

A review of the optoelectronics market in 2005, the 410-page report suggests that the major driver of this upward movement is the proliferation of display-based products — most notably flat panel LCDs, which are used in a variety of applications from televisions to computers to cell phones to personal digital assistants. In a trend that is expected to continue, LCDs now account for more than 70 percent of the optical components industry.

The report notes that imaging array sensors are used in digital cameras and mobile phones, and that diode lasers are used in optical storage and communications.

In 2005, the optoelectronics industry experienced a steep rise in three major application areas (Figure 1). It realized a nearly 40 percent increase over 2004 in the consumer/entertainment market, a 14 percent increase in the optical communications business and an 8 percent rise in the computing sector, although revenue in the latter area — $195 billion — was greatest.

Figure 1. From an applications standpoint, computing is the largest segment of the $17 billion global optoelectronics sources and detectors components market. The computing market is mainly composed of image sensors, nondiode lasers and LEDs. The consumer and entertainment applications sector follows closely in size, but has experienced the most growth, 15 percent, over 2004.

Fiber optic sensors, which previously had small niche market applications, now have emerging uses in the oil, security, military, aerospace, industrial, petrochemical and well industries, among others. Distributed fiber optic sensors are used in pipelines to monitor leaks; along power lines and structures to detect breakages; in buildings, dams, bridges, roads and tunnels to check for structural soundness; and in perimeter security applications, where they can be permanently installed or deployed as needed.

The fiber optic sensor market grew 92 percent in 2005, achieving a revenue of approximately $130 million. This revenue is forecast to rise to nearly $1 billion by 2010, with a year-over-year growth rate leveling off at about 63 percent. The report suggests that the US government will invest in sensor development to achieve improved security, further driving the growth of this market. Michael Lebby, president and CEO of OIDA, indicated that opto-electronics companies involved in component fabrication and design are now looking at opportunities for fiber optic sensors.

Among other markets, the diode and nondiode laser sectors are projected to have a combined revenue of $6.9 billion in 2010. The fiber laser market also represents an emerging area, with the devices being used in industrial applications such as laser welding.

High-brightness LEDs have finally entered the consumer market. Driven by government demand for energy efficiency, the market for the devices is expected to grow steadily in revenue from approximately $4 billion in 2005 to $8 billion in 2010. The manufacturing base will continue to be in Asia, where industry mergers and consolidation will further centralize expertise and market hold. Although high-brightness LEDs are now being used mainly in mobile appliances, they are increasingly finding their way into every aspect of automotive lighting, which is expected to be their largest application area by 2010.

The solar sector is another high-growth market that is propelled by the demand for energy efficiency. Largely made up of solar cells and their component materials, this sector is expected to grow from just over $10 billion in 2005 to more than $35 billion in 2010.

The optical communications industry should grow steadily, from $17 billion in 2005 to more than $30 billion by 2012. The expansion will be primarily in Asia, driven by new build-outs and equipment for locations with little or no infrastructure, according to Lebby. A review of the biophotonics market shows that it is strong as a result of new tools for diagnosis and therapy, and the demand for lab-on-a-chip products.

The report includes new chapters on nanotechnology, telecommunications, image sensors, data communications, ultraviolet materials, optical networking, medical optoelectronics, and optoelectronics defense research and development. An appendix lists sources of market information. OIDA members may receive a complimentary copy of the report, which is priced at $2995 for nonmembers. Visit www.oida.org for more information.