Growth in the Asia-Pacific market is allowing global companies to make their mark on the industry in that region. Increased research and development activity is boosting production, allowing more self-reliance within Asian countries. This is positioning the region to better compete with other areas of the world. Countries including China, Japan, Taiwan, Korea and Singapore are beginning to dominate various sectors. Technological advances — such as South China University’s development of a new glass material that protects against UV damage, and the creation of the world’s lowest power-consuming transceiver circuit (achieving communications speeds of 56 Gbps per channel) by Japan-based system-on-chip manufacturer Socionext Inc. and network research facility Fujitsu Laboratories Ltd. — increase consumer demand, which, in turn, further boosts R&D and revenue in the Asia-Pacific market. This is also beginning to heighten competition between companies that are local to that region, and ones that are based elsewhere. Experts agree that those entering the Asia-Pacific market will need to stand out among other companies if they are going to succeed. Photonics Spectra (PS) spoke with industry experts about the Asia-Pacific market, doing business there and potential global impacts. Joel Bagwell, director of engineering and manufacturing technology at Edmund Optics in Barrington, N.J. A supplier of optics and optical components, Edmund also designs and manufactures an array of multi-element lenses, lens coatings, imaging systems and opto-mechanical equipment. Herman Chui, senior director of product marketing at Spectra-Physics (a Newport Corp. company), a supplier of solutions for precision laser applications, as well as performance lasers including ultrafast, Q-switched, DPSS, tunable, CQ and pulsed YAG. Sophie Wang, international business manager at Kunming Yunzhe High-Tech Co. Ltd. in Yunnan, China, which develops, designs and manufactures infrared optical components, infrared optical lenses and thermal infrared imagers. The company also works with infrared single crystal germanium. Photonics Spectra: According to market reports, Asia is expected to become the leader in laser technology and photonics within the next five years. What does this mean for your business, both in Asia and globally? Bagwell: We have all seen this coming for some time. Our reaction is simply to invest in processes and equipment that move Edmund up the precision scale. Simply put, there will be greater demand for higher precision optics and our manufacturing base must be prepared. As such, we are investing in the ability to mass produce higher precision optics, better surfaces and the associated metrology to meet the demand. On the product development and marketing side, we are focusing on what is selling and are tightening the feedback loop between product development, marketing and sales on a region-by-region basis. One such example is our market penetration into China. The activity and considerable management focus has revealed a different product profile, and overall a different recipe is required to reach customers than in the U.S. Chui: There are certainly a growing number of local Asian competitors, but we also see growth in our business in Asia — perhaps the market growth plus our market share growth are offsetting the effect of local competition. Our approach in Asia has been to innovate at faster rates in key applications and with products that are game-changing in performance, reliability and cost — this approach has been successful for us in Asia and also translates into successes outside of Asia. Wang: This means [our] cost to open a business would be much lower. Freight is lower, the fee for an international exhibition is lower, and I would have much more opportunities to meet face to face with my clients. Now, most of our revenue comes from the North America and Europe market[s]; five years later, I hope it could come from the Asia market. This would also develop the Asia regions’ R&D level. PS: Many developments and advancements are being made in the Asia-Pacific region, including a new fiber optic sensor that could allow noninvasive monitoring of early stage embryos during the in vitro fertilization (IVF) process, as well as a new technique for fine-tuning the performance of europium (Eu)-doped gallium nitride (GaN) devices. How are such developments in the Asia-Pacific region driving the industry’s global business market? Bagwell: Japan has been innovating for quite some time and the cited examples are the latest output. We do see increased R&D activity in China and India, which is one key arena of Edmund’s business model. Edmund is an enabler of R&D hardware activities, so in areas where R&D picks up, we want to be right there. Often, R&D activity is closely followed by production activity, and we are certainly seeing the uptick in the Asia-Pacific region that puts it on-par or even above that of the Western hemisphere. So the developments mentioned are indicative of what we are seeing, in that the ecosystem of R&D to production is becoming more self-contained within the Asian countries. Wang: Smaller and thinner [systems], not only for the military region, but commercial [customers] demand it to be cheaper. Demand determines the design. Designs and production are to apply for different regions. New materials — different materials have different characteristics, [and] to find something new and better shall never stop. PS: As technology advances and the photonics industry grows and becomes a more “mainstream” resource, where do you see the global market — pertaining to the Asia-Pacific region, in particular — in the next five years? 10 years (and beyond)? Bagwell: Shifting production bases, increased standards of living and aging populations will all be factors that will drive activity in the Asian photonics industry. Rising prices in urbanized China are likely to cause manufacturing bases to shift into western China, Vietnam, Indonesia and Thailand. Chui: As laser technology continues to advance in performance, reliability and cost, we are seeing, and expect to continue to see over the next 5 to 10 years, an increase in adoption of lasers in existing and new applications. These new areas include both applications served by other nonlaser techniques (e.g. mechanical) and completely new applications enabled by lasers. This trend is especially true in the Asia-Pacific region where, for example, much of the manufacturing in the world is transitioning, and lasers become more widely used in manufacturing processes for gains in precision, quality and operating cost. Wang: [In] five years — Japan and Korea have a perfect innovation strength, improved market system and financial environment. [A lot of] global companies [are] located [there]. However, labor cost is high. [In] 10 years and beyond — China and India. China is growing so rapidly these years, [and] India is also doing well. As two of the BRIC 4, these two are still doing [well] when the whole global economic [market] is in a loose condition. As China gradually improves its R&D level and the market environment, it must become popular. India has a high R&D level, but the environment for commercial shall also be improved. PS: What advice would you offer to those who are just entering business in the Asia-Pacific market? Bagwell: Act and think local. It is the most important area to focus [on] when expanding into these countries. Chui: To be successful doing business in the Asia-Pacific market requires a significant, long-term commitment. Over time, we have established capabilities not only in sales but also in areas ranging from marketing and service to applications and manufacturing. This multi-dimensional, long-term approach has been instrumental in building our relationship with customers and business in the Asia-Pacific market. Wang: Always be curious about the new innovation and the client’s demand. What’s more, [if] all of your competitors are diligent, you need to work overtime, always.