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The Paradoxical Passive Optics Market
Passive optics is a paradox. It's the oldest product category, yet innovation is thriving as much as ever. OIDA estimates that companies globally produce about US$56 billion in passive-optical products annually. This includes about $24.5 billion in free-space optics (including lenses, prisms, mirrors, crystals and other elements), $11 billion in optical fiber and cable, and under $1 billion in planar optics. Passive optics are everywhere, but the market is difficult to comprehend.
The majority of passive optical components are designed for the visible range of the spectrum. Free-space optics for the near-infrared, infrared and ultraviolet ranges are more exotic and expensive. Most fiber and cable products and planar optics are designed for the near-infrared range; including those categories, total annual production of optics outside the visible spectral range comes to about $14.4 billion. In addition, about $2 billion of optical materials are produced annually to fabricate free-space optics across all ranges.
 Source: OIDA |
The optics business orients toward customized solutions. There are many types and grades of materials that are made into a wide range of optical elements. Each is specially designed for an end product—such as an image sensor or a laser—that itself is designed for a specific application or set of applications, such as a barcode reader or a stent cutter. Hundreds of vendors offer tens of thousands of variations in product materials and designs.
This customized nature makes for a complicated supply chain that is difficult to comprehend or generalize. When asked to identify suppliers of passive optics, many in our community would correctly identify the vendors of optical bench tools and other familiar names. These vendors are mostly small- to medium-sized companies that regularly exhibit at OSA events. Fewer would identify the largest suppliers, such as Hoya, Carl Zeiss, Corning or Largan Precision, each with more than $1 billion in revenues from passive-optics products. Corning sold $3 billion in fiber, cable, and related products in 2016, and over $3.2 billion in precision flat-panel-display glass. Largan Precision, a supplier of optics and assemblies for mobile phone handsets, had revenues of $1.5 billion.
With countless product designs and small companies constituting more than 50 percent of suppliers, the market is consolidating and fragmenting simultaneously. Larger companies are buying boutique companies to obtain critical technology or to grow through acquisition. But cost-effectively consolidating optics manufacturing across so many materials and specialized processes is difficult—or even impossible. Moreover, small companies provide much of the innovation that is so important to market growth.
Passive optics will remain fundamentally oriented toward customized products that serve niche customers. OIDA expects that the business will gradually consolidate in more mature markets, but will continue to expand for elements used in innovative and exotic applications, from consumer products to space telescopes.
This article also appeared in the July/August 2017 issue of OSA's Optics & Photonics News, here.
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Update and a New Book on the Lighting Industry
The LED lighting industry continues to gain rapid adoption, with LED lighting capturing approximately 50% of new installations of $80 billion global lighting annual sales. It doesn't seem so long ago that there was concern about the adoption rate of high-brightness LEDs into the general lighting business. Falling prices of compact fluorescent (CFL) sources, initial reports of some poor quality LED bulbs, concerns about reducing the manufacturing cost of LEDs, and other technical and market issues are no longer concerns. The industry is now in a virtuous cycle of increasing volume and falling costs that benefits downstream customers, such as lighting manufacturers like Acuity Brands. Consumers benefit most of all from the improvement in energy efficiency and product lifetimes.
According to the U.S. Dept. of Energy (DOE), lighting consumes about 15% of the electricity consumed in the U.S., and LED lighting comprises about 13% of the installed base today. It estimates that LED lighting will be installed into about 50% of all installed lighting by 2024. With adoption into general lighting now secure, the industry is exploring new applications, such as using lighting to improve human health and agriculture.
 Source: U.S. Dept. of Energy (2016), available here, p. 17. |
What's been good for lighting manufacturers and consumers hasn't been as good for the LED chip and module suppliers. Competition has eroded prices and profit margins, making it a challenging business for companies like Cree, Lumileds, Osram, and others that supply the LED chips and modules.
 If you are interested in a good history of the commercialization of LED lighting, Bob Johnstone tells the story of what has been called one of the fastest technology shifts in history in L.E.D.: A History of the Future of Lighting. The book is Johnstone's follow-up to Brilliant!, his book on the origins of the LED revolution. The book is based on five years of research and interviews with the key players in the field. The book is available on Amazon here.
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Reminder: Special Small Business Opportunities in Optics and Photonics
The U.S. Department of Energy (DOE) has announced the first set of new topics for SBIR/STTR Phase I grants to be funded in fiscal year 2018. Several topics are related to optics and photonics, including input/output for high-performance computing (see more details below), free-electron laser oscillators, optics for hard x-ray imaging, microscopy and spectroscopy, LEDs and OLEDs for solid-state lighting, bioimaging, environmental instrumentation, and optics for nuclear physics instrumentation. The summary of topics was posted 17 July and can be found here. The official funding opportunity announcement (FOA) will be released 14 August, with letters of intent due 5 September, and applications due 16 October. Another set of topics will be posted on 30 October. The schedule can be found on DOE's SBIR website here.
As reported in last month's OIDA newsletter, the U.S. Department of Energy Advanced Scientific Computing Research program office began a program in 2017 to accelerate the development of photonic interconnect fabrics in modern supercomputers. In 2017 three companies received SBIR/STTR grants to develop a Photonic Memory Controller Module, connecting a server class CPU to a dozen DRAM modules. With the 17 July release, DOE's ASCR announced is asking again for photonic devices that can demonstrate replacement technologies for electrical interconnect fabrics inside modern supercomputers. Companies are encouraged to being planning for this funding, while the exact requirements will be specified in the DOE FOA on 14 August. Academic and lab partnerships are allowed. If you are seeking a partner for SBIR grants, please contact Tom Hausken.
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National Academies Seeks Input on Materials Research
The National Academies is conducting a decadal study to assess the state of materials research in the U.S. and to highlight future directions in the field. The program is holding a series of town hall meetings through 2017 to obtain input, including one which OSA hosted at CLEO in San Jose on 15 May. The committee's final report will be published in 2018 and is aimed at U.S. federal agencies that support materials research, science policymakers, and researchers. The study is supported by the U.S. Department of Energy and the National Science Foundation. If you are interested to provide input to this study, find more information here or contact Eric Svedberg, study director, at esvedberg@nas.edu.
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U.S. Capitol Hill Day — 18 September — Meet with your Congressional Offices
While the President’s FY2018 Budget proposal includes large cuts to research and development funding, it is ultimately up to Congress to decide funding levels for the federal agencies and programs. This is why it is so important to advocate to your members of Congress about the importance of federal research and development funding. During the upcoming Frontiers in Optics (FiO) Conference taking place in Washington, D.C., OSA is planning to do a Capitol Hill Day on Monday, 18 September from 9:00am-noon. OSA will arrange the meetings with your members of Congress, provide a training webinar for participants the week prior and will provide participants with the resources you need. Capitol Hill Day signup deadline is Friday, 8 September, space is limited. Please note, you do not have to be an FiO attendee in order to participate in Capitol Hill Day. Read more about Capitol Hill Day or to signup.
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Welcome New OSA Industry Development Associates (OIDA) Members
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Meet 2,000 Customers in 4 Hot Markets at the All New FiO, 19-20 September — The Inaugural Year of a New Exhibition Experience
The 2017 OSA Frontiers in Optics + Laser Science APS/DLS conference introduces a meeting experience that has been thoughtfully revised — taking the best of the past and adding vital, innovative elements. Special exhibit discounts are available to OIDA members.
What's new for exhibitors? A lot! Changes and enhancements include:.
- New focus on 4 key rapidly evolving and expanding markets: Automotive, Nanophotonics and Plasmonics, Optics in Computing and Virtual Reality and Augmented Vision
- New location in USA's easy-access capital city, Washington, DC offers access to government funding agencies
- Longer exhibit hours than ever before gives you maximum exposure to new buyers
- Visionary Speakers from within and beyond the optics and photonics community provide insight into future cutting-edge advances
- Rapid-fire sessions in the Exhibit Hall draw more attendees to your booth
Reserve your exhibit space today! +1 202.416.1428 | exhibitsales@osa.org. Remember, as OIDA members, you receive a special rate for your exhibit space. Booth space starts at $1,955 for a 10x10 space, and tabletop displays are $1,658.
Not exhibiting, but Interested in attending? Save when you register by 21 August. Learn more.
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Top 5 Reasons to Attend the OSA Laser Applications Conference, 1-5 October in Japan!
- New all invited speaker format for industry — hear from thought leaders in industrial applications.
- Network with both scientific and industrial leaders in the laser field.
- Strong program focus on Materials Processing and Applications for High Power Lasers.
- Enhanced exhibition with over 70 companies.
- You'll witness innovative solutions and thought-leadership on and off the show floor that will accelerate your business for the year ahead.
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In its second year, The Laser Applications Conference (LAC) is an all invited speaker format for industry in Laser Applications at the OSA Lasers Congress. This 3-day meeting focuses on two main topic areas -- Materials Processing and Applications for High Power Lasers. Materials Processing includes advanced applications for industrial use. Applications for High Power Lasers will include topics such as EUV for Lithography, 16kW+ Laser Applications, X-Ray Generation, Lasers for Space Applications and Tool Making. One of the themes of this meeting will be to initiate discussions on what engineering and production advances are needed to translate promising technological advances into marketable products. |
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Find New Business Opportunities and Promote Your Corporate Innovations with Engineering & Lab Notes from Applied Optics!
Engineering and Laboratory Notes (E&L Notes), from Applied Optics, highlight laboratory methods and best practices technicians and specialists can utilize for the design, analysis, fabrication, integration, alignment, and measurement of optical components and systems. These techniques of the trade can lead to further innovations as well as networking opportunities for both authors and readers. E&L Notes Editor Brian Monacelli sums up the initiative here.
Applied Optics recently published these E&L Notes:
- How good is your lens? Assessing performance with MTF full-field displays by Brandon Dube, Roger Cicala, Aaron Closz, and Jannick P. Rolland
- Experimental optimization of concatenated taper Mach—Zehnder interferometers operating in the 1000—1150 nm wavelength range by D. Toral-Acosta, A. Martinez-Rios, G. Salceda-Delgado, R. Selvas-Aguilar, and V. M. Duran-Ramirez
- Step-by-step guide to reduce spatial coherence of laser light using a rotating ground glass diffuser by Tim Stangner, Hanqing Zhang, Tobias Dahlberg, Krister Wiklund, and Magnus Andersson
View all of the published E&L Notes here.
Gain recognition and attrach new customers: Applied Optics continues to seek E&L Notes to publish. Submit yours today.
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60,000+ Professionals Use WORKinOPTICS.com. Find Your Perfect Job or Candidate Now.
The Optical Society's (OSA) online job board, WORKinOPTICS.com connects leading employers, qualified job and internship seekers and consultants within the optics and photonics community. Whether you're searching for a job, someone to fill a job, or exploring career options, WORKinOPTICS.com is a reliable global resource that can help you to make valuable connections in industry and academia.
OSA Industry Development Associates member companies get 20 free job postings! Learn more and join other OIDA members who have found new hires on WiO. "Optonicus has connected with highly qualified candidates with strong skill sets through the Work-in-Optics website, and we look forward to connecting with future team members as our business grows" Tom Tumolillo, Jr., COO of Optonicus
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Invitation to Join the LinkedIn Optics and Photonics Industry LinkedIn Group
Join 3,000 of your colleagues in our Optics & Photonics Industry Network LinkedIn Group. This one-of-a-kind Forum for Industry lets you participate in discussions about cutting-edge issues. Extend your professional network. Exchange information about problems, ideas and solutions. Collaborate with experts in your field. Now is the perfect time to build a relationship with fellow optics and photonics professionals!
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Take advantage of your OSA Industry Development Associates (OIDA) Member Benefits
We are committed to ensuring the value of your OSA Industry Development Associates Membership, so please email OSA if you have any suggestions for new programs or comments on your membership.
Forward this message to your colleagues.
Not yet a member? Learn more about the benefits of membership.
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OSA Industry Development Associates (OIDA) Committee
Thank you to the volunteers who oversee the programs and services available to the Industry Community.
• Alex Fong,
Gooch & Housego, Chair
• Claudio Mazzali,
Corning, Inc., Chair-Elect
• Henrik Skov
Andersen,
Ibsen Photonics
• Simin Cai,
Go!Foton |
• John Dexheimer,
Lightwave Advisors
• Fred Leonberger,
EOvation
Technologies, LLC
• Mike Mielke,
Lumentum
• Martin Seifert |
• Costel Subran,
Opton Laser
International
• Christoph Harder,
Harder and Partner |
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