Read about Capital Spending and Photonics, Online Educational Resources, Reconsidering Smart Cities, Special Events, New Reports and Other Noteworthy News, Opinions & Opportunities In this Issue:
The Optical Society (OSA) is committed to providing the support and resources our members and customers expect from us to be safe and informed during the COVID-19 (Coronavirus) pandemic. We are maintaining business operations and delivering services in all program areas virtually to ensure our community continues to receive high-quality content. Learn more. Why Capital Spending is So Important to Photonics The segment of the optics and photonics industry most impacted by the current economic crisis will be the vendors of machine tools to make heavy equipment. When car sales decline as much as 50%, there is less demand to buy new tools to make the cars. Likewise for tools to make aircraft, when planes are being taken out of service as travelers stay home. However, the impact varies even within the machine tool sector, depending on the type of end user. Source: WSTS and IC Insights (2020). Included in the capital expenditures, called capex, are microlithography and inspection tools. Sales of these tools mimic the mathematical derivative of the semiconductor sales, and varies much more in economic cycles than the chip sales, which in turn varies more than the installed base of chips. Source: OIDA (2020), from Apple financial data. The red line in the next chart illustrates the step-wise levels of new manufacturing capacity that might be required to produce these iPhone volumes, represented in terms of iPhone volumes. This new capacity might require laser-based cutting and welding tools, and machine vision for automated manufacturing lines—that is, optics and photonics to make the phones. The columns at bottom illustrate the additions in manufacturing capacity that might be required to ramp volumes. Note that once the sales reach a saturation level, further investment in manufacturing capacity may not be necessary. Source: OIDA (2020), from Apple financial data. This is meant to be illustrative; we are not suggesting that these are the actual steps in capacity that Apple’s suppliers implemented, as Apple's manufacturers continue investing in new manufacturing lines. For example, customers continue to invest in new product lines and take advantage of attractive discounts and financing to make investments they were planning to make eventually. But it illustrates how such capacity can be viewed as the second derivative of the installed base and the first derivative of new sales, and how it is more "clumpy" and cyclic than those end-product shipments. The pandemic has changed how we live and work, and we hope that you are finding the balance what works for you and your company. Online events are now the norm, at least for the time being. We understand if you feel like the subject of the cartoon, confused and zoomed-out. But we want to be sure to point out some excellent resources we have to help the carry on through this crisis. Source: CartoonStock.com First, check out OIDA's upcoming and recorded webinars, including its special series on managing a business through the crisis and a full list of related resources here. The 7 May webinar on Insights from the Investment Community noted that the optics and photonics sector, or at least in the optical communications vertical market, is in a better position today than in the Telecom Bubble and 2008 recessions. But, venture investors will be unforgiving in the current climate, even if a startup’s setbacks are not its own fault. We said in the April 2020 OIDA newsletter that economic crises tend to accelerate outcomes. But which ones? Well, one is the demise of Toronto's Quayside project, led by Sidewalk Labs. It seemed already doomed, even without the pandemic, but a crisis has a way of reordering priorities. On 7 May, Sidewalk Labs announced the end of the project (here). View of the Toronto waterfront area. Source: Urban Hub. The grand technology project attracted a lot of media attention, but suffered from hubris. Big Tech has a reputation for favoring shiny new technology that offers incremental benefits at best, over understanding a complex landscape of stakeholders and their real needs. Cities have hard problems that are messy to manage. They are evolving, open systems—unlike the data centers that Alphabet manages. Artist conception of the Toronto Quayside Smart City. Source: Urban Hub. It didn't help that the public is becoming increasingly wary of Big Tech's ability to manage technology, especially if it involves so-called surveillance capitalism—profiting from the control of personal information. And with a distressed Toronto real estate market and millions of people newly unemployed in Canada, there's likely little appetite for expensive, utopian projects.
OIDA Member Sponsored Webinars RSVP today for one or more of our upcoming OIDA member webinars. Registration is free. Testing MTP/MPO Assemblies: Setups, Troubleshooting, and What to Expect How to Benefit from Continuously Variable Filters in Fluorescence Microscopy, Confocal Microscopy and Spectroscopy? Transform the Way You Bring Products to Market Taming a Mid-IR OPO – Realizing the Widest Tuning Range for High Resolution Spectroscopy Faster Design Time to More Manufacturable Systems Each week hundreds of optics and photonics professionals tune in to OIDA webinars to learn about new products, services and trends. Sponsor a webinar and shine the spotlight on your company. Digitally engaging with customers is paramount during this unprecedented time of social distancing. Contact OIDA at oida@osa.org or +1.202.416.1474 and get started! New OIDA Webinar: OIDA Market Update The COVID-19 pandemic has disrupted the global economy, but the effects on the optical communications sector are complicated. There is more residential demand for videoconferencing and movie streaming, and cloud services, but providers may lose significant revenue from small businesses. Spending on capital equipment tends to fare worse in recessions, yet the communications industry will likely do better than many. Lisa Huff will discuss how the current pandemic is likely to affect the revenue forecast for the optical communications industry, and address your questions. Lisa Huff is Senior Principal Analyst in optical components for the market research firm Omdia.
Learn more and register now. RSVP for Virtual OIDA Member Benefit Orientation RSVP for OIDA's member benefit overview orientation. This is an opportunity to learn more about key membership benefits you and your company should be taking advantage of and explore how to maximize performance and grow your business. 5G Webinars from the OSA Career Lab The OSA Career Lab provides professional development opportunities and technical training for promising leaders in optics and photonics community from the Optical Society. We're here to serve our members and the optics and photonics community at large to keep our industry engaged.
The Optical Society's second 5G Summit will examine the latest developments in 5G and the critical role of optical network technologies as key enabler. It provides a platform for industry leaders, innovators, researchers, and the government community to learn, network and exchange ideas.
Call for Nominations — John Tyndall Award We are currently seeking nominations for the 2021 Tyndall Award, which recognizes an individual who has made outstanding contributions in any area of optical-fiber technology, including optical fibers themselves, the optical components used in fiber systems, as well as transmission systems and networks using fibers. This award is co-presented by OSA and IEEE Photonics Society and supported by Corning Incorporated. Call for Nominations — Herbert Walther Award We are currently seeking nominations for the 2021 Walther Award, which recognizes distinguished contributions in quantum optics and atomic physics as well as leadership in the international scientific community. This award is co-presented by OSA and Deutsche Physikalische Gesellschaft (DPG). Support for the award is provided by Toptica Photonics AG and Messe München International - LASER World of PHOTONICS. Invitation to Join the OIDA Optics and Photonics Industry LinkedIn Group Join 3,500+ of your colleagues in our OIDA 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! Questions or Suggestions about OIDA Member Benefits? We are committed to ensuring the value of your OSA Industry Development Associates Membership, so please email OIDA if you have any suggestions for new programs or comments on your membership.
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