Photonics21 AGM: Light-based business beats global trends

17 May 2024

Despite geopolitical challenges significantly affecting international trade.

New research published at the Photonics21 Annual General Meeting (AGM), this week in Brussels, reveals that photonics industries worldwide outpaced global GDP from 2019 to the post-pandemic period of 2022, growing at a CAGR of 6.8%.

According to a market study published by Photonics21 and conducted by the French market intelligence group Tematys, “the photonics industries in Europe, Asia, and the US remained robust during 2019-2022, a period affected by some of the toughest global and economic tensions after decades of geoeconomics and globalisation”.

Entitled Insights into the Dynamic Photonics Market (2019-2022), the study shows the photonics industry worldwide grew from the previous 2015-2018 study period despite challenges such as Covid-19, global inflation, and Russia’s invasion of Ukraine hitting trade.

Photonics industries worldwide outpaced global GDP from 2019 to 2022, growing at a CAGR of 6.8%. Above right, is Dr Lutz Aschke.

Outperforming global growth

Global GDP growth has generally fluctuated between two and five percent from year to year in most years since 1980. However, the global market for photonics components and systems, which accounted for $865 billion in 2022, outpaced GDP worldwide during the three years from 2019, growing at a CAGR of 6.8%. This growth is predicted to continue into 2027, when the Tematys study expects the world photonics market to be worth $1.2 trillion.

At the AGM, Dr. Lutz Aschke, Photonics21 President and Managing Director of the Mahr Group, said, “The latest research from Tematys shows that light technologies are bucking the global trend against a backdrop of some of the most turbulent economic and geopolitical activities in decades.

“The findings from the study affirm Europe’s central role in driving worldwide photonics innovation. While the EU can maintain its competitive edge with its enormous photonics capacity and an innovation ecosystem spanning the continent, a sustained investment will be crucial to harnessing the full potential of optics and photonics in the coming decades,” said Dr. Aschke.

Fastest-growing sectors

Tematys identified photonics applications in environment, energy, lighting, agriculture, and Industry 4.0, as the fastest-growing sectors across the world. While the relatively small segment of Photonics for Agriculture and Food is an emerging market at present, this domain showed an exceptional CAGR of 11.8% during the period.

“Given that photonics and associated technologies are critically important to a number of industries, this strong growth is easy to see. In healthcare, for example, optics and photonics are enabling scientists to develop fast and precise imaging of major diseases, accurate diagnostics, and minimally invasive surgical procedures with lasers,” said Dr. Aschke.

The study reveals substantial growth and development in European photonics between 2019 and 2022. Key highlights include:

• Thousands more jobs – Photonics sector employment increased by 35,000 jobs during this period, far exceeding the growth rate of European manufacturing as a whole.
• Industry volume – European photonics production rose to €124.6 billion in 2022, representing over 5,000 companies and contributing significantly to Europe’s manufacturing landscape.
• Annual revenue growth – The sector witnessed an annual revenue growth rate of 6.5% (2019-2022), outpacing Europe’s GDP growth even after accounting for inflation.
• Market Share – Europe was the second-largest player in the global photonics market (with 15% share), underscoring its competitiveness against major players like China and the United States.
• Innovation and R&D – The European photonics industry exhibits a strong commitment to research and innovation, with an R&D intensity of 10.5% [total R&D expenditure divided by sales value], found to be significantly higher than that observed in other industries.

P21 Innovation Award Winner: Hamidreza Neshasteh of CNRS, Paris, France.

• In his speech, Dr. Aschke gave a short review of the past year: “Our committed workgroup chairs and members immersed themselves in numerous workshops, exploring research and innovation priority proposals. These proposals serve as the foundation for future Photonics Partnership calls, paving the way for groundbreaking advancements.”
• Pierre Chastanet, Head of Unit for Microeletronics and Photonics Industry at the European Commission (EC), highlighted where photonics could play an important role in the European Chips Joint Undertaking. According to the EC’s view, the EU Chips Act provides a framework to strengthen integrated photonics activities.

  Chastanet added that the results of R&I projects in Horizon Europe have reached the technological maturity to be industrially relevant: “Joint R&I is essential for the co-integration of photonics and electronics,” he said. In his view, the challenges of mass production at wafer scale are better addressed in the Chips JU.

• Michelangelo Masini, Head of Research and Technology at Carl Zeiss AG, gave a keynote speech about photonics and its power of resilience and transformation and made a stance for increasing Europe’s attractiveness for the best talents so that the next big innovations happen in Europe.
• In a panel discussion entitled ‘Quo Vadis Photonics?’, industry experts discussed a range of issues, including how the sector can contribute to policies such as the European Chips Act and technological sovereignty, international cooperation and partnerships to accelerate innovation, and strengthening the global competitiveness of the industry.
• Innovation Award Winner 2024 – This year’s Innovation Award was presented to Hamidreza Neshasteh (pictured above), a research engineer at CNRS, Paris, France, with a check for of €5,000, acknowledging his research into the development of a “Micron-Scale Lab on a Disk for Sensing and Metrology”.
• Farewell Giorgio Anania – Photonics21 expressed gratitude to Giorgio, a founding member of the organization, “who has been shaping the Photonics21 Executive Board for over 18 years.”