Gazing into the crystal ball

24 Jun 2009

Leading executives are already making plans for what happens after the downturn.

At last week's LASER World of Photonics show in Munich, Germany, CEOs from the industry's biggest optics companies offered their opinions on the technologies and markets that will lift the photonics industry back onto its long-term growth trajectory. Neatly sidestepping the question of how their businesses will cope with the next six months, the executives imagined themselves transported to the more positive business environment that's expected to emerge by the end of the year.

The theme of the roundtable discussion, entitled "Optical Technologies: Bright Hopes in Times of Crisis", embraced the notion that technological innovation will continue to drive prosperity in the photonics sector. "The innovation cycles are shorter in photonics, and that offers real opportunities for optics companies," said Gerd Litfin, president of the German Physical Society, who moderated the discussion.

John Ambroseo, president and CEO of US laser manufacturer Coherent, kicked off by explaining why his company is putting its investment dollars into ultrashort-pulse lasers. "Short-pulse lasers have been in use for 20–30 years, and commercialization is now happening in a substantial way," he explained. "The technology now meets the needs of the applications, but innovation in the component space is needed to deliver on ROI [return on investment]."

Photovoltaics was also highlighted as a growth area. "The solar industry has slowed down, but progress is still being made to improve efficiencies," said Günther Braun, president and CEO of Rofin-Sinar. Braun pointed out that the US government's stimulus package has also allocated funding to photovoltaics, in particular to the development of thin-film solar cells that make greater use of laser-based fabrication techniques.

Yunfeng Gao, president of Chinese laser maker Han's Laser Technology, commented that photovoltaics is emerging as a driver in the Asian market. While China has seen the same downward slope in the industrial-laser business, Gao maintained that laser sales to more specialist sectors are still enjoying double-digit growth. "A lot of companies have entered the Chinese market, which has led to intense competition," he said.

Variations on a theme Other panellists noted the contrasting regional approaches to product innovation. "Some markets, such as Japan, are focused on new product development for the consumer and semiconductor businesses, but elsewhere our customers are really focused on getting the cost out of the system," said Stuart Schoenmann of CVI Melles Griot. Coherent's Ambroseo agreed, pointing out that customers aren't just focused on the cost of the equipment, but also on improving the efficiency of their manufacturing processes.

In a tacit admission that industrial markets remain challenging, many of the commentators were keen to highlight opportunities in the research and defence markets. "We see the research market as recession-proof, but it's not yet clear how the US stimulus package will impact on the photonics sector because it's all still on paper," said Ambroseo.

Ulrich Simon, president and CEO of Carl Zeiss, cautioned that governments are spending on R&D this year to mitigate against the economic crisis, but that funding might fall once the economic outlook improves. However, he anticipates that the stimulus package will help to drive growth through to year-end, and will ensure continued stability in 2010.

Meanwhile, Benoit Bazire of Qioptiq highlighted two emerging dynamics in the military sector. "Big defence programmes are at risk, but the priority now is to develop technologies that protect soldiers in the field." As a result, he said, Qioptiq has seen demand for night-vision equipment grow by around 25% in the last year. Schoenmann added that thermal-imaging equipment has also become a significant growth market for CVI.

Despite the positive messages, it was clear that even the biggest optics companies are using this enforced downtime to prepare for an economic upswing. "Everyone is working for the future," explained Bazire. "Optics is an enabling technology, and it will be there when new projects are signed off. No one is cutting R&D."