Early Estimate of 2017 Optics and Photonics Market Performance
Early results suggest that 2017 was the year we hoped for, with overall optics and photonics market growth of about 4.9%, as measured in U.S. dollars. While we are still waiting for the Q4 results, OIDA estimates the global market to finish near US$ 427 billion.
Strong sectors in 2017 included optical communications, machine tools, and biomedical tools. Commodity products, such as solar cells and panels, displays, and consumer imaging were weaker in performance overall but recovered somewhat from falling prices and excess inventories at the close of 2016.
We previously forecast a "cautiously optimistic" 5% growth for 2017 in the January 2017 issue of this newsletter. We said that growth was overdue as commodity sectors recovered, and a softening U.S. dollar to previous values would give the appearance of greater world production when measured in dollars. This is, in fact, what happened in 2017.
Our preliminary forecast for 2018 calls for a cautiously optimistic 4.5% growth, driven more by organic growth in sales and less from a softening dollar. Having put some political events behind us, such as the presidential election and new tax reform legislation in the U.S. and key elections elsewhere, some uncertainty in capital equipment markets is likely to ease, which can be good for the optics and photonics industry.
|Source: OIDA (2018)
We're tracking the market for you. For more information, check the OIDA Market Updates, available to OIDA members.
What's Hot in Optics and Photonics?
What's hot in optics and photonics in 2018? There is no single answer to this, but our community is fortunate that there are so many hot topics at one time. Here are some highlights from an article in the January issue of OSA's Optics and Photonics News.
- Hot end-markets. The optics and photonics market is benefiting from an "Apple economy" driven by big-name global tech companies making vast investments in innovative hardware, cloud computing, and artificial intelligence. Examples include face recognition, LIDAR for self-driving cars, VR/AR headsets, and integrated photonics and optical interconnects for warehouse data centers.
- Large public and private procurements and strategies. This includes China's Made in China 2025 and Belt and Road initiatives and Germany's Industry 4.0 strategy.
- Venture financing. Many large corporations now have their own venture funds, such as GV (formerly Google Ventures), BMW i-Ventures, Intel Capital, Lockheed Martin Ventures, and TRUMPF Venture. While overall U.S. venture investment has soared in recent years, it has mostly been channeled into areas not relevant to optics and photonics, such as fintech or direct-to-consumer businesses. As shown in the chart, fiber optic and networking technology declined for years after the telecom bubble. Solar startups were hot for several years until price erosion made the market unappealing. For some good news, LIDAR startups did particularly well in 2016 and 2017. One estimate is that over US$ 1 billion has been put into LIDAR startups in the last few years.
- Hot R&D topics. R&D can have its own path, especially if it is driven by government strategies. Quantum technology is hot as an R&D topic, such as in the U.K. and the upcoming E.U. Quantum Technologies Flagship Programme. Also notable has been advanced microscopy and imaging for neurology, such as the BRAIN initiative. Early-market technologies include photoacoustic tomography and many point-of-care diagnostic tools.
|New U.S. venture investment using a two-year rolling average. (Source: PwC/CB Insights MoneyTree;
OIDA estimates for 2017 based on 1Q-3Q.)
A product doesn't have to look trendy, though, for a company to thrive and earn high profit margins. Many, if not most, companies in our industry find growth through less-glamorous opportunities; what is hot for these companies is whatever brings growth and strong profits, whether it appears trendy or not. For the full article, see here.
Update on Optics and Photonics Advocacy in Washington DC
||The OSA government relations team had a busy 2017 working for the collective interest of our members and their companies. Our advocacy in the U.S. concentrates on bringing OSA members to Capitol Hill to meet directly with their legislators; organizing letters to members of Congress, and arranging for tours of labs and facilities by members of Congress. To echo our voice on Capitol Hill, we band together with industry, higher education and scientific societies on letters to Congress and other policymakers. Some recent highlights of our work in the U.S. include the following:
These are just some of the highlights from OSA's U.S. efforts this fall. See previous newsletters and here for more on OSA's advocacy, including IPAC and other efforts around the world, and the National Photonics Initiative. As issues arise that affect your business, please reach out to the OSA government relations team, led by Laura Kolton. We want to hear what issues are important to you.
- U.S. tax reform. The House version of this legislation included a provision to repeal the student loan interest deduction, graduate student tuition waivers, the Hope Scholarship Credit, the Lifetime Learning Credit and education assistance program. OSA joined other scientific and university groups in sending letters to Capitol Hill asking that the provision be removed, stating, "By making advanced education less affordable, it is likely to drive some students away from seeking higher education. Because a majority of graduate students are in the key areas of science, technology, engineering, and math (STEM), these provisions will have an outsized impact in the sciences." The provision was removed in the final version of the bill.
- U.S. science and technology budget. Despite FY 2018 beginning on 1 October, Congress has not finalized the spending bills for many of the agencies. The government is currently operating under a Continuing Resolution (CR). Complicating the annual funding process is that there is not an agreement on the overall budget numbers. OSA has joined other groups on a #RaisetheCaps campaign. The 2011 Budget Control Act provided guidance on spending levels for the different agencies. These levels were so low that for the last two years, Congress has waived the levels only to have them go into effect for FY 2018. Under the existing caps, discretionary programs such as research and development at key federal agencies will be cut.
- Other letters to policymakers. In December, OSA signed onto a letter led by AAAS and signed by more than 40 organizations to "request" a commitment that the federal government utilizes science-based decision making in its policy decisions, among other things (see here). In October, OSA signed onto a letter from the Energy Sciences Coalition supporting bipartisan efforts to advance ARPA-E, an agency of the U.S. Department of Energy (see here). Also in October, OSA joined with more than 70 organizations to express concerns that the September White House proclamation on visas and immigration could harm science and engineering in the U.S. (see here).
Welcome New OIDA (OSA Industry Development Associates) Members
Archive OIDA Webinar Now Available: New Milestones in Coherent Optical Performance
Did you miss the live event on 13 December 2017? Watch the webinar now.
OFC Career Zone — Now Open
The OFC Career Zone is where job seekers and employers from all areas of optical communications connect. Check out OFC Career Zone Online and create your account today!
Be sure to also participate in our Onsite OFC Career Zone Live at OFC, San Diego Convention Center, 13-15 March 2018.
Questions: contact firstname.lastname@example.org or +1.202.416.1942
Receive a Free Registration to OIDA Executive Forum on 12 March at OFC
Attending OFC? Add value to your OFC experience. Register to attend OIDA Executive Forum: the Premier Event for Leaders in Optical Networking and Communications.
OSA Industry Development Associates (OIDA) Members Buy 1 Discounted Registration — Bring a Customer or Colleague for Free! Special Discounts Available Through 12 February.
Hear C-Level speakers from major companies lead broad conversations on the state of the global industry, emerging trends and recommended courses of action. Attend OIDA Executive Forum to: spend one day with 200+ senior executives, connect directly with the decision-makers of the industry, participate in high-level networking, ask your challenging questions, and leave with critical information.
Raise Your Company's Profile in Front of a C-Level Audience. Sponsor the OIDA Executive Forum!
OIDA Executive Forum attracts over 200 senior-level attendees that influence the Industry. These decision makers in the optical networking and communications ecosystem will convene on 12 March to discuss the latest trends that will dominate the business landscape in 2018.
Corporate Sponsors will get first crack at promoting their brands in front of an audience of global business leaders — before the OFC Trade Show doors open! Sponsorship levels range from $10,000 to $2,500 with different levels of exposure and include registration passes to the event. For detailed information on sponsorship levels and pricing, please see page 2 of the OIDA Event Sponsorship Prospectus. Secure your OIDA Executive Forum Corporate Sponsorship today! Contact Andrew Dougherty at email@example.com or by phone at +1.202.416.1474.
New 1-Day OIDA Immersion Workshop on Scalable Integrated Photonics for 5G and IoT
11 March 2018 - Held in Conjunction with OFC in San Diego, CA, USA
Attend this workshop and get a deep look at scalable integrated photonics for 5G and IoT. Learn about new opportunities. Network with the top experts in the field. Attend five presentation sessions, one discussion session, breakfast, lunch, poster display, and special evening networking event.
This workshop will present plenary and invited talks by leading experts in the field covering the following topics:
The workshop is targeted at companies and innovators considering or already investing in integrated photonics to meet their future product requirements, and who need to understand key manufacturing challenges and how they can be addressed. Register by 12 February and take advantage of special discounts for OIDA members.
- The 5G and IoT markets as they relate to integrated photonic devices—where are the largest opportunities and where is the low hanging fruit for photonics to have impact? Overview of the high level business and technical metrics that integrated photonics needs to meet for these applications.
- Major themes and approaches used in 5G and IoT that are relevant to photonic systems. Learn about cloud radio access networks, CPRI, radio over fiber, NFV and SDN.
- In depth analysis of the major technical challenges related to scalable manufacturing, low power, and low cost of integrated photonics in emerging 5G and IoT applications. Including presentations of the state-of-the-art technologies.
- Reports from large international R&D programs on integrated photonics and their strategies for 5G and IoT.
Access Engineering and Laboratory Notes from Applied Optics for Tips from Industry Experts
Engineering and Laboratory Notes (E&L Notes) provide engineers and technicians with diverse opportunities to learn practical laboratory techniques, benefit from novel insights, and develop hands-on skills required for the design, analysis, fabrication, integration, alignment, and measurement of optical components and systems. Below, is a sampling of E&L Notes published in 2017 in Applied Optics. The below articles will be FREE to read and download for the next 30 days.
Share your techniques: Applied Optics continues to seek E&L Notes to publish. Get your techniques published in a prominent venue. Submit yours today.
Submit an OSA Senior Member Designation Request
If you are a well-established professional within the optics and photonics field, you are encouraged to request an OSA Senior Member designation in recognition of your experience and accomplishments.
Senior Member Requests are due no later than 28 February 2018. New for 2018: OSA Members can also nominate candidates for Senior Membership. Visit www.osa.org/seniormember to learn more.
Invitation to Join the 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!
Take advantage of your OIDA (OSA Industry Development Associates) Member Benefits
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|OIDA (OSA Industry Development Associates) Council
Thank you to the volunteers who oversee the programs and services available to the Industry Community.
| • Claudio Mazzali,
Corning, Inc., Chair-Elect
• Alex Fong,
TruTag Technologies, Inc.,
• John Dexheimer,
|• Amy Eskilson,
• Christoph Harder,
Harder and Partner
• Fred Leonberger,
| • Inge Kabert,
• Martin Seifert
• Debbie Wilson,