Global Machine Tool Revenues Expected to Decline 10% to 2017 Levels
Companies selling laser and other optical products into the global machine tool sector should expect a decline in sales in 2019 near 10%, compared to 2018. This would place this year's sales for components and systems in the category near the value for 2017, second only to 2018, according to OIDA's mid-year forecast.
Source: OIDA (2019)
This continues to be a 'half full and half empty' market for companies in this sector. Sales are off from the peak, but it is mid-2019 and the economy is holding. Many economic indicators in the U.S. are nominally very good, such as record low unemployment and low inflation but economists warn that the economy is fragile, and particularly vulnerable to repercussions from trade disputes, Tom Hausken, PhD, OSA Senior Industry Advisor notes. A large part of the growth in recent years has been to Chinese customers, with sales by prominent laser companies to China as much as 43% of company revenues, making them especially exposed in a trade war. Investors reacted in 2018, and the share prices of some companies in the sector were driven down by 50% or more.
OIDA monitors over two dozen companies in the sector, and tracks quarterly results of a group that have combined revenues over US$ 40 billion annually. OIDA's index indicates a stronger decline than usual in Q1 2019, falling 14% from the previous quarter, following weakness in the second half of 2018. OIDA expects quarter-over-quarter growth in Q2, but sales in the second half are unlikely to match the levels of 2018.
Longer term, OIDA expects compounded growth in the range of 5%, slightly greater than global economic growth. But current conditions may delay a return to growth until after 2019, or possibly after 2020.
More information appears in the June issue of OIDA's OIDA Market Update, available to OIDA members.
Brexit, the E.U., and Photonics: an Update
It's not just the U.S. that's going through an interesting political phase. Europe is too. OSA's Stewart Wills examined the issues and implications for our industry in a June article for OSA's Optics and Photonics News. Among important developments are the recent European parliamentary elections, upcoming decisions on the E.U. R&D budget, the ongoing Brexit negotiations, and international trade issues extending to the U.S. and China. There is a feeling like never before that anything can happen. However it falls out, it will impact the optics and photonics industry.
OIDA wrote about the potential consequences of Brexit in the July 2016 OIDA newsletter. The article at that time considered issues around company relocation, recruiting talent, R&D spending, currency exchange rates, and so on. But it's three years later, and the actual Brexit hasn't been negotiated, much less executed. Some are now wondering if the mandate, such as it was, will simply turn into a stalemate and expire. Meanwhile, the consequences are mixed so far: the figure shows the value of the British pound, in U.S. dollars. In 2019, the value is down 12% from 23 June 2016, when the vote was held, and 24% from its peak five years ago, in 2014. But the value is now approximately unchanged from late 2016.
Source: OIDA (as of 19 June 2019) from average daily interbank exchange rates.
Meanwhile on 17 June 2019, Photonics21 released a position paper calling for the European Commission to double the funding of the photonics unit of the Key Enabling Technology (KET) program to €200 million per year over the period of the next E.U. research program. That program, called Horizon Europe, will span the seven years from 2021 to 2027. It points out that SMEs—small and medium enterprises—have in the past matched the European Commission funding of 5:1. It also claims that the photonics SMEs are committed to invest up to €100 billion in R&I (research and innovation) in Europe throughout the period. Such an investment would amount to an average of as much as €14 billion per year from the SMEs, which are important but comprise only a small share of overall revenues and R&D investment. The paper does not provide details on how it came to that extraordinary figure, nor the sources of figures on public investments in China and South Korea, but the Photonics21 partnership quite deservedly has been rated as "best in class" by an independent expert group of the European Commission.
For the 19 June 2019 OSA Optics & Photonics News article on Euro-photonics, see here. See also recent comments about Photonics21 in the May 2019 issue of the OIDA newsletter.
Update on AIM Photonics Academy: Courses, 200K TED-Ed Views, and More
The AIM Photonics Academy has been busy, with some remarkably good TED-Ed videos on integrated photonics and upcoming summer programs. The AIM Academy is the roadmapping, education and workforce development part of the AIM Photonics institute. There isn't room here to review all the many activities that AIM Academy is doing, much less the entire institute, but here are some highlights.
- The Summer Academy runs 22-26 July 2019 and will cover the gamut of topics in integrated photonics: materials, devices, design software and circuit design, chip fabrication, packaging, testing, and system applications. For more information and to register, see here.
- The Academy has produced three TED-Ed videos about photonics and the Internet, self-driving cars, and medicine for a general audience. The videos have each been viewed over 200,000 times, and are both technically accurate and entertaining. See for yourself here.
- AIM Academy also offers online courses. Its Spring 2019 course had over 1,500 registrants, and ran for six weeks starting 9 April. See here.
- The Integrated Photonics Systems Roadmap (IPSR) is now part of an international effort, IPSR-International. There are four meetings planned yearly, this year in Japan (January), California (March), Berlin (June), and Boston (October). OIDA attended and gave a presentation at the March workshop, held at Lockheed Martin's facilities in Sunnyvale, California on 20-21 March.
- There's much more, such as a technician certification program planned for 2020, to name just one of many projects.
Attendees of the 2018 AIM Photonics Summer Academy. Source: AIM Photonics Academy website.
There's much more, plus all the many activities of the AIM Photonics institute. OIDA serves on the AIM Photonics Academy advisory committee, and has been involved in the effort that led to AIM since 2012. OIDA last reported on the AIM Academy in the January issue of the OIDA newsletter, on the IPSR-International roadmapping meeting.
Welcome New OIDA Members
RSVP for OIDA Member Benefits Orientation Webinar on 10 July
RSVP for OIDA's member benefits overview orientation webinar on 10 July at 13:00 EDT. This is an opportunity to learn about key membership benefits you and your company should be taking advantage of and explore how to maximize performance and grow your business.
Whether you have been an active member for years or you are new to OIDA — this orientation is a must-attend! Please feel free to share this with your colleagues. When you join OIDA, everyone at your organization becomes a member.
Read New Interview with OIDA Member ALPAO about Their Business and The Value of OIDA Member Benefits
OIDA member ALPAO, based in Montbonnot, France, manufactures adaptive optics components and systems. It was founded in 2006 with the introduction of a low speed deformable mirror. Most recently, it has supplied all of the deformable on telescopes at CHARA Array and a state-of-the-art high order DM to supply Observatoire de Paris. Its products include very rapidly deformable mirrors with large strokes, wavefront sensors, and complete adaptive optics loops. They are specially designed for various applications such as vision science (ophthalmology), astronomy, microscopy, defense and space, FSO, laser and physics, and microelectronics.
Here OSA talks with ALPAO General Manager, Vincent Hardy, about his career and ALPAO's work in adaptive optics.
Read the interview.
Registration is Now Open for the OSA Laser Applications Conference
29 September - 3 October 2019, Austria Center Vienna, Vienna, Austria
The Laser Applications Conference (LAC) is an all invited speaker format for industry in Laser Applications at the OSA Laser Congress. This 3-day meeting focuses on two main topic areas — Materials Processing and Applications for High Power Lasers. Register now to:
- Keep Current — Hear Leading Experts in the Field: One registration provides access to all Topical Meeting programs, including the plenary session, technical sessions, posters and post-deadline papers.
- See the Latest Technology: 70 companies from industry, universities, research institutions and national labs are expected to showcase their products and services at the OSA Laser Congress Exhibition.
- Collaborate and Network: The exhibition, a reception and beverage breaks encourage and support meeting with your peers and colleagues. Panel and open discussion sessions will be included to facilitate a forum for a free exchange of ideas.
- Get In-Depth Training at Short Courses: Short Courses are complimentary for Laser Congress attendees.
- Gain Early Access to Content: Access the printed program and digest papers one week before and perpetually afterward in OSA Publishing's Digital Library.
Special Discounts for OIDA Members on FiO Exhibit Space
OIDA members receive an exclusive 15% off both booth and tabletop options at OSA Frontiers in Optics and Laser Sciences APS/DLS. Space is filling up, with 80% of 2018 exhibitors rebooking for 2019. View the floor plan here and reserve your space today.
Special Opportunity—Promotion of Engineering Teams
Don't miss this opportunity to gain recognition and promotion for your optical engineering team(s). This is the final call for nominations for the 2019 Paul F. Forman Team Engineering Excellence Award, which recognizes team technical achievements such as product engineering, process and software development, and patent development, as well as contributions to society such as engineering education, publication and management, and furthering public appreciation of optical engineering.
Promotion of winning teams includes:
- Special recognition in OSA's magazine, Optics and Photonics News
- A dedicated press release
- Outreach on OSA social media channels
- Recognition during Frontier's in Optics (FiO), OSA's annual meeting
- Participation in the FiO Awards Ceremony and Reception
- Recognition in trade magazines, journals and/or conference publications
Submission Deadline: 10 July.
You're Invited: OSA Member Reception in Sapporo, Japan
Friday, 20 September, Sapporo, Hokkaido, Japan
Please join OSA 2019 President Ursula Gibson at an OSA Member Reception on 20 September in Sapporo, Hokkaido, Japan. For more information and to RSVP, email RSVPOSAevent@osa.org. This event is co-located with the OSA/JSAP Joint English-language Symposia and Japan Society of Applied Physics (JSAP) Autumn Meeting.
Invitation to Join the OIDA Optics and Photonics Industry LinkedIn Group
Join 3,000+ 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!
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 Research &
Development Corp, Chair
• Simin Cai,
Go!Foton, Chair Elect
• John Dexheimer,
LightWave Advisors, Inc.
• Turan Erdogan,
• Amy Eskilson,
• Christoph S. Harder,
• Inge Kabert,
• Frederick J. Leonberger,
EOvation Advisors LLC
• Debbie Wilson,
Lumentum Operations Inc.