Member News - October 2021

Industry Member News

08 October, 2021

Read about Optica, the Fall Optics and Photonics Market Outlook, Sizing the Global Market, Special Events, New Reports, and Other Noteworthy News, Opinions and Opportunities

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IN THIS ISSUE:


 

Meet Optica Corporate Membership

Optica

We are excited to announce that our organization has a new name and look—Optica, the Society advancing optics and photonics worldwide. The Board of Directors chose Optica because it transcends borders and reflects who the Society has become. It's a name that honors our past, is true to our present, and embodies our future.

This change is the result of extensive consultation with the community over the past four years. The goal was to find a name that reflected who we have become—a Society engaging with 432,000 individuals from 93% of the countries across the globe. It needed to embody our mission to be the leading forum for light science, technology and business innovation. Finally, it needed to be expansive enough to remain relevant to future generations.

With this change comes a shift away from OSA Industry Development Associates (OIDA) to our new name. We are now – Optica Corporate Membership. Our benefits, including industry reports and events, have been refreshed to reflect our new identity.

Our commitment to providing best-in-class member benefits continues undiminished. Optica Corporate Membership remains the place where innovation meets the market. You can now access more business intelligence, make more top-tier industry connections, and secure more high-impact sales and marketing opportunities to improve and grow your business. Our new and customizable corporate membership program delivers business solutions for your entire product cycle and is tailored to your company's unique needs.

For additional information about the change to Optica, there are several useful items you can review, including Frequently Asked Questions. Additionally, Optics & Photonics News (OPN), has just published a feature article, "The Story of Optica," describing how the name supports our mission to be the leading forum for light science and technology. There is also a short video that describes the evolution of the Society's new brand. Should you have any questions, please do not hesitate to contact Sakshi Sethi at industry@optica.org.

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Fall 2021 Optics and Photonics Market Outlook

In early 2020 Optica projected the short-term trajectory of the optics and photonics market given the new conditions brought by the pandemic. The pandemic has been an unprecedented personal tragedy for countless millions of individuals and their families, and devastating for too many businesses and their workers. Apart from that wider impact, however, Optica took a cautiously upbeat position for our industry in March 2020 by forecasting two years to return to the level of 2019. We're happy to report that the industry is doing better than we expected, with strong positive growth already in 2021.

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Source: Optica (2021).

The chart above presents our latest forecast by quarter, normalized to the annual production of 2019. Familiar seasonal cycles in our industry create the sawtooth shape over the period of a year. The pandemic forced the 2020 cycle to be deeper than usual, but recovery in the second half kept revenues for the year about even with 2019. As we learn about the second half of 2021, the growth rate this year could reach an astonishing 20% over 2020, in part because 2020 makes for an atypical base year as the market recovers to a more normal run rate.

There were many reasons to expect a recession once the pandemic sent the world into lockdown. In the short term, supply chains were disrupted, bringing delays and shortages that continue to this day. Longer term, we expected that the disruption and uncertainly would create a drag on industrial and consumer demand for goods and services, although it wasn't clear how much.

But by the end of March 2020, there were already indications that our industry would fare better than many others. Looking back, here are the major reasons:

  1. Factories in Asia were able to come back online relatively quickly, some as soon as the end of March 2020. This was important for our industry's customers, and to keep the global economy running.
  2. Many companies in our industry were able to keep factory operations running as government-approved essential businesses, and/or their office-based staff were able to operate relatively effectively from home.
  3. Government economic stimulus programs were effective to mitigate a widespread downward spiral in demand.
  4. It didn't hurt that the stock market has continued to favor tech companies that overlap with optics and photonics, such as data center operators (e.g., Alphabet, Amazon and Facebook), consumer hardware makers (Apple and Microsoft), industrial equipment makers (ASML, Danaher, Thermo Fisher Scientific), Tesla and startups using SPACs to enter the stock market (e.g., LIDAR companies). While such wealth doesn't necessarily spill over to other businesses in our sector, the upbeat expectations and investor exit opportunities can.

Our companies participate in many vertical markets and some markets fared relatively well through the pandemic so far. The chart below illustrates the performance of the companies we track by quarter, normalized to Q1 2019, excluding solar panel makers. In this view, machine tools, optical communications, displays and life sciences have gained over the period. (Much of the gain in machine tools are from semiconductor manufacturing tools, combined with slow metal processing tools sales in 2019 that created a low base year for this chart.) Security, lighting and consumer imaging have held approximately steady.

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Source: Optica (2021).

Optica expects continued upward growth for 2021 and beyond, but here is a list of risks that could disrupt that trajectory:

  • Continued shortages threaten to delay revenues. The auto industry is the most prominent example, but our companies report delays in a range of materials and components as wide-ranging as exotic crystals and flash lamps to the metal for heat sinks.
  • Alternatively, what happens when shortages and pent-up demand are satisfied? The display sector is a current example. Once demand is met, shortage can quickly turn to inventory, leading to falling prices and slowing sales.
  • Longer term, will government borrowing and spending drive up interest rates and inflation, and slow the economy? Interest rates are currently low, and so are payments on government debt compared to the size of the debt. But some fear that once the pandemic dissipates, taxpayers will be saddled with oversized government debt for years or even decades.

Optica's position is that the cyclical variations and risks specific to each vertical market are more profound than any general risks facing our industry. The enabling nature of optics and photonics will continue to provide intriguing new business opportunities that will help sustain growth across our industry.

For more on the market size and longer-term growth rate, see the next section.

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Sizing the Global Optics and Photonics Market

The section above reviews the short-term outlook for our industry, but what about the longer-term outlook? Optica estimates that the market will exceed USD 550 billion this year, after a slight gain in 2020. That may seem large, but optics and photonics enables downstream sectors that are far larger. Three segments alone—microlithography, optical communications and displays—enable in some way nearly the entire global economic output of USD 100 trillion.

The European Union partnership Photonics21 recently published its estimates of the global market in a report authored by the market research firm Tematys. The report drew from many sources, including Optica. The figure below compares our estimate and forecast for the global optics and photonics market with that in the Photonics21 report. Both estimates include materials, components and optical subsystems or systems, but each report defines the market differently. Consequently, differences in magnitude are not as important as the growth rate.

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Sources: Photonics21 and Optica (2021).

Optica and Photonics21 have different growth estimates from year to year, reflecting the different mix of products, but they are close in the long-term growth rates. Earlier this year, Optica estimated an average compound annual growth rate (CAGR) of 5.1% for the period 2016-2021 despite the impact of the pandemic (the value will be revised as companies report quarterly results). The Photonics21 report places it slightly greater at 5.2%. (This value is revised as companies report quarterly results.)

A 5.1% growth rate may seem modest, but it is healthy for a half-trillion dollar market. The U.S. economy averages about 2-3% annual growth in normal times, while the global economy averages only a little more, about 3-4%. This suggests that optics and photonics is growing faster than the global economy as it is adopted into more applications and more widely around the world. Can growth be faster? Yes, but not for long:

  • Strong growth is possible for a year or two, such as in the rebound after a recession, but is unlikely to continue over our entire sector for multiple years in a row. While new, emerging segments sometimes grow explosively, it's hard to grow large markets consistently year over year. For example, LED lighting sales ramped steeply as high-brightness LEDs became more affordable and substituted for other designs, but the market eventually approaches saturation.
  • If our sector is growing faster than the global economy, it may be capturing a share of the economy from another sector, which takes time. For example, widespread deployment of solar panels has gradually captured share from other energy sources, but only after decades of reductions in manufacturing costs and government incentives.
  • Profitable successes for some companies do not necessarily translate into sizeable revenue gains when aggregated across the industry. Some companies aim for low selling prices to enable new, larger volume applications. For example, VCSEL arrays enable face recognition apps in mobile phone handsets, but the requisite low prices limit the revenues that VCSEL makers can earn, even in large volumes.

Optica's estimates have to be credible and self-consistent to help validate the industry. A close look at a forecast that seems too good to be true often exposes flaws and misleads our community. Exaggerating growth to oversell the industry can backfire later if policymakers and investors perceive that the growth didn't materialize as promised. Our community looks to Optica for its honest leadership.

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Welcome New Optica Corporate Members

Fundamental
Optical Solutions

Southern Photonics

 

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Spotlight—Women in Industry

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Julia Majors, Optical Program Manager, Avo Photonics

Spotlight — Women in Industry is a monthly article highlighting emerging and seasoned female Optica corporate members in which we ask both professional and personal questions. This month features Julia Majors, Optical Program Manager, Avo Photonics. If you would like to be featured in this section, please email industry@optica.org for more information.

  • What currently excites you most about working in the optics and photonics industry?
    The seemingly endless innovation that exists in the photonics industry has always excited me—there are always opportunities to develop newer and better technology to improve people's lives. And because that drives so many of us in this industry, there are always great people to work with in finding and solving these new, exciting problems.
  • What career advice would you give to your younger self?
    As long as you're working on something challenging, have patience that any failures are lessons that will only help in the future.
  • What is a hobby or passion of yours?
    Studying and practicing Brazilian Jiu Jitsu has been a passion of mine for more than 10 years.

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You’re Invited! Free Virtual Technology Showcase—a Unique Product Presentation & Networking Event

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Looking for new products for your organization, information about the latest technology and an opportunity to connect with colleagues and industry leaders? Join us online 13-14 October from 09:30 EST (UTC – 04:00) and get an in-depth look as Optica corporate member companies present and explain their cutting-edge technologies. How Does It Work?

The Technology Showcase is a 2-day program, consisting of two parts:

  • Showcase PresentationsParticipating companies will present their latest products and technologies. This will be followed by a brief Q&A session, where you'll have an opportunity to ask your questions to the speakers directly.
  • Networking—Join participating company representatives in a virtual networking space to meet face-to-face and make new connections. Networking will be available both days for the duration of the full program.

View the schedule and register for access to all the sessions, then pick which presentations you want to attend—there's no travel, no jetlag, just plenty of information! This event is your "one-stop shop" to learn about new technology trends, see the latest products and solutions and connect directly with our industry's leading manufacturers—all free from the comfort of your home or office.

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New Digital Programming Available Live and On-Demand

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What are your optics and photonics interests? Our digital library has something for everyone. Optica management and Optica corporate members have produced a series of webinars and virtual Technology Showcases that are available at no charge. Our curated playlists feature global thought leaders, optics and photonics pioneers and industry icons, offering actionable advice, information and inspiration.

Upcoming October events include:

  • Sponsored Webinar: A Simulation Environment for QKD Systems and Co-Existing Classical Channels, 6 October
  • Innovation in Optics: A Zemax Perspective, 07 October
  • Sponsored Webinar: The Harsh Realities of Testing Ruggedized Fiber Assemblies, 12 October
  • Optica Technology Showcase, 13-14 October
  • Concepts of Optical Communication Systems, 13 October
  • Beyond Academia: Connecting Industry with the Next Generation of Leaders, 13 October
  • Sponsored Webinar: How to Improve the Signal Acquisition for Optical Measurements, 19 October
  • Sponsored Webinar: Accurate Laser Measurements: Why, When, and How, 20 October
  • From 5G to 6G: Challenges and Opportunities, 21 October
  • From PhD to CEO: Making An Exciting Leap Into Business with Michele Lacerenza, 28 October
  • And more!

We encourage you to browse our growing list of upcoming events and view on-demand recordings as they become available. And there is much more! Check out the Optica We Are On webpage for more high quality webinars on career development from the Optica Foundation and the Optica Career Lab.

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Congratulations Infinera Optical Innovation Team - 2021 Paul F. Forman Team Engineering Excellence Award Winner

Infinera

Infinera's Optical Innovation Team, USA, received the 2021 Paul F. Forman Team Engineering Excellence Award "for the design, development and commercial deployment of a vertically optimized 1.6Tb/s (2x800G) digital coherent optics module, comprised of a large scale photonic integrated circuit, advanced high-speed RF packaging and pioneering real-time DSP ASIC". Learn more.

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OFC 2022 Will Reunite the Global Community with In-Person Exhibits and Digital Content!

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OFC is excited to announce that we will once again host the world's largest live, in-person exhibition for optical networking and communications. This is where the industry can come together, safely, to showcase cutting-edge technologies, collaborate and conduct business. Content will also be streamed globally, providing you with new sponsorship opportunities to expand your reach.

No other event connects you with more of the professionals you aim to reach. Learn more about exhibit and sponsorship opportunities today.

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Market Update Reports Now Available to Optica Corporate Members

Read the latest Market Update for exclusive information on:

  • Optical network bandwidth update
  • Data center compute, and
  • 5G fixed wireless access

Stay on top of the latest optics and photonics market insights, news, roadmaps and research. Read our reports today and get the information you need to make better business decisions faster.

Other reports include:

Optica Market Update reports are available to all employees of Optica corporate member companies who selected the Market Intelligence & Advocacy benefit category. We encourage you to browse the Industry Reports page on the Optica Publishing Group site to see everything available to you.

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Questions or Suggestions about Optica Corporate Member Benefits?

We are committed to ensuring the value of your Optica corporate membership, so please email Optica corporate membership if you have any suggestions for new programs or comments on your membership.

Forward this message to your colleagues.

Not yet a member? Learn more about the benefits of membership.

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Optica Corporate Engagement Council

Thank you to the volunteers who oversee the programs and services available to the Industry Community.

 

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Simin Cai

Go!Foton, Chair

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Amy Eskilson

Inrad Optics, Chair-Elect

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Aleksandra Boskovic

Corning Inc.

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Turan Erdogan

Plymouth Grating Laboratory, Inc.

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Cedric F. Lam

Google

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Anjul Loiacono

ColdQuanta

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Rick Plympton

Optimax Systems, Inc.

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Thomas Rettich

TRUMPF

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Debbie Wilson

Lumentum

 

 

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OPTICA
Global Headquarters
2010 Massachusetts Ave. NW
Washington, DC 20036
USA

+1 202.416.1907

optica.org

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