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Read about Inflation in Optics and Photonics, Special Events, New Reports, and Other Noteworthy News, Opinions & Opportunities




Is There Price Inflation in Optics and Photonics?

There is a lot of talk lately about wage and price inflation. Economists debate whether inflation is a temporary response to workforce shortages and supply chain disruptions, or if it will trigger expectations for higher prices or even "stagflation," a term referring to stagnating growth alongside high inflation. Let's look at what it means to the optics and photonics industry.

Companies are reporting delayed shipments, longer lead times and rising prices throughout the supply chain, even as the causes are not entirely clear. Suppliers are allocating shipments to preferred customers and demanding special terms, such as locking in orders for the next three years with large penalties for cancellations. These other terms can raise the cost to suppliers in the future, illustrating the leverage that some suppliers have, as they try to pass some of their increased costs and risks on to their customers.

Short term price cycles are common in the electronics industry; for example, DRAM prices go up and down with manufacturing capacity, which itself moves with demand for consumer electronics. We can expect similar behavior in the large volume manufacturing of displays, LEDs, and photovoltaics. The figure below shows prices in U.S. dollars for LCD TV panels, by size, including a forecast to the end of 2021. Suppliers began to raise prices in mid-2020 as the pandemic drove new demand for televisions. Now there are concerns about overbooking orders as long as the supply chain remains constrained, and that pandemic-driven demand may be nearly satisfied. These concerns appear to be sending prices toward pre-pandemic levels.


LCD TV panel prices and forecast, in U.S. dollars.
Source: Display Supply Chain Consultants (DSCC), 04 October 2021, with permission.

Despite the short-term price variations, long-term declines in prices are far more characteristic of, and even necessary to, optics and photonics as well as the tech sector generally. Declining prices enabled the widespread adoption of large-screen TVs, handheld smartphones, photovoltaic panels and LED-based lighting. The figure below shows the learning curve in price per Watt of photovoltaic modules, commonly called Swanson’s Law (a rate of 22.5% along the line and 39% for the period 2006-2016). As cumulative production increases over time, the cost of manufacturing declines, leading to declining prices to customers. Photovoltaic module prices increased this year, but it’s the first time in over a decade.


Learning curve of photovoltaic module average selling prices in
peak megawatts, 1979-2016. Source: NREL (22 June 2021).

Meanwhile, product performance continues to improve dramatically, even exponentially, confusing the trajectory of prices. The figure below illustrates how this works. The price for a typical product declines as manufacturers move down the learning curve. But the manufacturer also continues to release new, improved products, such as new lasers with increased output power or new image sensors with increased pixel count. Consequently, while the prices of specific products are in continuous decline, the average price of the mix of products sold in a particular year—the ratio of total revenues over total unit sales—may be steady or even rising. This also confuses the overall performance of the industry, since it is perpetually bringing out incomparable products. That's why figures of merit like US$/Watt in high-power lasers and US$/Gbps/Watt in optical transceivers are used to measure both price and performance at the same time. But those price metrics are declining too.


Prices of specific products decline over time but the average price of the mix
of products in a particular year might not. Source: Optica.

The pressure on prices means that bringing new and improved products regularly into the market is almost a necessity to stay in business in the tech industry. Competitors often face a choice: keep filling a pipeline of new, higher margin products to maintain the average sales price, or be the lowest-cost manufacturer that wins on volume. In fact, the industry’s success at reducing prices helps expand the market but is a key reason that many manufacturers exit these markets.

If the optics and photonics industry does not contribute to inflation, does inflation matter at all?

Inflation does matter because it represents the declining purchasing power of money. While often associated with the cost of living, it also means that the nominal value assigned to currency changes over time. For example, the laser market grew at a compounded rate of about 13.6% from an estimated USD 11 million in 1963 to USD 16 billion in 2020. However, the value of the dollar in 1963 wasn’t the same as it is today. It could buy different quantities of goods and labor. The 1963 dollar was essentially a different currency; USD 11 million is equivalent to nearly USD 100 million today.

We can convert the historical dollars to constant dollars to get a true rate of organic growth of the laser market. This currency conversion considers not just the inflation of a basket of goods in the currency itself, but also compared to other currencies used in the global market. When discounting for an average global inflation rate of 3.9% compounded over the period 1963 to 2020, the laser industry grew at an average compound annual rate of 9.4%, as shown in the figure below. This value is a more accurate measure of the organic growth of our industry and is still a phenomenal rate of growth over any extended period, and particularly for nearly six decades.


Global laser sales measured in nominal U.S. dollars and adjusted to 2020 dollars.
Source: Optica, from Laser Focus World data.

To summarize, the optics and photonics industry is currently seeing price increases across many products, even as prices of other products appear to be returning to pre-pandemic levels. The price variations are short-term, however; the industry has a long history of price declines that have enabled widespread adoption of optics and photonics, and drives companies to bring out new and improved products to maintain revenues. Inflation matters to optics and photonics mainly when calculating the inflation-adjusted long-term growth of our industry.

For more on this topic, see the September installment of this newsletter (here), and the May 2018 issue of Optica's Optics and Photonics News here.



Congratulations to the Luminate Finals Contestants!

The Luminate optics and photonics accelerator hosted its fourth finals award event on 30 September, with sponsorship again this year from Optica. The event featured ten startup companies along with a full program of industry leaders sharing thoughts on entrepreneurship and support for women.

Nextcorps Luminate

Luminate is the world's largest accelerator for optics and photonics. It is funded by the State of New York through its regional Finger Lakes Forward Initiative, and administered by NextCorps, a non-profit organization formerly known as High Tech Rochester. More than USD 2 million in follow-on funding was awarded at the event.

This year's winners include:

  • PreAct Technologies—crash mitigation technology
  • Andluca Technologies—UV-solar powered smart glass
  • Mesodyne—ultra-high-density power generators
  • Dynocardia—continuous non-invasive blood pressure measurement
  • Layer Metrics—metrology for 3D printing

The other contestants were:

  • 2EyesVision—ophthalmic technology for presbyopia
  • Infrascreen—optical film for energy saving in greenhouses
  • Momentum Optics—rapid manufacturing of custom optics
  • One Silicon Chip Phtoonics—inertial measurement unit using integrated photonics
  • Owl Autonomous Imaging—high definition thermal imaging

The Luminate accelerator is accepting applications for its Round 5 program through 10 January 2022. Ten companies will be selected to participate in the six-month program with follow-on funding awarded next fall.

A video of this year’s event is here.



Welcome New Optica Corporate Members










Spotlight—Women in Industry

Golshan Coleiny

Golshan Coleiny, Founder, Fundamental Optical Solutions

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 Golshan Coleiny, Founder, Fundamental Optical Solutions. If you would like to be featured in this section, please email for more information.

  • What currently excites you most about working in the optics and photonics industry?
    As Optical/light science and Photonics technology grow globally, more technologies such as medical devices, consumer electronics products and other industries benefit from Optical Engineering and Photonics technology innovations. I am so excited that my academic studies and industrial experiences led me to be part of this exciting, high-growth section of technology that many other technologies are dependent upon. These technologies are responsible for the displays on smartphones, fiber optics that carries the information on the Internet, enhanced defense capabilities, high-precision medical diagnostics tools and many more.

    Despite COVID-19 striking, causing short supplies and slow production for many industries, a new wave of Photonics-based products, on the other hand, have boosted many light/optical-based technologies in healthcare/telemedicine applications, or Lidar technology in artificial intelligent applications. Overall, photonics industries brought many products to market that improve our quality of life.

Market Update

  • What career advice would you give to your younger self?
    I think any university education is an asset for everyone to pave their career paths. My advice to youth is to be curious about everything, and learning will never end with college or a university degree. At any stage of our life, we learn something essential for our career. Therefore, being a self-learner and being motivated to discover more will always pay off.

Market Update

  • What is a hobby or passion of yours?
    I have many hobbies: painting, watercolor, going to museums/art galleries, cooking, and entertaining my friends, but my passion is to be a pilot and learn how to fly, but it is very time-consuming. I enjoy walking in the rain or playing with my cats.



Member Benefit: Plan Your 2022 Strategy with New Industry Reports Available to Corporate Members

Industry leaders worldwide are planning their strategy for 2022 and beyond. A winning strategy is driven by intelligence. Optica Corporate Members have exclusive—and complimentary—access to Optica Market Update reports. Have you downloaded our newest industry report?

Market Update

Read the latest Market Update for exclusive information on:

  • 2Q21 Optical Networking results
  • ON Forecast
  • 1Q21 Optical Components results
  • Datacom forecast
  • Data center construction

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 benefit category. We encourage you to browse the Industry Reports page on the Optica Publishing Group site to see everything available to you.



New Digital Programming Available Live and On-Demand


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.

New! On-demand Technology Showcase presentations are now available. The 4th virtual Technology Showcase, held 13-14 October, featured 26 Optica Corporate Member companies providing an in-depth look at their cutting-edge technologies. Attendees also had the opportunity to meet with the presenters and other attendees in a virtual networking space. This event is a "one-stop shop" where participants can 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 their homes or offices. View the presentations here.

Upcoming November events include:

We encourage you to browse our growing list of upcoming events and view on-demand recordings as they become available.



Invitation to Join the Optica Industry Network LinkedIn Group

Join 4,800+ of your colleagues in our Optica 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!


Link Now...



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Optica Corporate Engagement Council

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



Simin Cai

Go!Foton, Chair


Amy Eskilson

Inrad Optics, Chair-Elect


Aleksandra Boskovic

Corning Inc.


Turan Erdogan

Plymouth Grating Laboratory, Inc.


Cedric F. Lam



Anjul Loiacono



Rick Plympton

Optimax Systems, Inc.


Thomas Rettich



Debbie Wilson




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