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Optica's Mid-Year Optics and Photonics Forecast

We've all been waiting for the pandemic to end so that we can go back to the way things were, but now it's clear that there is no going back. Too much has changed. And the optics and photonics industry will have to change too.

The figure below shows the revenues through Q1 2022 of companies that Optica tracks organized by sector, excluding solar energy. With only Q1 reported so far, it's too early to know how this year will fare, and the downturn in revenues in Q1 is indicative of the usual seasonal behavior. (It is also the norm across entire economies, which is why economic data is usually seasonally adjusted.)


Source: Optica (11 May 2022).

So far, we can still expect a strong year for 2022 given strength across several sectors. The semiconductor industry is likely to continue to build out capacity regardless of the ups and downs of the current market. The same is true for optical communications as cloud service companies address an expanding market. The market for military applications may actually increase over the forecast this year, as countries replenish or stockpile equipment in a period of increased geopolitical tension. For example, member countries in the NATO alliance may increase military budgets to meet the goal that they each spend a minimum of 2% of their gross national product on defense.

The next figure illustrates our current forecast, which is essentially unchanged from the fall, compared to our forecast before the pandemic. We still expect that overall revenues for our industry will end up above what was expected for this year in our 2019 forecast.


Source: Optica (11 May 2022).

However, optics and photonics companies don't just want to be ahead of where we were expected to be by now, over two years and a pandemic later. Even a slight miss from their target for 2022 could be bad news, if they made large investments or hired staff to hit the targets.

The greatest risk now is that the global economy may tip into a recession, if consumers and businesses trim spending. The optics and photonics industry has substantial momentum; demand exceeds supply. But that can turn quickly; even a slight pause could create a "bullwhip effect" that impacts companies upstream in the supply chain. There are several forces that can combine to do this:

  • Continuing lockdowns, such as in China, tangle supply chains just as many countries are emerging from many of the pandemic restrictions. China's economy may even fall into recession as a result of its strict dynamic zero COVID policy. Moreover, the Chinese government may continue its risk-averse policies until it gets past its meeting of the 20th National Congress of the Chinese Communist Party in October.
  • Inflation stifles consumer spending and evolves into a longer-term cycle of wage and price "stagflation" that slows economic growth.
  • Economic conditions send countries into default, as they spend down currency reserves amid rising prices of imports and interest rates.
  • Changing geopolitical and trade alliances drive companies to rearrange into new trading blocs.

These are risks, however, not certainties. Even if there is no going back to the way things were before the pandemic, the hope among policymakers is that the pandemic and geopolitical tensions will subside soon, and that the economy will self-correct to a new normal. Our industry can remain strong by continuing to be agile in sourcing parts and workers and adjusting to changing market needs and trade alliances.



Meanwhile, About Optics and Photonics Stock Prices

Public stock prices provide a forward-looking perspective by quantifying expected future company earnings. The next figure shows an index of equally weighted stock prices based on a basket of U.S. optics and photonics-related companies selected by John Dexheimer for Laser Focus World (here). The index showed strong growth through the pandemic but declining so far this year. It tracks with the NASDAQ Composite Index (in grey) because of the overlap of both to the tech sector.

The figure also shows the NASDAQ Capital Market Index (in red). It comprises early-stage public companies, such as so-called SPAC companies that entered the market over the last two years. These include pure-play companies selling LIDAR equipment and quantum technology. These company stocks exhibited strong growth in late 2020, followed by strong decline beginning in 2021, erasing all of the gains in the index since before the pandemic. The brief popularity of SPACs as an entry to the public stock markets offers many advantages, but the stock prices of companies that used that route are now being punished when they are most vulnerable.


Source: Optica (24 May 2022).

Collectively, stock prices move with three major factors: company earnings, interest rates, and customer sentiment. The first, earnings or net profit, have been trending upward since the beginning of the pandemic as consumers shifted their purchasing from services to goods. Technology companies benefitted especially from this shift. In 2022, however, consumers have returned to purchasing more services as the pandemic wanes in major economies. For this and other reasons, earnings of technology companies have declined.

Second, interest rates are creeping up after years of very low rates, and that threatens to slow investment and raise the cost of debt. The next figure shows the U.S. Federal Reserve Bank effective federal funds rate from 1 January 2000 to mid-May 2022. The vertical grey bars indicate recessions. The bank dropped the rate in the pandemic to reduce borrowing costs to support spending. The bank is now aiming for a higher rate to slow inflation without raising borrowing costs so much that it slows the economy.


Source: Board of Governors of the U.S. Federal Reserve System (23 May 2022).

The third factor, sentiment, means that the stock market guesses how customers—consumers and businesses—will spend money. But while the first two factors are more quantitative, and even sometimes within the control of companies (for example, if they have strong earnings or large cash reserves), the third is more speculative. When will international business travel return to pre-pandemic levels? What does the war in Ukraine mean for oil and grain prices and political stability in oil and grain importing countries? Will companies slow spending on advertising on Facebook and Twitter? Has consumer and business spending on electronics peaked?

Experts agree on one thing: stock prices will show high volatility for the time being. In other words, expect a roller coaster ride.


Source: Dave Carpenter, Cartoon Stock



Announcing Optica’s First Online Industry Meetings

You are invited to participate in an important series of 5 complimentary online meetings about issues that will impact the future of your business and our industry.

End-users drive our industry: Photonics is radically colliding with other industries to create opportunities for entrepreneurs to reshape many sectors in new, impactful ways never imagined. These monthly sessions are a top-level "deep-dive" industry discussion for the next 3 -5 years. Over 2 hours, you’ll gain unique insights into the mid-term roadmap. The meetings will have an active involvement by end-users to give more meaning to both suppliers and their clients.

Mark your calendar and participate in these 5 must-attend online meetings:

  • 29 August 2022—LIDAR 2.0 Miniaturization
  • 27 September 2022—New Ultrafast Laser Applications
  • 25 October 2022—Photonics Packaging, Assembly and Testing
  • 22 November 2022—Automotive Lighting
  • 17 January 2023—Photonics for Medical Devices

If you're looking for new business development opportunities and strategic information for your mid-term roadmap then don’t miss this unparalleled opportunity to shape the future of your business and our industry.

Registration is free and opens in mid-June. Accelerate discovery. Amplify returns.



Welcome New Optica Corporate Members

We are excited to welcome eighteen new companies who are partnering with Optica to advance optics and photonics worldwide. Optica corporate membership—where innovation meets the market.























Exclusively for All Optica Members—Receive 25% Discount on Registration for PIC International Conference 2022


We have fantastic news! We have partnered with PIC International and can offer all of our Optica Corporate Members and Individual Members a 25% discount on the registration fee. PIC International Conference is the leading industrial event focused on Photonic Integrated Circuits technology and applications. To utilize the discount use Code: OPTICA25



Spotlight—Women in Industry


Jimena García-Romeu Nuñe, CEO, Alcyon Photonics.

Spotlight—Women in Industry highlights female Optica Corporate Members who share their thoughts on both personal and professional issues. This month features Jimena García-Romeu Nuñe, CEO, Alcyon Photonics. 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?
    The power of photonics to impact people’s lives! Our industry sits at the heart of communications, boosting connectivity with a sustainable proposition. And this is just a first sight of what it is still to come. Photonics is expanding its reach to new applications (biosensing, quantum, lidar…), making human life easier, enabling new businesses and contributing to a more sustainable world.
  • What career advice would you give to your younger self?
    Pick your battles and teammates. Keeping focus, being supported, and having some fun at work are key to projecting success and personal growth. We spend a lot of time and energy at work, and it pays off to make it both efficient and personally rewarding.
  • What is a hobby or passion of yours?
    Light and color also fill my leisure time, my personal passion is visual arts, especially painting. I get relaxation and delight from early masters to contemporary painters. And, obviously, as a good Spaniard, eating out with friends and family.



View the Recordings from the Optica Technology Showcase

You can now view on-demand presentations from the Optica Technology Showcase live event that took place 13-14 April 2022. Watch now and see the latest technology innovations from 19 leading Optica Corporate Members. Learn about new technology trends and see the latest products and solutions—all free from the comfort of your home or office. Watch now.



New Infographic Brochure is Now Available on How Optics and Photonics Impacts the Economy


Optica's complimentary new brochure, Optics and Photonics: The Impact on a Global Economy, summarizes the optics and photonics industry in colorful graphics, for presenting to policymakers, investors and anyone seeking to know more about our industry.

It illustrates the key vertical markets, the phenomenal growth rate of laser sales over 60 years, production by region, the impact on jobs worldwide and more.

Download the brochure now.



Nominate a Colleague for the Herbert Walther Award

The Herbert Walther Award recognizes distinguished contributions to quantum optics and atomic physics and leaders in the international scientific community. Please consider nominating a colleague for this prestigious award. This award is co-presented by Optica and Deutsche Physikalische Gesellschaft (DPG).

Submission Deadline: 30 June



Nominate a Colleague for the John Tyndall Award

The John Tyndall Award recognizes outstanding contributions in any area of optical-fiber technology, including optical fibers themselves, the optical components used in fiber systems, as well as transmission systems and networks using fibers. Contributions may be experimental or theoretical. Please consider nominating a colleague for this prestigious award. This award is co-presented by Optica and IEEE Photonics Society and supported by Corning Incorporated.

Submission Deadline: 10 August



Invitation to Join the Optica Industry Network LinkedIn Group

Join 5,000+ 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...



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.



Optica Corporate Engagement Council

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



Amy Eskilson

Inrad Optics, Chair


Simin Cai

Go!Foton, Past Chair


Aleksandra Boskovic

Corning Inc.


Cedric F. Lam



Michael Lebby

Lightwave Logic, Inc.


Anjul Loiacono



Rick Plympton

Optimax Systems, Inc.


Thomas Rettich



Natarajan ‘Subu” Subrahmanyan

AO Asset Management


Reinhard Voelkel

SUSS MicroOptics


Debbie Wilson






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