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Read about the Effects of the Pandemic and Supply Chain Issues on Our Industry, Events, New Reports, and Other Noteworthy News, Opinions & Opportunities






Are Prices Settling Down?

Inflation is all over the news, but when Optica talked to optics and photonics companies we heard a different perspective than what is portrayed in the business media.

Let's start with the basics. The figure below shows the U.S. producer price index (PPI) for total manufacturing industries and the consumer price index (CPI) for over three decades. This particular PPI tracks prices received by domestic manufacturers, such as U.S. optics and photonics manufacturers. The CPI tracks what consumers pay for goods and services. The chart shows how the manufacturer prices are more volatile than consumer prices.

Source: Optica, based on U.S. Bureau of Labor Statistics (17 February 2022).

As of January 2022, manufacturer prices jumped over 15% from the year before, and consumer prices rose by 7.5% from the year before—the annual inflation rates. Policymakers aim for modest and steady inflation but the supply chain challenges of the pandemic and spending from government economic stimulus programs eventually pushed prices up faster than desired. This puts pressure on consumers, particularly those with low-and fixed-incomes, and the higher prices could trigger a more permanent and vicious cycle of rising wages and prices.

Upon closer examination, however, the worst may be already over. The next figure shows the month-over-month change in the CPI and manufacturing PPI since January 2019; that is, the inflation rate measured on a monthly basis. Monthly inflation peaked in early 2021 and again in late 2021. Both indexes rose in January 2022, but inflation may be settling back to a more normal pace.

Source: Optica, based on U.S. Bureau of Labor Statistics (17 February 2022).

The key price indexes are driven in part by factors that don't apply to optics and photonics companies. For example, optics and photonics companies told Optica that transport is not their biggest challenge; in fact, transport was hardly mentioned as a concern at all. But constraints in the supply chain due to congested shipping lanes have contributed to rising prices across the entire economy. The South China Morning Post reports that the average door-to-door shipping time for a container from Shanghai to Los Angeles increased steadily through 2020 and 2021, to an average 80 days in December. There is good news, however; the wait time at Los Angeles harbor has declined substantially, from wait times of over a month as recently as early January to as few as four days (counting both the anchor and berthing times) in late January and February.

Prices have already peaked in key optical products. As we noted in the November issue of this newsletter (here, and updated figure below), the market research firm DSCC reported that display prices peaked in 2021, and as predicted, have settled to lower levels in early 2022. The reason is that inventories have returned to normal levels, as demand for displays is now constrained elsewhere in the supply chain. Also, the surge in demand from the pandemic is now becoming satisfied, and the sector is going through its normal seasonal cycle of slowing demand at this time of year. DSCC expects the current trend to continue into mid-2022.

LCD TV panel prices and forecast, in U.S. dollars
Source: Display Supply Chain Consultants (DSCC), 7 February 2022, with permission.

Observers who track prices of solar cells, image sensors and memory chips also report slackening demand and falling prices. This suggests that these volume products are returning to their long-term ever-downward trajectory of prices, particularly when adjusted to constant dollars.

Our members are concerned about having to pay higher prices for their materials and components, but it's not necessarily their main concern. One member said that they would gladly pay higher prices to chip foundries to get faster access to key electronic components, but the suppliers simply wouldn't expedite such an order because the orders are too small.

Where higher costs are a concern, optics companies may be able to maintain profit margins by raising the prices they charge to their customers, but it must be done with care. One member said that when discussing prices with customers, they are transparent about how their own costs have risen, to maintain trust with the customer. She said that raising prices more than necessary to take advantage of the short term situation is a strategy that can backfire. Another member said that their company was seeking instead to keep the prices they charge stable in order to gain market share over competitors. Display manufacturers showed clear gains in profits last year when inventories were low, but they are in a position that most optics and photonics companies are not.

More often, optics and photonics companies point to the workforce shortage as their primary challenge, along with the usual concerns over sector demand, trade conflicts, and more. Optica's data suggest that the profit margins of major optics and photonics companies are relatively steady through the pandemic, at least up through recent months. If manufacturing costs are rising, they don’t seem to be harming the profits of our companies.

To learn more, see the slides from our webinar on 02 February 2022, when we talked about supply chains, pricing, the market, and an update on public policy affecting our industry. See also the November issue of this newsletter, here, and other previous issues.



Stock Prices Two Years Later

Two years into the pandemic, how did optics and photonics companies do in the stock market? The declines in stock prices early this year have erased value from many companies for reasons beyond their control. But many companies in our sector navigated the pandemic relatively well.

The figure below shows an index of equally weighted stock prices of U.S. photonics companies based on a basket of optics and photonics-related companies selected by John Dexheimer for Laser Focus World (here). The index has outperformed even the NASDAQ Composite Index, which is concentrated in technology companies that have performed well in recent years. Both far outperformed a 7% compound annual growth rate, which is considered a healthy long-term return for stocks. The specific performance is not important, but the strong upward trajectory is. It suggests that the financial markets value these companies going forward.

Source: Optica (16 February 2022).

Several companies with particularly strong performance are driving the indexes higher. Some examples are shown in the next figure. Tesla's stock price soared 10X as of this writing, even after losing about 25% of its value from its peak late last year. NVIDIA jumped 4X, Apple and ASML doubled in value, while Fabrinet and Pfizer gained about 50% over their values before the pandemic. These results and those of other strong tech companies raise the value of any index that includes them in its portfolio.

Source: Optica (16 February 2022).

Other companies haven't done as well. The figure below shows the history of the stock prices of two companies that we mentioned in previous issues of this newsletter since the pandemic began (here and here).

Source: Optica (16 February 2022).

Zoom Video Communications (ZM) was well-positioned before the pandemic, offering easy-to-use video services to employees sent to work from home and students studying remotely. Zoom was able to scale with the extraordinary surge in demand, from 10 million average daily participants in 2019 to 300 million in April 2020—a surge of 30X. At this writing Zoom’s stock price is more than double its value of early 2020, but it has taken a wild ride.

Peloton Interactive (PTON) was likewise well-positioned to offer subscriptions to its exercise equipment for people isolated at home, calling itself an exercise equipment and media company. But Peloton was challenged to ship new equipment to meet demand, leading to delayed revenue and cancelled orders. When demand slowed, it was stuck with a massive surplus of inventory. It also recalled an equipment model, offering customers a replacement or full refund.

The stock performance of publicly-traded optics and photonics companies are widely distributed between these extremes. The decline in stock prices that has swept the market in recent months has also affected our industry. As they say, "individual results may vary."



Welcome New Optica Corporate Members





Spotlight—Women in Industry

Aleksandra Boskovic, Research Director, Corning Incorporated, and her family enjoying a hike.

  • What currently excites you most about working in the optics and photonics industry?
    I think that now is a fantastic time to be working in optics and photonics. While each field has a strong foundation, there are new things to discover every day. In addition, the problems we are trying to tackle today are so complex that nobody can solve them on their own. You need to look at things from different angles and join forces with other areas of expertise, and that is very exciting. I believe there is a long road ahead for optics and photonics discoveries to continue.

  • What career advice would you give to your younger self?
    Never stop being curious and continue to dream. I have seen many people limit their possibilities because they focus on how they might fail and feel hesitant to take risks. In your career, as well as in science, it is important to think about how to make things possible, and persevere, even if the odds are not in your favor. Find allies, advocate for yourself and work hard towards your goal!

  • What is a hobby or passion of yours?
    I love to travel and cook with my husband and two children. We try to take vacations together every year and discover a new part of the world. Planning where to go and what to do is also part of the fun and we always make sure we learn at least a few words in the local language ahead of time. And as we come back we always end up trying to replicate some of our favorite foods at home!



Executive Forum at OFC on 07 March—Last Chance to Register

Keynote Keri Gilder, CEO, Colt Technologies

This opportunity comes only once a year. Join business leaders and technology experts from major global organizations on 07 March at Optica Executive Forum. This premier event for leaders in optical networking and communications will be held at the Hilton San Diego Bayfront Hotel. Executive Forum will be held in conjunction with OFC, the world's largest event for optical networking and communications professionals.

Registration includes a keynote presentation, four panel discussions and a business fireside chat. Register now to attend:

  • Featured Keynote Presentation: The Modern Telco, Keri Gilder, CEO, Colt
  • Business Fireside Chat Panel: Just in Time or Just in Case: Building a Resilient Supply Chain in a Post-COVID World
  • Panel 1: Subsea Cable
  • Panel 2: Fixed Access Solutions to Incorporate Business Perspective: Focus on Funding, Can Tech Keep Up With Investments?
  • Panel 3: Near-Packaged, Co-Packaged, and Pluggable Optics: What's Their Future in the Data Center?
  • Panel 4: Operationalizing Coherent DWDM Optics in Increasingly Diverse Deployment Environments
  • Networking Events: Breakfast, Lunch and Evening Reception

View the program, meet the speakers and register now. One low registration rate provides full access to the program and networking events. Discounts are available for each colleague you register, and Optica Corporate Members who have selected our Networking & Events benefit category can bring a colleague for free!



Quantum Technologies: Where Are We At? New Virtual Optica Workshop

Register now for our upcoming online workshop "Quantum technologies: Where are we at? Updates on commercial viability, scaling challenges and technical progress." which will focus on the manufacturing of quantum photonics, emphasizing integrated photonics. The workshop will explore in particular novel quantum communication networks, from interconnects for very-short-reach quantum computing cores to quantum networking in longer haul terrestrial networks and satellite networks. Topics covered include:

  • What are the requirements?
  • How soon will these technologies carry revenue-generating traffic?
  • Are there "gaps" in the technology?
  • Where does integrated photonics promise to fill a gap, or at least offer an alternative solution?
  • How far along is the R&D?
  • What are the material and processing needs?

The schedule is spread over two half-days to accommodate live participation across a wider geographic range. We look forward to an engaging discussion among the panelists. And we hope the workshop will build on the Optica Quantum Photonics Roadmap: Every Photon Counts. To download the roadmap, click here.

View the schedule, see the speakers and register today.



Applied Industrial Optics Meeting (AIO) Submission Site is Open

Be part of the prestigious and comprehensive AIO technical program, and ensure that your research is seen by an influential audience. Presenting at AIO provides the opportunity to showcase your work to leaders in your field, and to expand your network of professional connections.

AIO is a multidisciplinary meeting that focuses on innovative photonics research and its commercial impact — bringing together industry professionals with experience in overcoming the challenges of deploying and commercializing new products with researchers developing cutting-edge technology.

Learn more about the meeting and submit your paper by 23 March.



Now Available: Optica Market Update: The Outlook for Supply Chains, Pricing, Profits and the Market in 2022

This presentation provides an update on the optics and photonics market, from a webinar on the topic held on 02 February 2022. The webinar reviewed Optica Industry's latest findings from our conversations with companies and our data collection effort. There has been a lot of talk about supply chains and pressure on prices, but what does it mean for the optics and photonics industry? Are some sectors affected more than others? How does it impact the markets? The webinar also discussed some of the funding and policy issues that will matter to our industry with Optica’s Senior Director of Government Affairs David Lang.

Optica corporate members can view this presentation online here:



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!

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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.

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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



Anjul Loiacono



Rick Plympton

Optimax Systems, Inc.


Thomas Rettich



Natarajan ‘Subu” Subrahmanyan

AO Asset Management


Debbie Wilson





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