Optical coatings: Designs for growth

Caren B. Les, caren.les@photonics.com

Innovation is critical for revenue growth in the optical coatings industry, according to the market analysis firm BCC Research. New applications, where coatings have a new advantage, represent the fastest growth markets for the industry, according to the company, which published the report Optical Coatings: Technologies and Global Markets in October 2009. The total global market for optical coatings is estimated to rise from 4.6 billion in 2010 to 5.7 billion in 2015, with a compound annual growth rate of 4.3 percent, according to the report.

Electronics, the largest market segment for the coatings, is projected to increase from 2.6 billion in 2010 to 2.8 billion in 2015, with a compound annual growth rate of 2.1 percent. Defense/security and architecture, the second- and third-largest segments, are expected to have compound annual growth rates of 3 and 4.5 percent, respectively.

In descending order, the smaller solar, medical, telecommunications, transportation and “other” segments are projected to have compound annual growth rates of 10, 12, 7, 12.8 and 4.3 percent, respectively, during the five-year period, according to the company.

“Lighting technology is on the verge of a significant technological transition as incandescent lighting is replaced,” said Lori Weisenbach, author of the report. “Optical coatings and filters will play a role in producing new lighting options. Flat screens on televisions, cell phones, computers and other displays are becoming ubiquitous, and optical coating technology can extend their usefulness in various lighting settings.”

She noted a trend in patents and patent applications for coating designs that enhance the light efficiency of flat panel displays.

“Coatings are usually deployed to improve a device; thus, cost is a limiting factor,” she said. “Most common are antireflection coatings, which are typically low-margin high-volume-produced for lenses and other optical components. These standard coatings are manufactured mostly in Asia because of price. The number of coating manufacturers in China is growing rapidly. This trend will continue.” The higher-margin coatings are filters for high-end cameras and flat screens.

Consolidation is still a factor in the industry, she noted. The tough economic conditions have made it difficult for smaller coating houses to survive. “New uses for optical coatings favor coating houses with strong design teams that can innovate,” she said.

Optical systems, including coatings, will continue to be important in the military, which now emphasizes remote sensing and observation in warfare tactics. The higher price for optical technology, relative to electronic alternatives, is less of an obstacle in the defense segment, which also supports innovation in optics to meet stringent requirements, Weisenbach said.

“In terms of architecture, most coatings are applied to windows. As the economy and construction industry recover, revenues will rise. Growth in ‘green’ window coating is expected to increase. Solar energy is another green revenue opportunity for coatings. We believe that growth in the solar sector – really still in its infancy – will be robust in the long term. Optical coatings can help slow the deterioration of solar panels as they age,” she said.

Anthony Pirera, president of Spectrum Thin Films Inc. of Hauppauge, N.Y., said that, although offshore competition and the economic downturn have negatively affected many optical coatings businesses, the worst may be over, and there is a likelihood of gradual growth. “Optical coatings businesses need to understand and work with the global business trends and opportunities that have resulted from the Internet – and to work on improving their technology and increasing their quality control.”

To stay competitive in the world market, Pirera suggests that businesses should continue to upgrade their equipment; for example, there is a need for optical monitoring systems that have logic and that can measure rate and automate the coating process. “Ion beam sources are advancing, but density, profile and current levels need improvement. Developing a focused higher-current ion source with a denser beam would greatly improve coating technology. Ion beam sputtering is our future, as it can manufacture the most complex of coatings.”

A relatively small company, Spectrum Thin Films manufactures optics as well as simple-to-complex coatings ranging from the UV 193 nm to the far-infrared 20 µm using the electron-beam and ion-assisted technologies. It has developed an ultraviolet silver coating that reflects 98 percent from 310 nm to 2.5 µm, making it highly suitable for applications in astronomy.

Pirera said that optical coatings are a key component in lasers, adding that, as lasers evolve, very complex coatings will be in greater demand. Because much funding is going into next-generation telescopes, advances in optics and coatings likely will be needed in these efforts, he noted.