Melinsa Rose, Senior Editor, firstname.lastname@example.org
As the 50th-anniversary celebration of the invention of the laser begins, the industry itself is making a cautious rebound after months of belt-tightening, consolidation and reassessment in the wake of a worldwide recession that put the brakes on laser growth. The microelectronics industry is on the rise, and some laser manufacturers are seeing an upswing in the life and health sciences. Solar and scientific research segments are being driven somewhat by funds finally flowing from economic stimulus packages, and industrial segments such as materials processing are continuing to recover more slowly.
Leaner and meaner
Perhaps driven by grim news in the microelectronics sector, which contributed 29 percent of its revenues in 2008, Newport Corp. made some aggressive moves in September of that year to streamline operations and reduce costs, such as outsourcing some manufacturing to its new facility in Wuxi, China, and reducing its head count and personnel costs, actions expected to save more than $15 million in 2009.
Also in 2008, bolstered by government investment support and strong industry and consumer demand, Newport invested significantly in developing products for applications in thin-film solar panel manufacturing, including automated scribing and edge deletion systems, lasers, solar simulators, advanced positioning systems, optical systems, and test and measurement systems.
By January 2009 at Photonics West, laser company CEOs were talking about the need to innovate, collaborate and consolidate. Those three things have been much in evidence throughout the year, with the introductions of many new and innovative products, the announcements of several key acquisitions, and the continuation of belt-tightening and consolidation plans.
In 2009, Coherent Inc. of Santa Clara, Calif., trimmed its work force by 24 percent, closed its St. Louis facility, vacated a building it leased in San Jose, Calif., and consolidated sales offices in Japan.
In October, it acquired StockerYale Inc.’s laser diode module and specialty optical fiber businesses, based in Montreal and Salem, N.H., respectively.
“These new products position us in the machine vision market and enable new applications in bioinstrumentation, especially in the area of structured life,” Coherent President and CEO John Ambroseo said during a fourth-quarter earnings call in early November.
With semiconductor laser devices now being produced at its Sunnyvale, Calif., plant, Coherent also plans to exit its epitaxial growth facility in Finland by the end of fiscal 2010.
In early 2009, Oxford, Mass.-based IPG Photonics Corp. implemented a cost-cutting program that included decreasing the manufacturing costs of its major products by producing components such as couplers, processing cables, optical heads and chillers in-house, rather than buying from other suppliers; decreasing the cost of its low-power lasers, including pulsed ones, by 15 to 20 percent; and cutting its bonus program and moving about one-third of its employees to a shorter workweek.
Top, the new Quasi CW 532-nm Fiber Laser. Bottom, performed with just 0.1-W average power, clean scribing of the top layer is achieved without any damage to the underlying layer. The scribing speeds achieved were 2000 mm/s, and the frequency used was 150 kHz. Images courtesy of IPG Photonics.
The company also put the release of its CO2 lasers, announced in May 2008, on hold.
“It is not a good time to introduce it in this economic climate, where the sales of CO2 flat bead cutting machines have plummeted and we are gaining traction very rapidly in the sales of fiber-based flat bead cutting machines,” said Bill Shiner, vice president of industrial markets for IPG Photonics.
In June 2009, Newport announced that it was acquiring Oclaro’s New Focus business, a portfolio that includes optoelectronics, high-resolution actuators, tunable lasers and optomechanics, in exchange for its high-power diode laser manufacturing operations in Tucson, Ariz.
“The New Focus acquisition has had a positive impact both from a product-market perspective and financial perspective for Newport,” said Herman Chui, senior director of product marketing at Spectra-Physics. “The overlap with the Spectra-Physics part of Newport is relatively small and is primarily on two fronts: The New Focus tunable lasers complement some of the Spectra-Physics tunable lasers from a product-offering perspective, and some of the New Focus operations now share the Santa Clara facility.”
Newport relocated the Spectra-Physics Lasers Div. headquarters from its five-building campus in Mountain View, Calif., to a smaller, more modern manufacturing site in Santa Clara, Calif., to improve efficiencies, save money and facilitate the integration of New Focus. The move was expected to be finished by the end of 2009.
The new headquarters “is a state-of-the-art facility for lasers,” Chui said. “The building was previously facilitated for medical device manufacturing, and many millions of dollars were invested in facilities infrastructure upgrades.”
The recession hit the entire laser market hard, and the industrial market was no exception. In March, industry analyst Strategies Unlimited predicted that the industrial market would fall 32 percent in 2009, back to 2004 levels. Returning to 2008 levels would take about four years, the company said, with materials processing applications taking longer to recover and fiber lasers bouncing back faster than most.
After three grim quarters in 2009, however, some companies are now seeing some market bright spots.
“We have seen a modest upturn, particularly in the medical, photovoltaic and semiconductor industries, and are hopeful this will continue through 2010,” said Trumpf Inc.’s Burke Doar, vice president of sales and marketing.
With the TruLaser 1030, Trumpf said it offers something completely new: a machine with low investment and operating costs, as well as extremely simple operation. Courtesy of Trumpf.
“Like just about all companies, Trumpf Inc. was affected by the economic downturn through reduced sales. However, we have not ceded any ground in our laser development efforts,” Doar said. “If anything, those efforts have been strengthened, as evidenced by our continued ramp up of manufacturing lasers and components out of the LITE Building at Trumpf’s Farmington, Connecticut, facilities.”
Coherent reported that its $107.6 million revenue for fourth-quarter 2009 exceeded its expectations and grew 9.3 percent from the previous quarter.
The company reported new booking records for its Chameleon series of lasers, used predominantly for biological imaging, and for its amplifiers that support basic chemistry, physics and materials science research.
Coherent also emphasized its low price and economical operating cost when promoting its new Leap excimer laser, introduced last June. The laser is primarily intended for micromachining applications in microelectronics and medical device manufacturing.
Spectra-Physics introduced its first industrial fiber laser, Alliant, in May 2009, and the market response has been moderate, Chui said, in keeping with the softness of the industrial laser segment.
“We continue to be investing significantly in fiber laser technology, and we believe it will play a significant role for us in some key areas, including industrial, microelectronics and other applications,” he said.
The third quarter of 2009 was significant for Newport and Spectra-Physics because it marked the division’s return to profitability for the first time since 2007.
The quarter “was a significant step in the continuing transformation of Spectra-Physics,” Chui said. “We are seeing some level of growth into 2010 in most all of our end markets, and we are optimistic about the direction of our business.”
He said the company “is seeing some recovery in the microelectronics and industrial markets, including semiconductor, photovoltaic, flat panel and other microprocessing applications; continued growth in the life and health sciences market, including bioinstrumentation and bioimaging applications; and strength in our research business.
“In short, yes, we are encouraged, although cautiously so, about the direction in both the laser market and our business,” he said.
Semiconductors, stimulus and solar
Although the semiconductor market experienced a major slump in 2008 and most of 2009, some improvements have been seen in the past few months.
Coherent reported that its microelectronics industry bookings during the fourth quarter, although down 20 percent from the same quarter a year ago, had surged nearly 85 percent over the third quarter of 2009.
“It is our observation that Tier One tool vendors are recovering more rapidly than Tier Two or Three players,” Ambroseo said during an earnings call. “While not a surprising development, it does beg the question of what the customer landscape will look like in 12 to 18 months.”
An active application area in the semiconductor field is the generation of laser-produced plasma-emitting extreme-ultraviolet (13.5 nm) light for the next generation of photolithography tools, said Tim Morris, general manager of Trumpf’s Laser Technology Center in Plymouth, Mich.
“There are a number of developers working on this, using high-power CO2 and/or DPSSL [diode-pumped solid-state laser] sources,” he said. “If the developers are successful in creating cost-effective tools with adequate throughput, a significant market for the chosen laser sources will develop over the next decade.”
Some companies are betting on solar to help them through the microelectronics and industrial sector slump, with government subsidies in many countries helping fund the expansion.
“We expect that solar cell technology will continue to see significant growth, although the demands in this sector are ever-changing and vary dramatically from region to region,” he said. “Recent reports indicate strong markets in China, Greece, Italy and the US into 2010 and beyond.”
New manufacturing processes in the solar industry are increasingly requiring the use of lasers. Standard in the industry today is the use of lasers for edge isolation of crystalline solar cells and scribing processes for thin-film solar cells.
“In the future, new processes like laser doping, laser annealing, laser drilling and laser edge deletion will increase the demands for laser sources in the production of solar cells and modules dramatically,” Morris said.
The lines around the edge of the bright blue solar cell are made by a laser.
IPG’s Shiner said his company has seen benefits from economic stimulus money in the US from manufacturers of electric car batteries, who require high-power fiber lasers, as well as from a government-funded geothermal project and several solar projects.
“We have been seeing a moderate positive impact in our scientific lasers business as a result of the economic stimulus, and we expect the benefit of the stimulus to increase into 2010,” Chui said.
A laser drills a hole in a connecting rod. The hole allows lubricant to flow to the contact surface. Courtesy of Trumpf.
“The industry has slowed down, and financing is a question mark, but the stimulus money will help, and efficiencies will improve,” Rofin-Sinar President and CEO Günther Braun said of the photovoltaics industry in a CEO discussion of the economic crisis during Laser World of Photonics in Munich in June. “It’s a nice opportunity for us. It will pick up in 2010 – it’s a little slow right now. It hasn’t reached 10 percent of our company, but it is becoming important to us.”
“Our internal estimate for stimulus-based orders in the US for the fourth quarter was approximately $4 million to $5 million, with nearly all of the money coming via the National Science Foundation,” Ambroseo said during the earnings call.
IPG sees medical and computer technology segments as receptive to replacing older technologies with fiber. “They are very rapid to embrace new cost-effective technology,” Shiner said.
The company expects demand for fiber lasers for medical applications to increase in 2010, “as several new companies are now integrating IPG lasers into their systems in the dental and dermatology fields,” Shiner said. “In addition, we have begun to ship in volume our high-power diodes that are being used for several medical procedures.”
Coherent’s products for the instrumentation market saw an increase in demand, especially in flow cytometry and confocal microscopy, in the fourth quarter, Ambroseo said. “There is growing expectation within this market that stimulus funds from NIH [National Institutes of Health] will drive a round of adoption, which could be behind some of the Q4 order growth,” he said.
Some companies are seeing green – as in green lasers – as a way to make more green.
“Green-emitting lasers are enabling new applications – in particular, welding of high-reflective materials like copper, ablation of thin films, drilling of silicon and structuring layers with a thickness of a few hundreds of nanometers,” said Jürgen Stollhof, product manager at Trumpf’s Laser Technology Center. “Trumpf currently has products under development using rod, fiber and disk laser technology to produce green laser light. We will be showing a green-emitting disk laser with up to 700 watts at Photonics West 2010.”
Trumpf’s TruMicro Series 5000 lasers are short-pulsed disk lasers that emit a green wavelength beam with little or no heat impact. “Primary applications include ablation of layers in the solar cell industry, cutting of nonmetals like plastics and ceramics, and drilling of holes mainly in the electronics and semiconductor industry,” said Peter Grollmann, product manager of Trumpf’s TruMark laser marking line.
IPG also introduced a green spectrum laser in 2009, and Shiner said it has so far supplied 20 or so units to companies working on photovoltaic cells, which are still in the evaluation phase.
Coherent introduced its new high-power Mamba Green DPSSL this past summer for industrial and scientific applications as well as the 532-nm Matrix, a Q-switched DPSSL for micromachining tasks in solar, semiconductor and medical device manufacturing. It also launched 532-nm, and 2- and 5-W optically pumped semiconductor laser versions of its Verdi line of compact all-solid-state continuous-wave lasers for scientific and commercial applications.
Introduced in the summer of 2009, Coherent Inc.’s 532-nm Matrix, a Q-switched diode-pumped solid-state laser, has applications in solar, semiconductor and medical device manufacturing. Courtesy of Coherent Inc.
Coming attractions: Lasers in 2010
After falling in 2009 for the first time in almost 10 years, the global laser market is expected to grow about 11 percent in 2010, according to Strategies Unlimited, helped by rebounds in the semiconductor and communications equipment business.
“Semiconductor and display manufacturing tools, biomedical systems and R&D are already on the rise,” said Dr. Tom Hausken, the analyst who conducted the survey, in a press release. “But slower sectors, such as most of materials processing, will not see growth until late 2010 or even 2011.”
For their part, laser companies in 2010 will continue to introduce products that have new capabilities and that make their customers’ jobs easier, more efficient and less costly.
At Photonics West 2010, IPG Photonics will introduce a line of long-pulsed fiber lasers that have a high peak power and a low average power, to compete against pulsed YAG lasers, Shiner said. The new lasers will have peak powers of up to 5000 W, with average powers of 150 to 250 W.
In terms of IPG’s plans for 2010, “You will see a substantial increase in the utilization of fiber lasers in the sheet metal markets, improvement in the beam quality of all of our high-power lasers, the introduction of higher-powered air-cooled units and a continued size reduction at all power levels,” Shiner said.
Trumpf showcased six new products at Fabtech 2009 in November and has at least four new lasers slated to be on display at Photonics West 2010.
“We are seeing a dramatic interest in improving the productivity and cost-effectiveness of existing welding applications, prompted by the cost, efficiency and capability improvements of DPSSL sources and optics,” Morris said.
Disk lasers combined with scanner optics are highly efficient and cost-effective and provide unprecedented remote laser welding performance, Stollhof said.
“Virtually every automotive component manufacturer currently using significant resistance spot welding is evaluating the remote laser welding, which on some components can provide order of magnitude productivity increases,” he added.
“We expect to see continued advances in output power, cost per watt and other parameters in lasers for industrial manufacturing and microelectronics,” Chui said. “This trend should continue to result in the enablement of new applications for lasers in these markets, both in replacing less effective technologies and in creating completely new applications.”
During the first three quarters of 2009, Spectra-Physics introduced 18 major new products. Although that number is impressive, “We primarily concern ourselves with the impact the products have in the market and how they enable our customers to address their applications,” Chui said.
He cited the company’s recently introduced Mai Tai SP laser, the first fully automated short-pulse ultrafast oscillator with computer-adjustable bandwidth and wavelength, as one such product that allows scientific customers to perform complex experiments in new ways.
Spectra-Physics’ Mai Tai SP (short pulse) laser is the first fully automated short-pulse ultrafast oscillator with computer-adjustable bandwidth and wavelength.
“One revolutionary product can have a dramatic impact, sometimes more than many other products combined,” he said.
The company also has a range of new high-performance lasers ready to hit the market in early 2010.
IPG says it continues to work aggressively to make fiber the choice over other types of lasers, such as CO2 in the metal cutting market and pulsed YAG in the welding and drilling sectors.
Anthony DeMaria, a chief scientist at Coherent’s CO2 operation in Bloomfield, Conn., is not ready to cede the 46-year-old CO2 laser’s market share just yet.
Spectra-Physics introduced its first industrial fiber laser, Alliant, in May 2009. Images courtesy of Newport Corp./Spectra-Physics Laser Div.
“Despite its maturity, the CO2 laser is still introducing new technologies and continuing to evolve,” he said. “It has captured the largest portion of the laser revenues associated with the materials processing market. It has been reported that the percentage of laser sales to the materials processing market is divided 40 percent, 32 percent, 19 percent, 7 percent and 2 percent between CO2, solid-state rod and disk, excimer, fiber and direct-diodes lasers.”
Last June, Coherent debuted the smallest 1-kW CO2 laser available, emphasizing the Diamond E-1000’s size – 1500 × 500 × 400 mm – for space-sensitive applications, as well as the fact that the sealed laser requires no external gas supply, and its compact laser head can be brought close to the workpiece, eliminating the costs and complexities of long beam delivery systems.
DeMaria predicts that, in 2010, industrial-quality, 1000-W average output power, sealed off, RF-excited, diffusion-cooled CO2 lasers with 20,000 hours’ lifetime before the need to replenish the laser gas will be introduced into the laser materials processing marketplace and will sell for less than $100/W of average power.
“These new CO2 lasers will be small and rugged enough to mount the laser head with its integrated RF power supply directly onto a robotic arm with only coolant lines and a DC power cord connected to the laser,” he said. “The availability of such advanced, low-cost lasers to small manufacturers of laser materials processing systems will enable them to compete with the large manufacturers of such systems who are vertically integrated.”
IPG has been developing relationships with OEMs in China, and China was a bright spot for the company’s high-power lasers in its recent third-quarter report.
“We are experiencing growth in the high-power market in an economy where our competition is showing large decreases,” Shiner said. “This indicates part of our growth is from an increase in market share rather than a market growth. China will continue to be a large growth opportunity for IPG, as there is very little history or established relationships for high-power technology in China. Decisions will be made on the most cost-effective technology, where fiber lasers usually win.”