YG PRESS NEWS – VCSEL industry: Coherent and Lumentum illuinate the path
Coherent and Lumentum now dominate the global VCSEL market, collectively representing nearly 80% of it. So, what led to this shift?
- The VCSEL market is projected to reach about US$1.4 billion by 2028. This represents significant growth compared to its 2022 value of US$978 million, with a 6% CAGR.
- By 2018, the mobile and consumer sector emerged as the leading market for VCSELs, achieving a total worth of US$440 million. In contrast to 2018, the VCSEL market for mobile and consumer applications in 2022 has surged by 80%, expanding its reach to include tablets, AR/VR headsets, robotic vacuum cleaners, and intelligent door locks.
- The VCSEL ecosystem is currently a duopoly, with Coherent and Lumentum collectively commanding nearly 80% of the global market.
- A significant technological emphasis has been on moving from 940 nm to 1,380 nm VCSELs to integrate sensors under the display, with multiple manufacturing approaches in consideration.
According to Yole Intelligence, part of Yole group, in the VCSEL 2023 report, since 2017, there have been significant transformations in the VCSEL ecosystem. Initially, it was dominated by an oligopoly, with Lumentum holding the top position and several other players enjoying substantial market shares. However, the VCSEL landscape has transformed into a duopoly, with Coherent commanding a 41% market share and Lumentum at 37%. These two companies now dominate the global VCSEL market, collectively representing nearly 80% of it. So, what led to this shift?
During that period, Lumentum was the sole supplier approved by Apple. Meanwhile, Finisar was grappling with research and development challenges and struggling to meet Apple’s qualification requirements. Other players were either engaged with different smartphone manufacturers or catering to the niche market of small VCSELs for proximity sensors. Subsequently, Coherent’s acquisition of Finisar led to Lumentum losing market share, and it was only recently that Sony gained approval as a VCSEL supplier for Apple iPhones’ rear LiDAR.
Concurrently, the industry leaders also expanded their influence by acquiring other companies, such as Oclaro for US$1.8 billion and Coherent for approximately US$7 billion, among others. This was done to strengthen their positions in the optical communications sector and achieve vertical integration from VCSEL devices to transceiver modules. Ams-Osram is poised to make a significant impact in automotive applications, particularly in LiDAR and in-cabin sensing, owing to Osram’s historical presence in this market. Trumpf has shown promise in the development of long-wavelength and high-performance VCSELs and is expected to play a role in the primary VCSEL markets, namely data communications and consumer electronics. While Broadcom remains a notable player in the VCSEL arena, its primary focus is on data communications applications… For more information about this analysis, please contact us!