VCSEL 2022

Accelink, Aixtron, Alight, ams, Anadigics, Apple, Arima Lasers Corporation, Asus, Audi, Avago, AWSC, Beam Express, Blackmore, Bosch, Broadcom, Cable solutions, Canon, Changelight, Continental, Device Innovation, Egismos Technology Corporation, Emcore, Epistar, EpiWorks, Excelitas, Finetech, Finisar, FLIR, Foxconn, Fuji Xerox, Fujitsu, Global Communication Semiconductor, Google, Hamamatsu, Hella, Heptagon, Himax, HLJ, Honeywell, Honor, HTC, Huawei, Ibeo, iHealth, II-VI, Infineon, Infinera, Inneos, Innoluce, Innoviz, Intel, IntelliEPI, IQE, JDSU, Journal of Semiconductors, Kaiam, Koito, Landmark Opto, Lasermate, Lasertel, Laytec, LeddarTech, Lenovo, LG, Lumentum, Luminar, LuxNet, Magneti Marelli, Mantis Vision, Masimo, Namuga, Oclaro, Oculus, OmniVision, OnePlus, Oppo, Optek Technology, Optical Society of America, Optovue, Optowell, Orbbec, Osram, Oxford Instruments, Palomar Technologies, Picolight, pmd, POET Technologies, Primesense, Princeton Optronics, QSI, Quanergy, Rasirc, RayCan, Realsense, Riber, Ricoh, Robosense, Samsung, Sanan, Santec Corporation, SCAT, Seiko Epson, Seminex, SensL, Shiraz University, Sick, SinoSemic, SoftKinetic, Sony Corporation, Stanley, STMicroelectronics, Sumitomo Chemicals, Sunny Optical Technology, Suoer, Taiyo Nippon Sanso, Tetravue, Texas Advanced Optoelectronic Solutions, Thorlabs, TriLumina, TrueLight Corporation, Trumpf, Tyson Technology, Ultra Communication, US Lasers Inc., Ushio, Veeco, Velodyne, Vertically Integrated Systems, Vertilas, Vertilite, Viavi, Vivo, Vixar, VPEC, Wavetek, Win Semiconductor, Xiaomi, Zephyr Photonics, ZF and more.

The VCSEL market, driven by consumer and datacom application could reach $3.9B in 2027

In the past, the vertical cavity surface emitting laser (VCSEL) market was driven by datacom applications, the technology’s first volume application. In November 2017, Apple released the iPhone X embedding VCSELs for face recognition. This changed the game. In 2018, the mobile and consumer market became the largest market for VCSELs, reaching $440M. Other smartphone makers followed the same trend but stopped using such components a few years after in favor of under screen fingerprint sensors. Apple remains almost the only player integrating VCSELs. In 2022, the VCSEL market has almost doubled compared to 2018, reaching $840M. But starting in 2023, the datacom market could take back the lead and dominate the VCSEL market in the following five years. VCSEL revenues for datacom are expected to reach $2.1B in 2027, while VCSEL revenue for mobile and consumer would reach $1.7B in 2027.

From an oligopoly to a duopoly in the VCSEL market

Since 2017, the VCSEL ecosystem has changed drastically. At that time, there was an oligopoly with a market, largely dominated by Lumentum, but several other players had significant shares of the market. In 2022, the VCSEL ecosystem changed and is now a duopoly. Lumentum and II-VI are now the largest players, with 80% of the VCSEL market. So, what happened in five years? Lumentum was the only supplier qualified by Apple at that time. Finisar was still in R&D and struggling to qualify products for Apple. Other players were involved with other smartphone makers or supplying tiny VCSELs for the proximity sensor. Then, II-VI acquired Finisar. These two players, Lumentum and II-VI, are still the only players qualified by Apple for 3D sensing. In parallel, the leaders also acquired other companies like Oclaro, Coherent and several others. This reinforced their positions in the optical communication market, vertically integrating from the VCSEL device to the entire transceiver module.

8” wafer manufacturing and wavelength shift will be the next technology changes

Since 2017, VCSELs in smartphones have evolved little. A transition from 4” wafer manufacturing to 6” wafers was necessary to satisfy the exploding demand from consumer players. This happened between 2016 and 2018. Two major changes are expected in the coming years. In May 2022, IQE demonstrated its first 8” wafers based on germanium instead of GaAs. These new wafers may not be needed to answer a sudden rise in VCSEL demand, but to make possible the integration of photonics devices with CMOS technology. It also gives a potential roadmap towards 12” wafer manufacturing in the long term. The second major change expected is a shift in wavelength from 940 to 1,380nm using a dilute nitride active layer. This shift is needed to achieve an integration of the VCSELs behind organic light emitting diode (OLED) displays, which are transparent at this wavelength. The first application could be the proximity sensor being placed under the display, reducing the size of the notch on iPhones. Further 3D sensing applications using such wavelength will happen later.

Key Features

• VCSEL market volume and revenue 2019–2027
• Global VCSEL market share
• VCSEL technology analysis
• Wavelength transition from near to short wave infrared
• VCSELs in consumer, automotive, industrial and datacom applications

What's new

• Updated forecasts
• Analysis on the wavelength transition from 940nm to 1,380nm
• Integration of new 3D sensing applications in automotive and mobility and industrial markets

Product objectives

• Provide market data on different VCSEL applications
• Deliver an in-depth understanding of the VCSEL business value chain, players, and trends
• Give insights into manufacturing and associated challenges

Table of contents

Glossary

Report objectives

Scope of the report

Methodologies and definitions

About the authors

Companies cited

What we got right, what we got wrong

Executive summary

Context

• History of VCSELs
• Timeline of the main applications for VCSELs
• Comparison of 3D-sensing solutions

Market forecast

• Comparison with previous VCSEL forecasts
• Breakdown by applications – Main applications
• Global VCSEL market volume forecast, by market segment
• Global VCSEL market volume forecast, by application
• Focus on datacom
• Focus on automotive LiDAR
• Global VCSEL market share evolution – 2017 to 2021
• Market growth drivers

Market trends 

• Segmentation by wavelength
• Mobile and consumer segmentation
• Automotive and mobility segmentation
• Industrial segmentation
• Upcoming trends

Market share and supply chain 

• Device players – Distribution by country
• Player distribution by position in the supply chain and business model
• From datacom to 3D sensing
• 3D sensing: New opportunities in industrial and automotive applications
• 3D sensing: a diversification opportunity

Technology trends

• Visible VCSELs
  • GaN-based VCSELs
  • Red VCSELs
• Infrared VCSELs
  • VCSEL structure along the IR spectrum
  • Long-wavelength VCSELs
  • Multi-junction VCSELs
  • From single-junction to multiple-junction VCSELs
  • Past and future trends for VCSEL manufacturing
  • Dilute nitride for long-wavelength VCSELs
  • Long-wavelength VCSELs based on InP
  • A transition from 6" to 8" manufacturing using germanium substrates
• Mobile and consumer applications
  • VCSELs are a driving part of mobile technology
  • A possible transition from NIR to SWIR wavelengths?
  • Potential use-cases for SWIR
  • The next revolution in 3D sensing ?
  • Towards under-display sensing
  • Improvement of rear 3D sensing in smartphones
  • The growing interest in quantum-dot technology
  • VCSEL comparison for mobile and consumer applications
• Automotive and mobility applications
  • Where can VCSELs be used ?
  • VCSEL ecosystem for LiDAR
  • Eye safety and detection range
  • Trieye playing Atlas in SWIR imaging for automotive applications
  • VCSELs for in-cabin applications
  • Driver monitoring systems are coming
  • Robotaxi production forecast
  • VCSEL comparison for automotive and mobility applications
• Industrial applications
  • Scope of industrial applications for VCSELs
  • The competition between 2D and 3D LiDARs
  • Logistics: the flow of things
  • Smart infrastructure opportunities
  • Use of VCSEL-based modules for industrial manufacturing
  • VCSELs in infrared power systems
• Datacom applications
  • Global context: Telecommunication infrastructure
  • Impact of COVID-19: New types of bandwidth demand
  • Trends in data center – Data traffic
  • Status of migration to higher speeds
  • Optical transceiver key components
  • VCSELs in optical data communication
  • VCSEL comparison for datacom applications

Technology, process and cost report

• iPhone 13 Face ID module teardown
• Dot projector evolution
• Flood illuminator evolution
• VCSELs used in the LiDAR module

Outlook

• Conclusions
• VCSEL market overview

About Yole Group