Fiber laser boom spurs single emitters
Manufacturers of high-power single-emitter laser diodes are set to benefit from the fast-growing demand for so-called fiber lasers that are finding increasing use for industrial machining applications such as welding, bending and cutting.
According to a new report from Strategies Unlimited, fiber lasers are rapidly penetrating the $2 billion annual market for industrial lasers, threatening to displace more conventional high-power laser systems and increase diode consumption.
Unlike conventional lasers, which rely on crystal rods or gas tubes, coupled with excitation sources such as flash lamps or diode laser bars and finely tuned optics, a fiber laser system is very simple. The excitation medium is the fiber itself, which is doped with rare-earth elements like erbium and ytterbium. This is pumped using a single laser-diode emitter similar to those used in telecommunications applications.
Report author Tom Hausken expects the market for fiber lasers to grow at a compound rate of 35%, to reach nearly $700 million by the end of the decade. The overall industrial laser sector is expected to grow at only 9% during the same period, to reach around $3 billion.
"[This] will expand diode consumption, through the substitution of both lamp-pumped solid-state lasers and carbon dioxide lasers, as well as organic growth," Hausken said, pointing out that fiber lasers are enabling some completely new applications in the medical and sensing markets that conventional systems have been unable to penetrate.
Fiber lasers are very efficient, compact and cheaper to own in the long run, but the customer base for industrial materials processing is a relatively conservative one and the technology has been regarded as potentially unreliable as it relies on a single excitation source. That view now appears to have changed. Currently worth a little over $100 million in annual sales, the fiber laser sector is dominated by one company - IPG Photonics.
Headquartered in Oxford, MA, the privately owned firm was founded by Valentin Gapontsev in 1991. It has a semiconductor wafer fab in Oxford, where it manufactures 6-10 W single-emitter diodes using MBE.
IPG claims that it is now the world s biggest maker of diode lasers, when measured in terms of megawatts of power deployed per year. It estimates total shipments equivalent to 1 MW (equivalent to 100,000 individual 10 W diodes) in 2005.
The company is now planning a big ramp in diode production, and is building a second wafer fab to accommodate the increase. IPG s director of industrial market development Bill Shiner told Compound Semiconductor that it expects to deploy 2 MW cumulative diode power this year, rising to 6 MW in 2008 as applications in metal cutting in particular begin to take off.
Revenue figures show a similar story, with a compound growth rate of 60% over the past three years to reach just under $100 million in 2005, making it one of the top 10 laser manufacturers worldwide according to Hausken. He reckons that the spectacular growth could see it make a top-five ranking in 2006.
Making just one basic type of laser has allowed IPG to keep its costs relatively low. Shiner stated that IPG s mounted chips cost just $2 per W, a figure that rises to $6 when they are fiber-coupled. He added that IPG is now qualifying 20 W sources to further reduce this.
A certain mystery shrouds the exact nature of IPG s diodes, especially given that the company has kept its cards close to its chest by not patenting its III-V technology. IPG has been involved in a patent battle with JDSU, settled some years back. In late 2000 it signed a two-year diode supply deal worth $66.7 million with SDL, prior to the latter s acquisition by JDSU and the decision by IPG to make its own chips.
JDSU also makes fiber lasers, but the Californian company only has a small market presence. "JDSU and IPG are really the only ones with this vertically-integrated structure in the fiber laser market today, although that may change," Hausken said. "One would expect the usual long-term trend towards stratification of the supply chain [and] outsourcing the supply of diodes. However, there is no hint that this is imminent."
Most major-league conventional industrial laser companies, for example Trumpf and Rofin-Sinar in Germany, also take a vertical approach, since an internal supply of diodes is regarded as critical. While IPG faces the challenge of coping with a big expansion in manufacturing volume and sales, Hausken believes that one of the big players could complicate the picture with an acquisition.
The analyst adds that although JDSU could still mount a challenge, he is impressed with IPG s efforts thus far: "IPG has made itself into perhaps the leading manufacturer of high-power laser diodes, in units. It has done this using MBE machines, concentrating on a minimum number of designs, and by being very smart about it all."
•The Strategies Unlimited fiber laser market review and forecast is available now via the company s website, at www.strategies-u.com.
