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Optical market still facing tough times

Firms in the LED and equipment market are still facing rapidly declining prices and waning demand and are finding it difficult to increase revenue and income. However, it's not all bad news - product development remains a bright spot

Rapidly declining pricing, softening demand and the continuing uncertainty of the global economy are creating challenges for manufacturers at all stages of the optical industry supply chain.

Most of the companies that manufacture equipment, material and devices for LEDs, optoelectronic devices and photovoltaic devices are seeing declining revenue and income, or outright losses.

This is according to the Strategy Analytics report, “Compound Semiconductor Industry Review July – September 2012: Optoelectronics, Materials and Equipment” It captures financial announcements from companies such as Soitec, Aixtron, AXT, Hitachi Cable, JDSU, Finisar, Oclaro, Emcore, GigOptix, IQE, Kopin, Cree, OpNext, First Solar and Spire.

Despite declining financials at many of these companies, the report concludes that product development activities remain strong with the announcement of several new LED and higher data rate optical components.

“With a few notable exceptions like Dowa, First Solar and Cree, most of the other companies in this report struggled to increase revenue and income,” observes Eric Higham, Director of the Strategy Analytics GaAs and Compound Semiconductor Technologies Service (GaAs). “Companies in the LED and equipment market are trying to address rapidly declining prices in conjunction with declining demand and they are finding it difficult to increase revenue and income in this environment.”

Asif Anwar, Director, Strategy Analytics Strategic Technologies Practice adds, “Companies in the optical component segment of the supply chain are developing products for higher data rate networks, but most of the equipment orders at the front-end of the optical supply chain are going to research institutions rather than production expansions.”
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