Global Vertical Cavity Surface Emitting Laser (VCSEL) Market to Grow at a CAGR of 18.6% by 2030

Introduction

Vertical cavity surface emitting lasers (VCSELs) are crucial components in numerous existing and upcoming 3D sensor systems that use structured light and time-of-flight (ToF) technologies. Applications include front-facing 3D facial recognition systems, world-facing cameras on mobile devices, light detection and ranging (LiDAR), and in-cabin sensing for autonomous drive vehicles. Although data transmission was the first industrial application to incorporate VCSEL technology, 3D sensing modules are becoming an internal part of most of the most advanced smartphones, with VCSELs becoming an essential option for smartphone manufacturers.

VCSELs are also projected to become a lucrative industry for manufacturers of optical chips. In addition to its portfolio of LED chips, the world's second-largest lighting business, Osram, is constructing a robust VCSEL portfolio.

Market Dynamics

Increasing Adoption of VCSEL in Data Centers to Drive the Global Vertical Cavity Surface Emitting Laser (VCSEL) Market

The data rate of optical interconnect networks in data centers has increased from 100 Gbit/s to 400 Gbit/s during the previous few years. The ever-increasing data traffic primarily drives this in data centers caused by the rapid market expansion of emerging technologies such as AI, VR/AR, and the Internet of Things (IoT), as well as the introduction of 5G mobile network systems.

Moreover, single transceiver data speeds surpass 100 Gbps using 25 Gbps line rates by combining wavelength and spatial division multiplexing. The following phase is to attain transceiver data speeds greater than 400 Gbps and push line data rates greater than 50 Gbps. Due to the developments in VCSELs and photodiodes, both PAM4 and NRZ modulation formats are used for 50 Gbps/channel data lines. The PAM-4 modulation format is a multilevel modulation that can double the number of bits in data transfer. Consequently, modulating VCSELs with PAM-4 is the ideal solution, boosting market expansion.

Widespread use of 850 nm-emitting VCSELs has been observed in data centers, particularly for network transmission applications involving large data volumes. Consequently, the increasing global usage of data centers is predicted to increase demand for implementing VCSEL technology. In data center applications, the increased demand for high data transfer rates that permit high-speed transmission for processing and retrieving findings is anticipated to fuel the VCSEL market's growth.

Growing Adoption of Advanced Sensors to Provide Opportunities for the Global Vertical Cavity Surface Emitting Laser (VCSEL) Market

The expanding use of sophisticated sensors in various applications, especially optical, is also driving market expansion. Advanced sensor applications in data communications or automotive applications demand dense traffic and high-speed transmission facilitated by compact and high-speed VCSELs. Consequently, such applications offer significant potential for market expansion.

Regional Insights

By region, the global vertical cavity surface emitting laser (VCSEL) market is segmented into Asia-Pacific, Europe, and North America. 

Asia-Pacific dominated the market and is estimated to grow at a CAGR of 20.2% during the forecast period. China is anticipated to have the highest growth rate among Asia-Pacific nations due to its expanding economy and market share in the global electronics industry. China is one of the largest producers and users of electronics. The region's manufacturing sector is expanding rapidly, and the continued deployment of manufacturing and telecommunications technologies contributes to the market's expansion. China's semiconductor consumption is rising rapidly due to the continued migration of diversified electronic equipment worldwide compared to other nations. The item is an indispensable component. Numerous potentials for the adoption of semiconductors exist due to the country's prominence in the smartphone market. To watch and monitor its 1.4 billion population, the Chinese government is also attempting to establish a techno-authoritarian state driven by artificial intelligence and sensors. As these initiatives expand, the country's demand for the studied market is projected to increase. Additionally, the Made in China 2025 plan of the Chinese government aims to increase semiconductor sector output to USD 305 billion by 2030 and satisfy 80% of domestic demand. Such occurrences are expected to stimulate market expansion in the country.

Europe is the third largest region. Europe is home to some of the world's most influential tech hubs and is a significant proponent and adopter of modern technology. The expansion of the VCSEL market is driven by the rising adoption of advanced technologies and semiconductors across several sectors. VCSELs are essential components driving and supporting the growth of various rapidly expanding digital technology markets. Thus, expanding the regional government's engagement in promoting the technology and the industry's leading companies would contribute to the expansion of the market. In addition, the increasing use of electrical systems in automobiles is another factor contributing to the expansion of VCSEL. The automotive industry is anticipated to employ the technology for applications such as gesture recognition, driver monitoring, and autonomous driving sensors. The automobile industry in the region is expanding at a steady rate. In the region, the demand for customized semiconductors and sensors is increasing. Thus, it is anticipated that VCSEL technology will play a vital role in the region.

North America is the second largest region. It is estimated to reach an expected USD 990 million by 2030, registering a CAGR of 18.%. In the semiconductor sector, North America is an early user of innovative manufacturing, design, and research technologies. The region's significance promotes the demand for exports of electronic equipment to end-user industries that are significant consumers of semiconductors, such as the consumer electronics and automobile industries. In addition, North America is home to numerous VCSEL manufacturers, which contribute to the regional market's expansion. Lumentum, Lasertel, II-VI Inc., and others are some of the leading producers. In addition, to meet the need for optical high-definition multimedia interface (HDMI) connections in consumer electronics, datacom VCSELs would assist in pushing television and computer displays toward higher resolution, larger size, and thinner profiles. The technique permits high-speed data lines that connect remote driver electronics to screens. As a result, market participants are compelled to invest.

Key Highlights

• The global vertical cavity surface emitting laser (VCSEL) market was worth USD 1345 million in 2021. It is predicted to reach an expected value of USD 6245 million by 2030, registering a CAGR of 18.6% during the forecast period (2022-2030).

• By wavelength, the global vertical cavity surface emitting laser (VCSEL) market is segmented into near-infrared (750-1400 nm), red (650-750 nm), and shortwave-infrared (1400-3000 nm). The near-infrared (750-1400 nm) segment accounted for the largest market share and is estimated to register a CAGR of 18.5% during the forecast period. 

• By die-size, the global vertical cavity surface emitting laser (VCSEL) market is segmented into 0.02 - 0.06 mm², 0.06 - 0.4 mm², 0.4 - 1.3 mm², and 10 - 75 mm². The 0.02 - 0.06 mm2 segment accounted for the largest market share and is estimated to grow at a CAGR of 15.7% during the forecast period. 

• By end-user industry, the global vertical cavity surface emitting laser (VCSEL) market is segmented into telecom, mobile and consumer, automotive, medical, industrial, and aerospace and defense. The mobile and consumer segment accounted for the largest market share and is estimated to register a CAGR of 20.2% during the forecast period. 

• By application, the global vertical cavity surface emitting laser (VCSEL) market is segmented into datacom, optical mouse, facial recognition and depth camera, gesture recognition, laser autofocus, proximity sensing, iris scan, medical, ADAS LiDAR, industrial applications, and other applications. The proximity sensing segment accounted for the largest market share and is estimated to grow at a CAGR of 17.3% during the forecast period.  

Competitive Players

Competitive Landscape

The key players in the global vertical cavity surface emitting laser (VCSEL) market II-VI Incorporated, Lumentum Operations LLC, Vixar Inc (OSRAM AG), Hamamatsu Photonics KK, TRUMPF Group, AMS AG, HLJ Technology Co. Ltd, FLIR Systems Inc., Vertilite Inc., Alight Technologies, Vertilas GmbH, Leanardo Electronics US (Lasertel), Broadcom Inc., Santec Corporation

Recent Developments

Market News

• September 2022 - Coherent Corp. (Nasdaq: COHR), a leader in optical communications transceivers, announced that its 400G ZR+ QSFP-DD-DCO transceiver had won the 2022 ECOC Exhibition Industry Award for Optical Integration.
• September 2022 - Coherent Corp. (Nasdaq: COHR), a leader in optical communications technology, announced the introduction of its ultrahigh-resolution telemetry module, or optical channel monitor (UHR-OCM), for embedded performance monitoring in optical transport systems transmitting at up to 800G and beyond.

Segmentation

Global Vertical Cavity Surface Emitting Laser (VCSEL) Market: Segmentation

By Wavelength

• Red (650-750 nm)
• Near-infrared (750-1400 nm)
• Shortwave-infrared (1400-3000 nm)

By Die-size

• 02 - 0.06 mm²
• 06 - 0.4 mm²
• 4 - 1.3 mm²
• 10 - 75 mm²

By End-user Industry

• Telecom
• Mobile and Consumer
• Automotive
• Medical
• Industrial
• Aerospace and Defense

By Application

• Datacom
• Optical Mouse
• Facial Recognition and Depth Camera
• Gesture Recognition
• Laser Autofocus
• Proximity sensing
• Iris Scan
• Medical
• ADAS LiDAR
• Industrial Applications
• Other Applications

By Region

• Asia-pacific
• North America
• Europe