Photonics shows strength in Shanghai

Since first opening in 2006, LASER World of Photonics China has established itself as the leading lasers and optics tradeshow in China. It was very clear to me how energized the exhibitors and attendees were by the diversity and quality of products on display, the rapidly increasing scale of the industry in China, and the international feel of the event.


The show ran from March 20-22 in Shanghai’s New International Expo Center, and attracted 475 exhibitors from 19 countries, an increase of 32 percent from 2011. The number of visitors reached 34,300, a 19 percent growth over last year. The total exhibition space increased to 23,000 sq m, up 33 percent from 2011.

Most of the major North American and European manufacturers of lasers, optics, and cameras exhibited at the show. Some were able to benefit from many years of operating subsidiaries in China; for example, Avantes China held a celebration marking its fifth anniversary and disclosed plans for growth that included expanding from four to five locations.

The vast majority of exhibitors were Chinese, including names increasingly familiar to me such as Castech, China Daheng Group, Crystech, Han’s Laser Technology, Luster LightTech, Pinnacle Scientific, Wuhan HuaGong Laser Engineering, Wuhan Raycus Fiber Laser Technologies, and Xi’an FocusLight Technologies. A section of one hall was devoted to the Machine Vision Exhibition Pavilion, which attracted approximately 100 Chinese and international exhibitors.


The Photonics Congress China was held in parallel to the tradeshow and featured the International Conference on Laser Processes and Components, the Conference on Laser Technology and Optoelectronics, an OIDA Fiber Communications Workshop, and the OSA Energy Photonics Workshop. During the Laser Processes and Components conference, I presented some of the global laser marketplace data researched by Strategies Unlimited, a summary of which was published in Laser Focus World.

The audience of approximately 300 also heard from Prof. Youliang Wang, Chinese Optical Society Laser Processing Committee, who discussed the state of the laser industry in China. The first point he made was that the central government is firmly behind the industry. The current president of China and general secretary of the Communist Party, Hu Jintao, has said, “We should redouble our efforts to research, produce, and use lasers.”

Wang also noted that two laser companies are now listed on the Shenzhen Stock Exchange (SXSE): Wuhan Golden Laser www.goldenlaser.cc (SHE: 300220) and Shenzhen Sunshine Laser and Electronics (www.sunshine-laser.com) (SHE: 300227). He said that the laser processing industry is growing quickly and embracing fiber lasers, but that much work needs to be done. According to Wang, there are 50 domestic high-power laser companies but only 13 of them are well known and have a strong intellectual property position and R&D operations.

He urged the domestic laser industry to become more “self-directed” and innovative, and to overcome the lack of management experience, R&D, and skilled technicians. He further stressed that China must avoid becoming just another laser marking market.

Dr. Bo Gu, a well-known figure in the industry who has held management positions in both China and the US, also spoke on China and the global laser industry. He first urged the Chinese laser industry to develop a leader mentality. China has trailed in the invention and development of new technologies by only a few years, including laser technologies. However, “the cost of being second is huge.”

Higher margins go to the leaders (up to 60 percent)—as latecomers enter markets, prices and margins drop. Market data from Strategies Unlimited shows that approximately 90 percent of the value of the global laser industry now comes from companies headquartered in the US, Germany, or Japan.

Gu said that the advancement of lasers and laser technology was called for in the government’s Twelth Five-Year Plan and that once such a commitment was made, resources were allocated to ensure it happened. To drive this change, Gu said Chinese companies should:
* Invest in R&D
* Acquire overseas companies or create joint ventures (which may not provide access to leading edge technologies but might reduce the trailing time)
* Participate in exchange programs with international companies (given the political world, probably more feasible with European companies)
* Invest in and set up overseas centers to attract talent and learn (probably only feasible for larger companies such as Huawei).

Shanghai was a noticeably different city from the one I visited five years ago while attending another tradeshow. In a sense, the Chinese laser market is growing and changing even faster than the social and infrastructure changes that are transforming the country. Hoping to keep pace, I’ll be writing much more about the industry in this blog and in the pages of Laser Focus World.

OFC/NFOEC welcomes 12,000 attendees to the "Age of Abundance"

With its attendance increasing for the fourth year in a row, the 2012 Optical Fiber Communication Conference and Exposition/ National Fiber Optic Engineers Conference (OFC/NFOEC), held March 4-8 in Los Angeles, CA, also included an expanded show floor with 560 exhibitors. And while attendee figures and exhibit space were certainly abundant, the biggest message I took back from OFC/NOFEC 2012 was the numerous Plenary and special presentations from companies like Facebook and Google exclaiming that today's society should continue to enjoy the "Age of Abundance" in terms of the availability of communications bandwidth.

In the Tuesday morning Plenary sessions that opened the conference, Google VP, Access Services, Milo Medin presented his keynote entitled "Bandwidth, Optics and the Age of Abundance." Medin described how 16 years ago, the @Home Network--a high-speed cable Internet service provider from 1996 to 2002 founded by Medin, William Randolph Hearst III, and cable companies TCI, Comcast, and Cox Communications--offered 4-5 Mbps download speeds at $40 a month, but was generally viewed as offering "too much bandwidth." Just 4 years later, however, it would have a million subscribers and we all know that while 4-5 Mbps is adequate for many, the growing desire to stream videos and download gigabit data files is demanding ever-higher bandwidth offerings from cable, optical fiber, wireless, and satellite providers alike.

If you missed Medin, you can see an introduction to his Plenary here:



And even more enlightening is this video from Google itself, which introduces their gigabit fiber-to-the-home network initiative:



While the video is a bit dated, it explains how Google plans to offer an "open access" network and teach other networking companies what they learn. Google Fiber (Mountain View, CA) even had a booth (#906) at OFC/NFOEC.

The "Age of Abundance" is further evidenced in how network IP transit costs continue to decline as bandwidth grows, from $1200/Mbps in 1998 to $3.25/Mbps in 2012, according to Medin and a 2011 broadband economics study by Google. Medin says this pace can only be maintained using "optical" transport. Sounds like good news for optics, right? Not so fast. Sadly, and this is perhaps the most disturbing message that I gathered, all of this bandwidth must grow without increasing the price to the customer--much more than what it is already. This means that huge bandwidth gains will require new networks or upgrades to existing networks, at nearly frozen equipment prices. Looking at this from the viewpoint of all my friends in the telecom industry trying to make money on the components and network equipment side of the business, it's a grim scenario indeed. Maybe space-division multiplexing will be the savior? See supporting materials on space-division multiplexing at www.ofcnfoec.org/Home/Program/Workshops-and-Panels/Space-Division-Multiplexing.aspx and www.ofcnfoec.org/Home/Program/Workshops-and-Panels/Space-Division-Multiplexing.aspx.

Regardless of the means to the bandwidth-nirvana end, OFC/NFOEC certainly showed a wealth of integrated photonics architectures, few-moded and multicore fiber options, new high-speed coherent communications equipment, and a seeming mood of confidence that the technologists will somehow pull through and provide yet more bandwidth without significantly raising prices. But I sense that much of the exuberance could be waning for many of the "veteran" optical fiber crowd as some companies still struggle to grow telecom financial margins. While a gigabit of bandwidth seems like plenty to me, I can't help but wonder what new bandwidth-sucking applications will be around in 2020 and what the network of the future will actually look like!

Keep your photonics business growing: Milton Chang's perspective

During our Lasers & Photonics Marketplace Seminar at SPIE Photonics West 2012, Milton Chang delivered the keynote talk on how to keep a photonics company growing. Essentially he talked about how to sustain the spirit of innovation and entrepreneurship with which a company is founded.

I think you'll be interested in hearing Milton Chang talk about how to apply the principles and practices described in his book Toward Entrepreneurship in a strategy to cultivate the creative and entrepreneurial spirit in an established business.

Milton Chang contributes the monthly Business Forum column to Laser Focus World and is founder and managing director of Incubic Management, a venture fund investing in high-tech startups. He was President/CEO of Newport and New Focus, both of which he took public, and is currently director of Precision Photonics, mBio, and Aurrion.

In case you missed the 2012 Lasers & Photonics Marketplace Seminar

For those of you who may not know, the annual Laser Focus World Lasers & Photonics Marketplace Seminar is, per our description at www.marketplaceseminar.com, "The only event anywhere in the world that focuses on the entire laser marketplace. It provides a comprehensive market perspective that is unobtainable elsewhere, with market data segmented by applications and laser technology from three of the photonics industry's leading resources: Laser Focus World (www.laserfocusworld.com), which delivers global coverage of the entire photonics industry; Industrial Laser Solutions (www.industrial-lasers.com), a primary source of information on industrial laser materials processing; and Strategies Unlimited (www.strategies-u.com), the world's foremost photonics market research company. In addition, industry experts present their views and analysis of photonics-market trends, applications development, and business outlook."

The 2012 Lasers & Photonics Marketplace Seminar was held at the "W" hotel in conjunction with SPIE's Photonics West 2012. And in case you missed it, here is a video with some of the highlights from the conference speakers:




Each year, our Seminar organizing team seeks out the hottest new photonics technologies and the most well-informed (and hopefully, lively) speakers in our industry today. If you have a compelling technology or photonics market story to share, please contact cholton@pennwell.com if you are interested in speaking at the Seminar next year.

So what were the laser market numbers in 2011 and what is the forecast for 2012? You can read the overview feature article in the January issue of Laser Focus World entitled "Economic aftershocks keep laser markets unsettled," and for an even more amazing, detailed, and ultra-comprehensive analysis of the laser markets, look to the report from Strategies Unlimited entitled The Worldwide Market for Lasers: Market Review and Forecast 2012.