From The Editor | February 14, 2014

Executive Perspectives On The World Of Optics And Photonics

By Clinton Shaffer

At Photonics West 2014 last week, seven top executives from photonics and optics companies offered insights on current trends and future opportunities in the industry during the panel session on “Executive Perspectives on the World of Optics and Photonics.” The session was moderated by Stephen Anderson, industry and market strategist for SPIE, and included Tim Day (CEO, Daylight Solutions), David Nislick (CEO, Excelitas), Jerry Jurkiewicz (President, Optics and Photonics, IDEX), Dirk Rothweiler (Executive VP, Optical Systems, Jenoptik), Dennis Werth (Senior VP, Photonics Group, Newport), Rick Plympton (CEO, Optimax), and Christof Lehner (GM, North America, Trumpf). During the session, the panelists shared their views on the previous year and the years ahead and answered questions from a packed room of attendees. While they acknowledged that 2013 had its share of struggles, there was a lot of optimism surrounding the industry’s current status and its prospects for the future.

2013 In Retrospect

Dennis Werth of Newport summarized 2013 best when he described it as a “mixed year.” This was a nearly unanimous sentiment across the panel. While the panelists’ companies differed slightly in terms of market struggles, many named defense, research, and microelectronics as areas of deterioration.

If there was a common cause of decline named by the panel, it was sequestration. Surprisingly, however, its effects were downplayed and even dismissed by several participants. Optimax’s Rick Plympton even said that sequestration was more disruptive psychologically than it was in actuality. While most of the companies’ profits flattened out in research and defense, the sequester did not deliver the crippling blow some had anticipated.

In regards to growth, biomedical was the common thread. Nearly every panelist mentioned that life sciences and medical opportunities had grown substantially in the past year. Dirk Rothweiler of Jenoptik stated that the company’s life sciences business had “outpaced growth across the rest of [their] platform,” and other executives had similar commentary. Semiconductor manufacturing, which is being heavily influenced by photonics technology, was also mentioned as a growing market for photonics.

Moving Forward

As the discussion progressed, it turned out that many of the panelists were actually optimistic about the longer-term effects of the sequester on the photonics and optics industries. Plympton of Optimax was especially optimistic. “Sequestration is going to realign defense spending,” he said. “The industry is going to have an advantage in the new era, as government looks for cost savings that can be enabled by photonics.”

Tim Day of Daylight Solutions helped to elaborate. He described how the budgetary constraints brought on by sequestration will lead to a more careful evaluation of lifecycle costs, which will eventually favor photonics technology. As an example, he mentioned photonic telecom modules, which provide better efficiency and have significantly longer lifetimes than competing technologies. With increased reliability and efficiency, photonics technology will actually take market share away from older, less reliable technologies.

Aside from sharing optimistic views on sequestration, Day identified some of the other trending areas of growth for the photonics industry, which included the mobile, biomedical, and automotive industries. The healthcare and life science industries are poised for even more significant growth in 2014. Innovative new medical devices and recent developments in optical coherence technology (OCT), spectroscopy, and nanosurgery are all contributing to the growing use of photonics technology in the biomedical realm.

Photonics technology is also poised for growth in the ever-expanding mobile device industry. Mobile device OEMs are always looking for more efficient lighting systems and miniaturized components, so it makes perfect sense that the photonics industry is starting to penetrate this market. The mobile device trend was affirmed by the presence of Google, Apple, and Amazon attendees at Photonics West 2014.

Finally, the automotive industry was also identified as a potentially bullish sector for photonics technology in the future, and not just for headlights. As cars continue to incorporate more sophisticated technology, including a broader array of electronic devices and software, photonics technology will become increasingly relevant. Photonics technology will also be utilized for ambient lighting and drive-assisted systems in future automobiles.

Photonics: A “Fundamentally Disruptive” Technology

Overall, the panelists were exceedingly optimistic about the future of the photonics industry. For many, the opportunities for growth greatly outweigh any looming issues. When an audience member asked if there were any disruptive forces that could potentially threaten the industry in 2014, Day responded by saying that the photonics industry is the “fundamentally disruptive” force that is driving change. It’s clear that, according to industry leaders, optics and photonics technology is bound for an exciting 2014.