VCSEL Market to be worth $3.1 billion by 2022

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The VCSEL (vertical-cavity surface-emitting laser) market will be worth $3.1 billion by 2022, research firm Markets and Markets has reported. The market is expected to rise at a CAGR of 17.3 per cent from the $954.6 million it was valued at in 2015, driven by the automotive and data transmission sectors.

Factors such as greater accuracy and high-power efficiency in medical and sensing applications, as well as additional capabilities like low diversion, high beam light, low heat, and compact size were also revealed by the research firm as drivers for growth.

The automotive sector is seen as a driver of the market due to the increasing use of electrical systems in automobiles that has led to a dramatic increase in VCSEL importance and therefore demand.

‘Recent automobiles have improved significantly in terms of fuel efficiency, safety, in-car entertainment, and engine performance. All these technologies generate a large amount of data which needs to be transmitted at a high speed,’ Markets and Markets explained. ‘VCSELs meet the high data rate requirements of the media-oriented systems transport (MOST) specification, which is the common networking protocol for designing internal communication networks in premium automobiles. This makes VCSEL sensors ideally suitable for new automotive markets.’

Data communication is also driving the demand for this VCSELs, particularly in North America, where it holds the largest share, according to Markets and Markets. ‘The adoption of the Internet of Things for effective performance has resulted in the generation of huge amounts of data,’ the research firm said. ‘This has increased the implementation of data centres. For instance Microsoft and Google, both are constructing major data centres in this region which would ultimately boost the growth of overall market.’

Companies such as Broadcom, Finisar, Lumentum Holdings, II-VI and Vixar have been responsible for the dynamic growth of the market in North America. Additional applications such as pumping, sensing and certain emerging applications are also expected to fuel VCSEL market growth in the region.

Multimode VCSELs continue to be the overall major contributor to the market, and are expected to exhibit a continually high growth rate throughout the forecast period.

‘The market for multimode is increasing rapidly,’ Markets and Markets confirmed. ‘Multimode are suitable for long-haul transmissions as they offer better modulation compared to single-mode VCSELs. Multimode are thus used in precision sensing and datacom applications. The high-speed capability of multimode VCSELs has increased its use in data communication.’

Major players operating in the overall VSCEL market are Broadcom, Finisar, Lumentum Holdings, Philips Electronics, II-VI, IQE, Vertilas, Princeton Optronics, Vixar and Santec, according to Markets and Markets.

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