Industrial Laser Solutions - January/February 2016

6 Industrial Laser Solutions JANUARY/FEBRUARY 2016 www.industrial-lasers.com technology report

FIBER LASER SALES CONTINUE TO DRIVE GROWTH

DAVID A. BELFORTE

A year ago, the global manufactur- ing marketappearedto beentering an unstable period. Twelvemonths later, with the 2015 revenue num- bers in, the international economic picture has not improved, and in fact has become more unstable.

Conditions in the leading market economies have deteriorated in the past months as highly publicized events in China, Southeast Asia, Europe, and the Middle East have slowed demand, leading to reduced consumer interest in non-essential goods. And US manufacturing, which had been strong while others weren’t, began to feel the fallout as factory activity in late 2015 had fallen to the lowest level since the Great Recession and exports to the aforementioned areas decreased. And to top it off, the expected surge in the economies of the emerging nations that were expected to boost their gross national products (GNPs) to lead to fresh new markets did not occur. For example, Brazil—a key component of the BRIC bloc—added to the drag on global manufacturing growth prospects as this country sank into deep recession at the end of the third quarter of 2015.

This year’s analysis of the global market was put together in a less-than-exuberant atmosphere, where the impact global hotspots were having on manufacturing was clouding GDP growth prospects in many countries. Economic slowdown in Asia, led by confusing market conditions in China and Japan (with the latter now in its second recession since the election of a pro-business prime minister), quenched growth in Asia, the world’s largest market. In Europe, economic good news starting the second half after months of troubling news (the scandal at VW, the world’s leading auto company) seemed to be stabilizing the economies, but terrorist attacks and Syrian war refugee ingress then shook Western Europe, leading to concerns that escalation would quench any growth in the Eurozone economies.

In this rather-tempered global manufacturing environment, total industrial laser revenues ran counter to the downward trend, exhibiting quarter after quarter of mid-to-high single-digit growth. The question being asked is whether or not the laser industry is out of sync with global manufacturing—after all, there is only one company turning in strong double-digit growth quarter to quarter: IPG Photonics. Among the others showing modest growth in 2015 are suppliers of fiber lasers and those selling ultrafast lasers. The upbeat results in 2015 were led by positive financial news from the leading makers of these products.

Setting the tone was TRUMPF, the largest industrial laser/sys- tem supplier whose Laser Technology group turned in a ster- ling 16.8% growth to €890 million ($946 million) in its 2014/2015 fiscal year, with the company as a whole expecting single-digit growth for the 2015/2016 period. Challenging TRUMPF for market leadership is IPG Photonics, the world’s leading fiber laser manufacturer, who reported an outstanding 22% growth in the third quarter and predicted seasonally adjusted fourth-quarter sales growth that would take the company close to the $1 billion revenue level. Following this are Coherent ($802 million, up 1%) and Rofin-Sinar Technologies ($520 million, down 2%). This performance for industrial lasers in an otherwise-challenged manufacturing sector comes with a slight tarnish when the numbers in TABLE 1 are reviewed. If it hadn’t been for the strong double-digit growth of fiber laser revenues, the total industrial laser market would have barely shown any growth.

In 2014, fiber lasers approached the 50% level of the total industrial laser market and in 2015 surpassed it (54%). As will be seen in subsequent tables, fiber laser is the dominant (>50%)

TABLE 1. Industrial laser revenues by laser type ($M)

2014 2015 2016
CO2 $694.5 $656.7 $587.3
Y-TO-Y -5% -11%
FIBER $1,483.6 $1,713.7 $1,902.6
Y-TO-Y 16% 11%
SOLID-STATE $463.9 $463.4 $461.0
Y-TO-Y 0% -1%
OTHER $331.6 $346.3 $367.8