MarketsandMarkets is expecting to see steady growth in the VCSEL market in the next few years. The demand for VCSEL technology will climb from $1.4 billion in 2021 to $3.3 billion by 2026, which corresponds to a CAGR of 18.8 percent for the forecast period.
The firm attributed much of that growth to the rising need for VCSEL sensors in the consumer electronics market. 3D sensors are used for facial recognition in smartphones, and have become increasingly ubiquitous since Apple pioneered the concept with the iPhone X in 2017. Major manufacturers like Samsung and Xiaomi have since followed suit, and released smartphones with 3D sensing capabilities.
The technology has also gained traction in healthcare and in data centers. In the latter instance, VCSEL tech is used in optical transceivers that improve data transmission rates.
According to MarketsandMarkets, those other applications have helped drive the VCSEL market for much of the past year. While the demand for consumer electronics decreased during the pandemic, the COVID-19 health crisis created a greater need for high-end medical equipment. In the meantime, tech giants like Google and Microsoft have been investing more money in data centers all over the world.
The multimode VCSEL segment will make up the largest portion of the VCSEL market due to the performance of multimode solutions in data centers. However, GaAs material will be the most popular material amongst VCSEL manufacturers. The materials are more efficient and more affordable, which makes it easier to integrate them into consumer devices. The consumer market segment will hold the lion’s share of the market despite the impact of COVID-19.
North America will be the region with the biggest VCSEL market. MarketsandMarkets credited that to the presence of many leading VCSEL developers. The full list includes II-VI, Broadcom, and Lumentum, the latter of which currently holds roughly 50 percent of the total VCSEL market. The MarketsandMarkets numbers are comparable to those of Meticulous research, which predicted that the VCSEL market would hit $3.73 billion by 2027.