Meticulous Research has released a new report that suggests that the demand for Vertical-Cavity Surface-Emitting Laser (VCSEL) technology will increase dramatically in the next few years. The report indicates that the market will grow to $3.73 billion by 2027, based on a CAGR of 21.5 percent between the years of 2020 and 2027. There will be more than 3.8 billion individual VCSEL units in circulation at the end of that window, which corresponds to an even more impressive CAGR of 31.9 percent.
According to Meticulous, VCSEL technology will be particularly popular in 3D sensing applications. The tech is already being used to enable facial recognition in smartphones like Apple’s iPhone X, and it will be deployed in the automotive industry to support the development of driver assistance systems and self-driving vehicles.
Data centers will be one of the other major drivers of VCSEL demand. The growing number of scalable cloud solutions has created a corresponding need for massive data centers that can handle the high volume of information, and VCSEL tech is able to deliver the fast transmission speeds required for modern digital infrastructure. However, that speed declines as the distance increases, and the short range will slow the adoption of VCSEL tech.
COVID-19 has also had a negative impact on the VCSEL market. Pandemic lockdowns have disrupted sales and production in the automotive and mobile industries, and that has reduced the amount of money available for research and development since businesses have been forced to prioritized their core operations.
Due to their utility in mobile applications, low-power single-mode VCSEL solutions will display a higher CAGR than their multi-mode counterparts. The 3D sensing segment will have the both the highest revenue and the highest CAGR, with consumer electronics accounting for much of that demand. North America was the largest segment of the market in 2020, though the Asia Pacific region will exhibit the most growth during the forecast period.
Meticulous identified Lumentum, II-VI Incorporated, and Broadcom as some of the key players in the VCSEL space. The firm’s $3.73 billion figure is not far off from the $2.7 billion, five-year figure that Seoul Viosys cited during the recent launch of its new VCSEL offering.