IR Light Source Market to Reach a Potential $6.5B Opportunity in 2023

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The development of new and smart functionalities in smartphone, medical and automotive applications as well as the development of breakthrough devices and functions such as wearables and virtual reality are pushing the growth of the IR LEDs and laser diodes industry. The IR light source market is expected to reach $1.8 billion in 2018 and increase to $6.5 billion in 2023 with an impressive 29% CAGR during this period.

Aim of this new analysis is to give a comprehensive picture of the forces driving the IR light source market and related technologies in a short, middle and long term period. Yole’s analysts propose an in-depth analysis of automotive, smartphone, and datacom/telecom applications. A comprehensive review of emerging applications is also detailed in this new IR LEDs & Laser Diodes report. In addition, Yole collaborated with its partner Knowmade, a technology intelligence and IP strategy consulting to propose a dedicated section focused on the LED, EEL, and VCSEL IP landscape including the timeline of IP activity, ranking of patent applicants, a detailed analyze of the historical players and new comers, etc.

“More than 40 different applications have been identified as integrating IR SSL sources”, explains Pierrick Boulay, Technology & Market Analyst from Yole Développement. “Among these, some are expected to make the IR LED and laser diode markets boom in the next five years,” he adds.

Optical communication, one of the oldest IR light-source applications, is still expected to be one of the major drivers in the coming years. Indeed, the amount of data exchanged on the internet is exploding, and will continue to do so with the emergence of the IoT , cloud-based services, autonomous cars, and more.

Driven by additive manufacturing, industrial applications are also expected to generate high revenue in the coming years. Traditional IR light sources that emit light in all directions and consume large amounts of energy are starting to be replaced by VCSEL that can be individually controlled, resulting in lower energy consumption.

After Apple, some key Android-based smartphone manufacturers are following a similar strategy and starting to release new products. Pars Mukish, Business Unit Manager, Solid-State Lighting & Display at Yole comments: “3D sensing is not limited to smartphones. It also has potential for automotive LiDAR, which is necessary for the development of ADAS. Not surprisingly, many start-ups in this field have entered the market in order to develop this technology and join the coming revolution.”

Finally, 3D sensing is expected to be the killer application for IR light sources. VCSEL’s integration in the iPhone X for facial recognition has generated much interest in 3D sensing: “In 2017 Apple released the iPhone X, with a 3D sensing function based on this technology,” asserts Pierrick Boulay from Yole in the VCSEL report’s press release. “It integrates three different VCSEL dies for the proximity sensor and the Face ID module, and made the VCSEL market explode in 2017, propelling overall revenue to about $330 million.”

Initially developed for optical communication applications, LED and laser diodes are now integrated into high-value functions. These technologies are part of a new revolution, with each one finding its own path:

• Initially focused on low-end applications (photo interrupters, remote controls, etc.), IR LEDs are now increasingly implemented into smartphones for proximity sensing; automotive for gesture recognition; and VR/AR headsets for eye tracking
• For EEL, the market has historically been driven by optical communication applications. This is likely to continue, given the always-increasing amount of data exchanged with optical fiber networks. However, in the mid-term the technology may also find strong growth relays in new applications, such as. LiDAR. Yole’s analysts had the opportunity to discuss with Dr. Joerg Strauss, Head of the Emitter Laser & Sensor Segment at Osram Opto Semiconductors to share their vision of the industry and get a deep understanding of the development of EEL-based solutions: “We believe within OSRAM that EEL laser will continue to be beneficial compared to VCSEL in LiDAR applications. Primary reason is the required laser power for LiDAR which is hard to achieve with a reasonable light emission area by VCSEL technology,” explains Dr. Strauss
• Today, vertical cavity surface-emitting lasers might be the fastest-growing technology. Having originally found its sweet spot in short distance data communication, Apple’s 2017 release of the iPhone X has completely changed the business landscape