LONDON--(BUSINESS WIRE)--The global fiber laser market is expected to post a CAGR of close to 13% during the period 2020-2024, according to the latest market research report by Technavio.
The additive manufacturing process has been using fiber lasers as an integral component to minimize material waste. Additive manufacturing process not only lowers the number of production steps but also decreases the number of parts needed for assembly. In addition, metal-based 3D printing processes such as laser material deposition and selective laser melting use fiber laser to fuse the metal powder and produce high-quality components. This has further encouraged vendors in the market to offer fiber lasers for the additive manufacturing process to produce prototypes and unique pieces. Thus, growing demand for additive manufacturing will boost the fiber lasers market during the forecast period.
The Chinese industrial laser market is experiencing a difficult time in 2019 after rapid growth over the past two years. As this is being written, the uncertain Sino-U.S. trade war has certainly worsened the situation. On one hand, fierce competition has led to a sharp drop in prices of lasers, especially those of fiber lasers and ultrafast lasers. On the other hand, unprecedented low selling prices make the application of laser technology even more cost-effective than many traditional manufacturing technologies, therefore making laser applications spread rapidly, especially in the sheet metal cutting, laser marking, and computer, communication, consumer electronics (3C) manufacturing markets. At the same time, the rise of improved domestic laser products is replacing imported ones, dramatically changing the whole laser industry landscape in the country that dominates global industrial laser revenues.
Chinese economic growth has been slowed for the last few years with annual GDP growth at 6.8% last year and 6.3% in the first half of this year. China’s manufacturing infrastructure is undergoing a transition from low value-added to high-end, smart manufacturing.
The photonics-based industry, with lasers at its core, is playing a big role in this transition. Last year, the strategic high-tech sector grew at much higher rates than the GDP growth at 11.7% and 8.9%, respectively, where lasers have found many applications. Many laser companies are doing relatively well compared to the impact experienced by other sectors, even though the slowing economy is impacting near-term revenues.
The shrinking market demand due to the slow economy, coupled with over-investment in lasers, encouraged and driven by the previous two good years, has caused domestic laser makers to cut their prices beyond a normal range. For example, the first-half 2019 revenue for fiber laser manufacturer Raycus is 1.012 billion RMB, a 34.75% increase from last year, while the company’s profit dropped 15.25% to 219 million RMB from last year mainly due to this lowering pressure. FIGURE 2 shows the typical price range for various power levels of fiber lasers in China. One has to keep in mind that this chart may have underestimated the price trend. In recent months, we found at least 10 domestic companies offering mid- and high-power fiber lasers.
Once the technical hurdles of making the high-power fiber lasers are overcome, more companies are going into the market, joining the competition. The consequence is a huge price drop for fiber lasers, especially in the power range of 2 to 6 kW. It is anticipated that this price erosion will soon spread to the 10 kW power range and beyond.
Fiber lasers have now become the main laser sources for material processing in China, taking more than 60% of the laser processing market. The positive effect of the laser price reduction is the rapid spread of applications where prices are sensitive to end users, especially in metal cutting, marking, and cleaning. In 2018, 30,000 units of mid-power and 6000 units of high-power laser cutting systems, as well as 130,000 units of laser markers, were sold in China.
2019 was an extraordinary year for China's laser industry. Both the trade war and the price war have brought opportunities and challenges to the development of China's laser industry. The result is the unprecedented consciousness and determination of laser manufacturers to innovate independently and to make more investment in R&D and in order to survive.