Laser industry status in China
Since 1997, the Chinese government has encouraged the development of laser processing technology and associated equipment as an industry. At the same time, the laser processing equipment industry in China has met the growing market demands, experiencing fast development in recent years. In the next five years, the market demand for laser products in China will exceed RMB 60 billion (~$9.1B).
Since 1997, the Chinese government has encouraged the development of laser processing technology and associated equipment as an industry. At the same time, the laser processing equipment industry in China met the growing market demands, experiencing fast development in recent years. In 2008, the market value reached RMB 3.35B (~$505M), which was an increase of 21.2% compared to the previous year.
In a market investigation report (China Report Hall) on the 2009 consumption trend, laser equipment was still in demand, with the domestic laser equipment situation changing from being dominated by low- and middle-end products to the high end. The market share of imported high-end laser equipment was continuously growing, and the domestic and overseas market share of domestic laser equipment was increased by improving the level of products through self innovation. With the fast industrialization and the continuous upgrade of the Chinese manufacturing industry, it is expected that the laser processing equipment industry will continue to maintain a high growth rate of 20 to 30% in the next three years under the drivers of high-power and high-value-added products. In the next five years, the market demand for laser products in China will exceed RMB 60 billion (~$9.1B).
Currently, there are five state-level laser technology research centers and more than 10 research institutes in China. Twenty-one provinces and municipalities produce and sell laser products, and more than 200 manufacturers produce and sell these products. Currently, the laser enterprises are mainly located in provinces and municipalities with developed economies such as Hubei, Beijing, Jiangsu, Shanghai, and Guangdong (including Shenzhen and Zhuhai Special Economic Zones).
Today, four laser industry clusters have been formed in central China, in the regions around Bohai Bay, the Yangtze River Delta and the Pearl River Delta, led by the above provinces and municipalities. A complete laser industry chain has been established for the laser crystals, key parts and components, accessories, lasers, laser systems, application development, and the public service platform. Undoubtedly, this provides a larger development space for the laser industry in China.
Trends of key companies
There are interesting trends in the China market for materials processing lasers. According to the latest announcement, estimated 2010 revenues for industry leader Han’s Laser Technology Co. Ltd. is RMB 2.46B (about $371.2M), a 26% growth from 2009 revenues of RMB 1.95B (about $294.3M), and analysts' projections for 2011 is RMB 3.07B (about $463.3M), a 25% increase. Currently, the company has sold 100 high-power fiber laser cutting systems in 2010 (data info from contracts), and they project sales will reach more than 150 this year.
The introduction of 200 W and 400 W CW fiber laser products from Wuhan Raycus Fiber Laser Technologies Co., Ltd. enables significant cost savings for users. The company is a relatively new player in this market sector.
Mr. Deng Honglin, vice director of the Laser Processing Committee of the China Optical Society and a member of the Industrial Laser Solutions – China Editorial Advisory Board, says the gap in products and prices between foreign and domestic suppliers has been narrowed by enhancing self development and mass production of laser cutting equipment and through the localized production of foreign companies in China. Ever-increasing recognition of the native products in domestic markets now accounts for up to 80% in 2010.
According to Mr. Deng, the number of high-power CO2 laser cutting equipment with output power over 1 kW will reach 1,000 units, accounting for 20 to 25% of the global market.
The number of first-rank manufacturers, such as Shanghai Unity Prima Laser Machinery Co. Ltd., Han’s Laser, Wuhan Farley Laserlab, and Penta Chutian Laser, has significantly increased. This is especially true of Shanghai Unity Prima Laser, a leading manufacturer of laser cutting machines that accounts for 30% of the China market.
Mr. Deng says that the prosperous Chinese market is driven by the expansion of domestic demands. The real impetus is the benefits of this processing technology, particularly in high end markets such as railway, iron and steel, engineering machinery, automobile and shipbuilding, aviation and aerospace, as well as the military, where demand is strong.
Mr. Deng considers it difficult to forecast the 2011 market, but is convinced that while the market was booming in 2010, it will not fall significantly this year. And in China, as a manufacturing power, the lowest quantity demand will at least 10,000 units. He recalls the total for the years before 2000 was only 280 units.
The industrial chain of high-power laser cutting equipment in China is still far from established, and today the country has not produced any new high power lasers with intellectual property rights, whether for lasers or cutting equipment. Regardless of the key parts or components, laser users still have to rely on imports.
He thinks that fiber laser technology is the current focus with Rofin and TRUMPF acquiring Nufern and SPI. At the 2010 Shanghai Laser World of Photonics China last spring, Rofin showed a 2 kW fiber laser, however, IPG Photonics is still dominating the world market.
Mr. Deng is pleased that the experts with doctorates returning from overseas have started Wuhan Raycus Fiber Laser Technologies Co. Ltd. and Xi'an Focuslight Technologies Co. Ltd. to research and develop high-power fiber lasers and diode laser pump sources. And it is expected that 4 kW CW fiber lasers with individual intellectual property rights will soon be presented to the public.
Ms. Zuo Tiechuan, director of the Laser Engineering Research Institute, Beijing University of Technology, points out that although China is a large manufacturing power, the overall level of technology is underdeveloped, and it can be said that it is only an assembly industry, and almost all the core technologies are under control of others. In her opinion, China should pay significant attention to the development of laser manufacturing technology. In the manufacturing technologies, if more lasers are used to take the place of the traditional technologies, the overall manufacturing industry in China will be greatly improved.
In terms of laser technology, Ms. Zuo thinks the focus of development should be in direct semiconductor lasers with high absorption rate and high energy usage rate. Compared to CO2 and solid lasers, the benefits of semiconductor lasers lie in its outstanding features: shorter wavelength, low footprint, high efficiency, excellent coupling with fiber optics, easy modulation, and reduced cost.
Ms. Fu Jun, chairwoman of the Board of Directors of Wuhan HE Laser Engineering Co., Ltd., says that, according to incomplete statistics, there are about 30,000 sheet metal working enterprises from medium scale to large scale in China, engaging about 1.8 million employees, producing a total of over 42 million tons of sheet metal working products per year, with annual sales of RMB 500B (more than $75B). However, the sheet metal working industry in China has a limited amount of production processes, talents, equipment, and technology, and the number of enterprises with these factors and special features is not high.
This report was prepared for Industrial Laser Solutions – China by Lora Xie, senior industry research manager, and adapted and edited by David A. Belforte, editor-in-chief of Industrial Laser Solutions.