Survey: Industrial laser demand up modestly, cautiously optimistic
Longbow's Mark Douglass takes the latest lay of the land in industrial laser materials processing. We'll be gathering more clarity at next week's Lasers for Manufacturing Event (LME), with your help.
October 19, 2012 - Market demand for industrial lasers remains modestly positive vs. sentiments at this time last year, with mid-single-digit growth mostly in line with expectations against a larger backdrop of weak industrial manufacturing, according to analysis from Longbow Research's Mark Douglass.
Here's a short list of key takeaways from his laser/optics 3Q12 survey:
- Demand is modestly positive, though moderating slightly: Demand is generally slightly weaker than the mid-/high-single-digit growth seen in 2Q12. By region, growth is flat to up in the US region (slower than 2Q12), China is experiencing high-single-digit growth (somewhat better than 2Q), Germany and France are slightly lower at mid-/high-single digits, Mexico "is very strong," and Brazil "continues to weaken due to difficult auto and Ag markets." Some respondents reported an increase in Chinese OEMs in laser cutting and engraving, though not so much in the US as in Asia and Europe.
- Top technology trends: By technology, low-power laser marking and engraving is seeing "robust" demand (high single-digit/high double-digit growth Y/Y). 2D laser cutting is flat to up slightly, but there is "a wide range" of activity within that, framed by "outliers" of -20% to +25% Y/Y growth which Douglass attributes to some marketshare shifts. Job shops and general manufacturing continue to show interest in both CO2 and fiber laser systems, though they are not "pulling the trigger" on investments due to tight budgets. Many indicated major investment decisions would come (or not) after EuroBlech in October (for European markets) and Fabtech in mid-November (for US purchasers). Election "jitters" are also keeping a lid on budgets, Douglass noted.
- Fiber lasers still surging: Fiber lasers continue to gain acceptance and market share; "the current product mix favors fiber laser systems vs. other solid state lasers and CO2," Douglass notes. In 2D cutting applications fiber laser has been more rapidly embraced than expected; this should continue in 2013, he says. He cites IPG's inroads into Aero drilling with its Q-CW laser (more on that below), and further advancements from RSTI/Nufern's low-power laser capacity and Trumpf's diode laser output
- Cautiously optimistic outlook: No surprise that key European end markets (Germany, France) are still weighed down by the broader and persistent EU crisis. US outlook now has "deteriorated modestly" since Longbow's 2Q12 survey, with fewer "positive" and more "negative" respondent opinions, though mid-single-digit growth is still the main expectation which would be flat with 2Q12. Internationally, outlooks also tended toward optimistic though slightly less so than a quarter ago, averaging low-/mid-single-digits.
Some interesting specific commentary about lasers in end-markets identifies auto and oil & gas as "notably strong," along with firearms, medical, and heavy equipment:
- Auto: Lasers in auto manufacturing run the gamut from low-power marking and engraving to high-power cutting and laser welding. At American and Japanese auto plants, fiber and solid-state lasers are increasingly used for cutting and welding applications, Douglass explains, due to model changeovers/updates and the increasing use of lightweight materials (e.g. hot-stamped boron steels) to help achieve fuel efficiency targets. Another laser trend in auto is shifting to fiber from CO2/disk for transmission gear welding.
- Agricultural: Growth in the agricultural equipment sector is moderating to be likely flattish in 2013 as a capex cycle winds down, Douglass notes. This sector is making "initial forays into fiber/disk" lasers.
- Oil/gas: Equipment OEMs "are investing significantly" in laser marking/engraving systems.
- Medical: Demand in medical devices is also strong, particularly for laser marking, spurred in part by the recent FDA proposal for a Unique Device Identification (UDI) system; the program is expected to be defined in April 2013.
- Aerospace: A steady market for industrial lasers, there is now some buzz about trials drilling with IPG's Q CW lasers. High-power continuous-wave lasers have been shown to be "moderately successful" in simulated pulsing conditions but are much more expensive than conventionally used flash-pumped Nd:YAG lasers. The cheaper Q-CW lasers, though (in which the laser achieves high peak powers during a pulse, but with lower average power), seem to point the way for an inroad for fiber lasers to unseat this Nd:YAG installed base, Douglass says.
Next week ILS will be at the LIA's Lasers for Manufacturing Event (LME, Oct. 23-24) in Schaumburg, IL, talking with suppliers and end users -- and yes, analysts and investors -- to get both a broader and more granular lay of the land for industrial laser material processing. Stop by and see us (booth #1026) and tell us what you're seeing and hearing about the market.