The photonics industries in a pandemic context – 2020 Forums by Yole Développement and the CIOE
We at the China International Optoelectronic Exposition (CIOE), which was held as a hybrid event in Shenzhen and online in September, wanted to interview one of our main partners, Yole Développement (Yole) and their Photonics team. Read on to discover our discussion.
CIOE: Could you please give a round-up for the insights presented by analysts at the Yole and CIOE forum for all sectors, including silicon photonics and optical transceivers, imaging and Light Detection and Ranging (LiDAR) for automotive, 3D sensing for consumer electronics, machine vision and infrared sensing for industry.
Alexis Debray, Technology & Market Analyst, MEMS, Sensors & Photonics: Concerning silicon photonics and optical transceivers, the optical transceiver is a unique device which significantly contributes to transporting data over a network, enabling the highest speeds. The future of the optical communication sector doesn't seem to be too negative if the manufacturing and implementation of optical systems and modules restarts rapidly after the COVID-19 pandemic. One of the strategic trends in the optical transceiver industry is disaggregation of the supply chain according to Yole's report Optical Transceivers for Datacom & Telecom 2020. High cost pressure in the advanced optical module business may force many suppliers to abandon the vertically integrated component design and module manufacturing approach.
Silicon photonics has become an established business in optical telecommunication with $480M revenue in 2019. The silicon photonics industry is enabling new applications, including fiber-optic gyroscopes (FOG) and immunoassays as explained in our Silicon Photonics 2020 report. Also, silicon photonics will become a key technology for optical communications around 2025 with the realization of co-packaged optics. In 2025, the silicon photonics market is expected to reach $3.9B.
Concerning imaging and LiDAR for automotive, cameras are key sensors used for Automatic Emergency Braking (AEB), which is installed in more than 38% of vehicles. In the 3D Imaging & Sensing 2020 report The camera module market was valued at $4.1B in 2019 and is expected to reach $8.1B in 2025. More and more cameras will be integrated in cars and up to eleven cameras could be found in high-end vehicles in the next five years.
LiDAR entered the Advanced Driver Assistance System (ADAS) market in 2017 with Audi and Valeo. Several projects between car making OEMs and LiDAR manufacturers are under way, with releases expected in 2020, 2021 and 2022. Even with a modest adoption of 3.2% in 2025, the ADAS LiDAR market is expected to reach $1.7B by this date according to LiDAR for Automotive and Industrial Applications 2020 report.
Richard Liu, Technology & Market Analyst - Imaging: Concerning 3D sensing for consumer applications, in the consumer market, especially mobile phones, 3D sensing has gone through several rounds of updates. The iPhone X adopted 3D structured light initially in the front. G8 ThinQ then tried to use indirect Time of Flight (iToF) for face or posture recognition. Then from the Android camp's use of iToF, Apple used direct ToF (dToF) for image enhancement and augmented reality (AR) applications in the rear of the phone. In the future, it's expected that there will be an under-screen 3D camera and killer AR applications. No matter how it changes, 3D sensing is on an upward trend. In 2019, 3D sensing has already reached $2.4B revenue in the mobile phone market and is expected to reach $8.4B revenue in 2025.
In non-mobile consumer areas, 3D sensing is also developing rapidly, for example in ranging and environmental sensing in sweeping robots and consumer robots. Face and posture recognition in smart locks and smart TVs are also gaining popularity. In this area, there are more technologies available such as active stereos.
In short, the massive adoption of 3D sensing in the mobile phone market will attract more participants, update technologies faster and reduce costs. This will drive the consumer market to promote 3D sensing in more products in the future.
Dimitrios Damianos, Custom Project Business Developer and Technology & Market Analyst: Concerning machine vision and infrared sensing for industry, the world has entered a new era of social and physical distancing. Monitoring and imaging systems are therefore becoming even more crucial to our society. This is even truer in what is broadly known as the industrial domain. Machine vision is already a key component of manufacturing and logistics. It is now expanding into new territories, such as smart farming, autonomous transportation and mobility, smart offices, and smart cities. New technologies are on the verge of revolutionizing the interactions of humans and their environment, such as 3D sensing, hyperspectral imaging, and event-based imaging. Similarly, thermal cameras are becoming key for machines to detect humans. The market reached more than 1.6M units and more than $4.5B in revenue in 2019. During the COVID-19 crisis, it appeared as an important tool to monitor people's temperature and was implemented at numerous sites. It is also gaining traction as a key sensor for autonomous vehicles and has been chosen by numerous players such as GM Cruise, Veoneer, and Nuro to name a few. According to Yole's report Thermal Imagers and Detectors 2020,in general, the global thermal camera market is expected to spike to $6.6B in 2020, due to the elevated skin temperature (EST) application and adoption of such systems in various infrastructure contexts for fever detection.
CIOE: No LiDAR has yet passed the traffic regulations in China. That seems to be because, when there's an accident involving an autonomous car, it's hard to tell who should take the responsibility. This situation seems set to continue to last very long time.
China has suggested developing Intelligent Vehicle Infrastructure Cooperative Systems (IVICS) to enable autonomous driving. But not even this can overcome the obstacle for ADAS or autonomous driving (AD) in China. So do you think LiDAR in China is developing well in technology only, but will not actually form a very good market?
Pierrick Boulay, Technology & Market Analyst, Solid-state Lighting: It is true that one of the obstacles to the deployment of autonomous driving will be linked to responsibility in case of accident. At level 3 automation and above, the car making OEM will be liable for accidents and crashes when the machine driver is in control. The key question, especially for level 3, will be the handover period when the machine driver wants to hand back control to the human. How long will it last? Who will be responsible during this period? Answers are still unknown.
Regarding the technology side, China is developing well in LiDAR technology. We have also seen a recent partnership between Great Wall Motors and Ibeo to equip an ADAS vehicle with a LiDAR. The partnership does not say if the final vehicle will be level 3 or not but that is a first step in starting the market for automated driving in China.
CIOE: What has COVID-19's influence been in 2020? What are the changes in the way people buy and sell, network, or the way they think, or anything you think matters?
Eric:The COVID-19 pandemic is an almost unique phenomenon in world history. The consequences of the pandemic on the global economy and on social life are devastating. On the industrial side, the COVID-19 pandemic has caused strong pressure on the supply chain. Because of the first lockdown in many countries, several factories reduced their activity, some for a relatively short time, days or a couple of weeks, but others for a longer time, several weeks. Today, the situation is better, especially in China. In Europe and North America, where a second wave has arrived, the manufacturing industries have set up strong sanitary requirements for the workers to safely return to work. For those who cannot return to their offices, there has been an increased consumption of home office supplies, such as computers, laptops, printers and displays for working from home. This has boosted the consumer, networking and telecommunication markets. On the other hand, the demand for mobile devices has been very low in Q2 and Q3 due to COVID-19. In such times of uncertainty, people preferred to save money and did not consume. Despite the usual wave of end-of-year consumption, there will be no positive market growth in 2020 for smartphones. But COVID-19 also boosted the use of technologies that can help restrain virus propagation, such as thermal imaging of elevated body temperatures, PCR-based diagnostics and disinfection systems based on UV-C LEDs. So, despite the pandemic, the massive scale of remote work as well as the extension of certain COVID-19 prevention technologies has boosted certain areas of the semiconductor industry.
CIOE: We know Chinese optoelectronic companies are doing fine even under COVID-19. Is this also true for the EU market?
Eric: Europe has a strong position in optoelectronics and photonics. We have strong industrial players in infrared imaging. We are very creative in photonics, with a lot a startups being created in integrated photonics or quantum photonics, for example. Moreover, the European photonics industry is supported by strong R&D institutes such as CEA Leti, Fraunhofer Institutes and IMEC. At Yole we believe the challenge for Europe is to take the right measures to fight the pandemic, not to suffer many lockdowns and to stay ahead of the world. Photonics is a key enabling technology for Europe. As such, the European Commission has set up support projects such as the European technology platform Photonics21, which unites the majority of the leading photonics industries and relevant R&D stakeholders along the whole economic value chain throughout Europe.
CIOE: Could you give us your opinion on how the landscape will change in two or three years assuming COVID-19 is still causing problems?
Eric: At Yole we hope COVID-19 will be under control in two to three years as the recent announcements of an efficient vaccine by Pfizer-BioNTech and Moderna is very promising! In case COVID-19 is still very present in two to three years, we cannot imagine another solution beyond massive use of home working when possible and strong containment protocols for manufacturing industries for the economy to keep going on. Travel would be highly controlled. However, massive deployment of sensors for controlling COVID-19 propagation, such as CO2 and aerosol sensors or thermal imagers in public areas, airports and schools, and cleaning technologies based on UV, for example, will secure travel and social networking.
CIOE: What are the three latest Yole reports which you think Chinese professionals shouldn't miss?
Eric: First, Thermal Imagers and Detectors 2020, because thermography is benefiting from COVID-19 mitigation attempts and pushing the thermal camera industry to $6.6B in 2020. Then, Power SiC: Materials, Devices and Applications 2020, because SiC-based design wins have multiplied for electric vehicle applications and will drive the SiC market beyond $2.5B by 2025. I also recommend Status of the Memory Industry 2020 – Focus on Kioxia, because it focuses on Kioxia and analyzes new Chinese players.
CIOE: If you were to predict one hot selling product in the next two years, what product do you think it would be and why?
Eric: As the world lockdown has led many employees to work from home, there will be a massive uptick in the demand in telecom, infrastructure, and data centers. At Yole we think that topics such as 5G, High Performance Computing (HPC) and artificial intelligence (AI) will be hot topics in the next couple of years. We see also growing interest for quantum technologies, specifically for computing for future applications in medical, smart grid, internet of things (IoT) or robotic vehicles. Although it is not a short-term market, we believe there will still be a stronger interest than today in two years, with major advancements.
CIOE: How do you think the hybrid online and offline organization for the Yole and CIOE forums went in 2020?
Julie Robert, Marketing & Communication Project Manager: Implementing online and offline access to the forums was quite a challenge. Of course we will have some improvements to make for next time, but we are very pleased and proud of the result. Together with CIOE we have succeeded in keeping these forums international, with foreign speakers and attendees. And we will try our best to improve the next editions to provide attendees networking and quality contents.
CIOE: Any new thoughts for the Yole and CIOE 2021 forums yet? What new subjects may we expect?
Eric: Over recent years, we have seen continued and strong interest for topics such as silicon photonics, thermal imaging based on uncooled IR technology, 3D sensing and LiDAR. I believe they will still be strong focuses in 2021 as technology and market development continues. I also imagine new topics could attract strong interest from the optoelectronics community, such as 5G or quantum photonics. Stay tuned to discover the next Photonics Forums.
Interview conducted with the Photonics team of Yole Développement:
PhD, Director of Market Research
PhD, Technology & Market Analyst, MEMS, Sensors & Photonics
Technology & Market Analyst - Imaging
PhD, Custom Project Business Developer and Technology & Market Analyst
Technology & Market Analyst, Solid-state Lighting
Marketing and Communication Project Manager