China's laser and laser equipment industry currently has a combined market size of 65.8 billion yuan (2019), the industry was only 19.4 billion in 2013, 2013-2019 to experience up to seven years of positive growth. In terms of laser cutting, the penetration of laser for traditional cutting methods is about 26.26%-30.65%, and the proportion of high power (above 1500W) in laser cutting equipment is only 20.8%.
In laser welding, due to cost reasons, laser welding accounts for a smaller proportion of the welding market, and is currently used more in automotive, battery, precision metal processing, and optical communication, etc.
Ultrafast lasers have become the most prominent growth point in the laser market in recent years, growing at a CAGR of 70.5% from 2015-2019, while the global laser market is growing at a CAGR of only 11% from 2015-2019.
With more than 25 domestic companies engaged in the R&D and production of ultrafast lasers in 2019, the market space reached 2.45 billion yuan in 2019, which has grown into a market equivalent to 30% of the domestic fiber laser revenue volume.
Laser & laser equipment industry now has a combined market size of 65.8 billion yuan (2019), the industry was only 19.4 billion in 2013, 2013-2019 to experience up to 7 years of positive growth.
Laser processing industry: cutting has the properties of industrial consumables. It needs to broaden the emerging application scenarios and grasp the link with a competitive threshold.
1.1 Laser concept clarification and classification: the laser extends to low wavelength, high power and ultrafast direction
According to the wavelength, continuous fiber lasers generally belong to the near infrared light; IPG lasers are extending to lower wavelengths.
Fiber lasers, classified by wavelength of light, are generally from visible light to near-infrared light (between 500nm and 1.5μm), which is characterized by the strong absorption of light in this wavelength range by metals, and near-infrared light is suitable for metal processing.
According to IPG's annual report, lasers are being extended to lower wavelengths, and semiconductor lasers, visible light lasers (blue light, green light, etc.) and UV lasers are the main products they are currently expanding.
The traditional CO2 lasers and solid-state lasers (erbium solid-state lasers, thulium solid-state lasers, etc.) are in the mid-infrared and far-infrared wavelength range.
Among industrial lasers, fiber lasers have the best growth, solid-state lasers have grown in the past two years, and gas lasers are gradually shrinking.
Globally, fiber laser sales grew from $169 million to $2.603 billion from 2009-2018, or about $18 billion at current exchange rates, with a CAGR of 35.50% during the period; the share of fiber lasers in industrial lasers rose from 13.7% in 2009 to 51.5%.
Solid-state laser has a rapid growth in 2016-2018, from 470 million U.S. dollars to about 740 million U.S. dollars, during the CAGR of 25.5%, mainly due to the fast growth rate of ultrafast solid-state lasers.
Among all downstream uses of laser equipment, industrial processing is the most dominant application direction, accounting for 40.6% of all laser uses in 2019; down 4.4 pct compared to 2018.
Instrumentation and sensing (more applications in detection) and research and military applications become relatively fast-growing areas, with 8.4% and 12% in 2019, up 1.4% and 5%, respectively, compared to 2018.
1.2 Industrial laser overall market size and industry change pattern
The combined market size of China's laser and laser equipment industry currently reaches 65.8 billion yuan (2019), with the industry only 19.4 billion in 2013 and experiencing up to 7 years of positive growth from 2013-2019. We believe that industrial lasers as a whole belong to the general automation category.
In terms of growth, industrial robots (2013-2019 CAGR 25.74%) is followed by lasers (CAGR 22.54%), and injection molding machines (CAGR 8.82%) is followed by metal forming machines (CAGR of 0). However, the overall cycle fluctuations are more consistent, with relatively high boom in 2014 and 2017 and relatively low boom in 2015, 2018 and 2019.
1.3 Continuous laser market: cutting from growth to maturity, but still expected to maintain a fast growth rate
Laser processing penetration: in the view of the laser equipment, cutting and welding equipment market space
According to our estimates, the stock of cold cutting equipment in China is about 166,200 units, and the stock of thermal cutting equipment is about 100,000 units.
And according to the China Laser Industry Development Report (2019) and our estimation, the stock of laser equipment for cutting in China is 7~81.6 thousand units by the end of 2019; the penetration of laser for traditional cutting methods is about 26.26%~30.65%, without considering the efficiency difference.
The efficiency of laser cutting in the medium-thick plate scene is inferior to that of plasma cutting equipment, so the actual penetration may be lower than the above estimates; as the proportion of high power (above 1500W) in laser cutting equipment is only 20.8%, the penetration of high power for traditional medium-thick plate cutting methods is even lower.
Welding market space is large, laser welding accounted for a relatively small
The welding market has a vast space, with the combined annual revenue of metal welding and cutting manufacturers above the scale reaching 47,546 million (2019), according to the National Bureau of Statistics.
And the current volume of China's laser welding market is relatively small. Referring to the China Laser Industry Development Report 2019, the laser processing equipment market reached 60.5 billion in 2018.
Laser welding accounted for 16% of the overall industrial laser applications in 2017. Then the estimated volume of laser welding equipment is about 9.7 billion yuan (this estimate may be high because laser welding is more commonly used in the foreign automotive industry).
1.4 Ultrafast lasers: precision processing application scenarios emerge from rapidly growing emerging markets
Global laser industry market size in 2019: Global laser sales in 2019 were $14.73 billion, up 9.9 percentage points year-on-year compared to $13.76 billion in sales in 2018.
The trade war between the U.S. and China has been eased to some extent, and the import and export of laser products show signs of comeback. lasers continue to expand in the research and military markets in 2019, with a growth rate of more than 21%.
Market size of China's laser industry: the market for lasers in China grew in 2019 but began to slow down compared to the previous two years. The total sales revenue of the laser equipment market in the industrial, information, commercial, medical and research sectors was $65.8 billion, an increase of 8.8 percentage points year-on-year from 2018.
Ultrafast lasers have become the most prominent growth point in the laser market in recent years, with a compound growth rate of 70.5% from 2015-2019, while the global laser market grew at a compound rate of only 11% from 2015-2019.
There are more than 25 domestic enterprises engaged in the R&D and production of ultrafast lasers in 2019, and the market space reached 2.45 billion yuan in 2019, which has grown into a market equivalent to 30% of the revenue volume of domestic fiber lasers.
The laser industry chain is long and the market is large, thus there are a large number of listed and unlisted companies.
The trend in recent years: the segmentation is becoming more and more specialized. In terms of competitive intensity, laser equipment is more competitive than lasers and laser materials & devices.
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