VCSEL market on a 13.6% CAGR 21-26

The moble and consumer segment is expected to grow to $1.7 billion in 2026 at a 16.4% CAGR21-26.

The automotive & mobility segment is expected to grow to $57 million in 2026, at a CAGR21-26 of 122%.

The new multi-junction technology represents the next leap forward for the VCSEL industry.

VCSEL manufacturing moved from 4” to 6” manufacturing and could soon move to 8” manufacturing.

Another trend is emerging: the integration of 3D-sensing modules under the OLED display, which could disrupt the traditional manufacturing chain.

Two companies dominate the VCSEL market: Lumentum and II VI are taking about 80% of the VCSEL market.

VCSEL technology is continuously evolving. It has already occurred in the past with the transition from 850nm-based VCSELs for datacom applications to 940nm-based VCSEL arrays for 3D sensing applications.” says Yole’s Pierrick Boulay, “a few years ago, smartphones embedded a notch in the front display to implement the selfie camera and the face recognition module. These elements take up space and are unsightly. The goal is to hide these elements under the display. To enable this, a transition in the wavelength used for 3D sensing would be necessary for the light to penetrate the display.”

The VCSEL market is expected to increase from $1.2 billion in 2021 to $2.4 billion in 2026 at a 13.6% CAGR during the 2021-2026 period.

This market is dominated by the mobile and consumer market, which will grow from $797 million in 2021 to $1.7 billion in 2026 at a 16.4% CAGR.

Revenues linked to smartphones are expected to remain stable in 2021 and 2022 because of the decreasing adoption of 3D sensing modules by Android players.

In 2021, only Apple is implementing VCSELs and developing AR applications. This will create a relatively flat market for two years. Growth could be back after that with Android players.

Data communications is the second biggest market, expected to generate revenue of $430 million in 2021 and expected to reach $566 million in 2026 at a CAGR of 5.6%.

The automotive market is quite small in 2021 with revenue of US$1.1 million but is expected to reach $57 million in 2026 at a CAGR of 122% with applications in LiDAR and driver monitoring.

Industrial applications are expected to generate revenue of $16 million in 2021 that could reach $21 million in 2026 at a CAGR of 6.3%.

Industrial revenue could take-off at mid-term with the emergence of applications using 3D LiDARs. These applications will be related to smart infrastructure and logistics.

It appears that OLED displays are transparent to SWIR light, around 1300 to 1400 nm. The shift from 940nm to such SWIR wavelengths will deeply impact the components and the supply chain.

For 940nm, VCSELs are made from 6” GaAs wafers. SWIR VCSELs should be based on InP , which is much more difficult to process, and manufacturing is currently done on 2” and/or 3” wafers.

“The impact is not limited to the light source but also to the receiver, where silicon-based SPADs are used in the NIR region,” says Yole’s Pars Mukish, “silicon can no longer be used in the SWIR region. SPADs will have to have to be based on InGaAs material or using quantum dots. In both cases, the technology is still emerging, manufacturing yields are low, and availability of components is limited. This will lead to higher component costs for both the emitter and the receiver”.

Only Apple, whose smartphones have ASPs higher than $1,000, can afford such a technology change.

Smartphones are not the only application where technology is evolving. Automotive applications, and LiDAR in particular, will benefit from recent developments. Multi-junction technology represents the next leap forward for the VCSEL industry.

The multi-junction VCSEL offers many significant benefits to users.

Multi-junction VCSELs, in a back-side emitting configuration, would have several advantages over their conventional sibling.

Eliminating wire bonds would improve the VCSEL performance and allow the use of micro lenses to have more compact packages

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