Advanced Optics Market Size, Share & COVID-19 Impact Analysis, By Technology (Ray, Wave, and Quantum), By Application (LiDAR, Lighting Solution, Optical Communication, Intelligence, Surveillance & Reconnaissance (ISR), Medical Equipment, Camera, Metrology Devices, 3D Scanner, and Others), By End-use Industry (Commercial, Industrial, Defense, Medical, Aviation (Drone), Automotive, Space, and Others), and Regional Forecast, 2021-2028

The global advanced optics market size was USD 242.45 billion in 2020. The market is projected to grow from USD 250.93 billion in 2021 to USD 477.42 billion in 2028 at a CAGR of 9.62% in the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with advanced optics witnessing a negative impact on demand across all the regions amid the pandemic. Based on our analysis, the global market exhibited a decline of 18.6% in 2020 as compared to the average year-on-year growth during 2017-2019. The rise in CAGR is attributable to this market’s growth and demand, returning to pre-pandemic levels once the pandemic is over.

Advanced optics solution is made using an optical component such as optical mirror, optical lenses, or prism and optical material. The optical solutions provide numerous advantages such as secure communication, low weight, high bandwidth, high flexibility, low power consumption, and high efficiency. Due to these advantages, the advanced optical system and components are extensively used in a variety of applications, including high-resolution microscopy, gyroscope, lithography system, electro-optical/infrared (EO/IR) system, displays, windows, medical equipment, imaging system, metrology devices, lighting solutions, security and surveillance system, spacecraft system, ophthalmology and retinal imaging, and drone components among others. The growing adoption of the optics in these applications is anticipated to drive the market growth during 2021-2028. The several end-use markets, including semiconductor, industrial manufacturing, consumer electronics, defense, and aerospace, are actively involved in developing robust optical solutions to enhance their application performance and efficiency. The growing digitalization and adoption of artificial intelligence, industry 4.0 technology, focus on next-generation product development, large investment in defense, space, and R&D activities are major factors supporting the market growth during the forecast period.

• In April 2021, in the U.S., the air force research laboratory approved a collaborative agreement between AFRL’s nano-electronic materials branch and iris light technologies to develop hybrid silicon lasers, which are a part of silicon photonics.

COVID-19 IMPACT

Disruption in Supply Chain During Pandemic to Decline Growth

The pandemic has resulted in restrictions on international trade activities and all industrial operations. Several companies are involved in designing and developing advanced optics solutions for various end-use industries such as commercial, industrial, defense, medical, aviation, automotive, space, and others. Among these, the medical (healthcare) industry witnessed an increase in demand for advanced optical medical instruments during 2020-2021 to provide the best treatments to the patient. Moreover, this market witnessed an increase in demand for drones amid pandemic to deliver medicine in rural areas and provide improved surveillance capabilities. The rising demand for drones is surging the demand for advanced optical solutions. However, the market witnessed a moderate impact of COVID-19 due to disruption in supply chain analysis. According to the Society of Photo-Optical Instrumentation Engineers (SPIE) organization released report 2020, 75% are small and medium scale companies out of total OEMs. These small scale companies have witnessed a huge impact on their revenue generation due to temporary shutdown amid COVID-19 pandemic. This factor resulted in limited investment in research and development activities.

LATEST TRENDS

Adoption of AI in Advanced Optics to Spur Various Opportunities in Near Future

Artificial intelligence (AI) is a broad field of science that allows computers to solve problems by simulating complicated biological processes like learning, reasoning, and self-correction. AI entities and systems can mimic biological processes to conduct operations similar to learning and decision-making, focusing on human cognitive processes. The adoption of AI in optical solution has become an area of research over the past decade. Furthermore, for the adoption of AI in optical communication convolutional neural networks (CNNs), recurrent neural networks (RNNs), generative adversarial networks (GANs), deep reinforcement learning (DRL), end-to-end learning based on auto encoders, and their variants have made significant contributions to fields such as network traffic data, routing, resource allocation, automatic configuration.  AI is widely used for the proactive detection of fiber cuts. THE Nokia GMPLS wavelength routing solution provides a solution for power network protection and restoration capabilities. This computes backup fiber routes to reconfigure network resources to use higher routes.

DRIVING FACTORS

Rising Demand for Photonics Enabled Products to Enhance System Efficiency to Aid Growth

Primary uses of photonics devices are fiber optic telecommunication, optical data storage, displays, laser printing. Photonics-enabled devices offer higher energy efficiency, longer product lifespan, better precision, and faster operation. As a result, consumers are turning to photonics-enabled devices. Photonics developments such as LiDAR and additive manufacturing are on the rise. The photonics devices are used for high bandwidth, multi-channel wavelength compiled with optical communication.

• In August 2021, Bridger photonics and southern California gas company signed a USD 12 million contract to survey gas leaks with its LiDAR technology.

The photonics market is primarily driven by silicon-based photonics applications. In telecommunications and data center applications, hybrid silicon lasers (silicon and group III-V semiconductor) are utilized, which benefit from the light-emitting capabilities of III-V semiconductor materials.

• In February 2021, iXblue photonics and photonics Bretagne signed an agreement on distributing microstructured and multicore fiber worldwide. These new fibers are used for applications in industrial and medical lasers, in the field of sensors (temperature, strain).

Rising R&D Investments in Advanced Optics Technology to Fuel Market Growth

Adaptive optics were first developed for the defense industry and are widely employed in several defense applications, including wall imaging systems, missile protection systems, and others around the globe. With its large defense budgets and well-developed industrial defense complex, the U.S. continues to use adaptive optics to develop high-energy laser systems and other uses. There is continuous research on the applications of optical system in healthcare across universities and research laboratories globally. Fiber optics sensor in the medical field helps to monitor pressure, temperature, oxygen concentration. Furthermore, fiber optics cables used in medical devices can be used in other applications such as remote spectrophotometry, endoscopic imaging, pressure, and position sensing.

• In February 2021, the government of India allocated USD 195.00 million for telecom infrastructure that includes the completion of optical fiber cable-based network for defense services. In July 2020, Europe’s terabit-ready network GEANT collaborated with Infinera’s 600G optical transmission technology for its next development phase.

RESTRAINING FACTORS

Complex Design and Optimization of Space Optical Solutions to Impede Market Growth

Space optics is difficult to implement due to the complexity in designing and optimizing robust optics systems. Various factors such as space environment that imposes thermal conditions, cold background, operational variations, and varying temperature gradient, are to be considered for optimization of the material. Furthermore, the market for adaptive optics is being held back by the intensive computations necessary for modern optical system modeling and the difficulties in detecting non-common path aberrations (NCPA). When using an adaptive optics system to generate modified images in a cosmic instrument, non-common path aberrations (NCPA) are a common problem. The most common method for correcting NCPA is to induce an offset in the Wavefront Sensor (WFS) signals that correlate with the corrected aberration.

To overcome such difficulties, researchers have developed various instruments like James Webb Space Telescope (JWST) and Laser Interferometer Space Antenna (LISA), which can sustain such conditions and higher prices. These factors are expected to hamper the advanced optics market growth.

SEGMENTATION

By Technology Analysis

Quantum Optics Segment to Witness Fast Pace Growth Owing to Rising Investments in Development of Energy Efficient Solutions

Based on technology, the market is divided into ray, wave, and quantum.

Quantum optics segment is estimated to be the largest segment in the base year. This segment is also projected to be the fastest-growing segment during 2021-2028. Rising investment in the development of energy-efficient advanced photonics solutions is anticipated to fuel the market growth. In addition, the rising demand for quantum optics solutions by several end-use industries, including telecommunication, semiconductor, medical, defense, and space, supports expanding the market size during the projection period.

• In July 2021, ADVA Optical Networking SE had launched the industry’s first optical transport solution secured by post-quantum cryptography (PQC). The FSP 3000 ConnectGuard optical encryption solution protects data against quantum computers' cyberattacks that could break today’s cryptographic algorithms.

The wave optics segment held the lowest market share in 2020. However, the segment is expected to witness significant growth during the forecast period. Increased demand for Light Detection and Ranging (LiDAR) solutions from the defense industry is expected to support the market growth.

By Application Analysis

Optical Communication Segment to Grow at Higher CAGR Owing to Growing Smart City Projects

Based on application, the market is classified into LiDAR, lighting solution, optical communication, Intelligence, Surveillance & Reconnaissance (ISR), medical equipment, camera, metrology devices, 3D scanner, and others.

The lighting solution segment registered the largest market share in 2020 and is anticipated to remain dominant throughout the forecast period. The growing smart city projects worldwide are propelling the demand for advanced LED lighting solutions with control technology. In addition, the rising use of optical laser light enabled systems for precision manufacturing is anticipated to boost the market growth. The segment's growth is further driven by declining cost-per-watt of LEDs, and higher value-adds in smart and human-centric lighting systems.

The optical communication segment is expected to grow at the highest compound annual growth rate during the projection period. The segment's growth is attributed to the increasing development in the telecommunication industry. The surge in demand for advanced optical network solutions to enhance performance is anticipated to boost the market growth. Moreover, the growing penetration of 5G technology fuels the demand for optical communication solutions.

By End-use Industry Analysis

Commercial Segment Dominated the Market Growing Adoption of Optical Solutions in 2020

Based on end-use industry, the market is divided into commercial, industrial, defense, medical, aviation (drone), automotive, space, and others.

The commercial segment registered the largest share in the market in 2020. The segment's dominance is due to the growing adoption of advanced photonics and other optical solutions for displaying pictures, lighting, mobile displays, AR/VR devices, and other consumer devices. In addition, the growing smart city projects in high growth regions to boost demand for optical LED lights.

The industrial segment held a significant share in the base year due to the growing semiconductor, telecommunication industries, and manufacturing industries worldwide. The rising adoption of industry 4.0 technology drives the demand for advanced optical solutions for industrial applications.

The space end-use industry is projected to be the fastest-growing segment during the forecast period. Increasing satellite launches and investments in space research and development activities are anticipated to propel the market growth.

REGIONAL INSIGHTS

The global advanced optics market is segmented into North America, Europe, Asia-Pacific, and the Rest of the World based on region.

Asia Pacific dominated the market in 2020. The market size stood at USD 96.98 billion in 2020 and is estimated to grow at the highest growth rate during the forecast period. The presence of several OEMs in China, Japan, India, South Korea, and Australia are anticipated to surge the market growth during 2021-2028. In addition, the growing smart city projects and developing telecommunication, aviation, defense, healthcare, and semiconductor industries in the mentioned countries to support the market growth during the forecast period.

North America registered a significant share in 2020. The rise in adoption of advanced optical technology such as quantum optics in defense, aviation, the industrial and commercial industry is anticipated to fuel the market growth in North America. In addition, large defense spending and the presence of several key players in the U.S. are supporting the expanding market growth in North America.

The market in Europe is projected to grow at a significant growth rate during the forecast period. Increasing semiconductor, healthcare, automotive, and manufacturing industries in the U.K., Germany, and France are expected to drive the market growth in Europe.

The market in the Rest of the World has witnessed slow growth amid the pandemic due to disruption in supply chain management. However, an increase in the adoption of photonics solutions to develop modern infrastructure in Saudi Arabia, and the UAE is expected to create lucrative growth opportunities in the market in upcoming years.

KEY INDUSTRY PLAYERS

Constant Product Innovation and Development Strategies Adopted by Corning Inc. to Endure position

Corning Inc. is a pioneer in developing advanced optics for industrial & scientific operations, ceramics, specialty glass, and related materials. The strong focus on R&D activities and product innovation to provide a variety of products to the customers can support the company to withstand its market position.

The other key players involved in the market focus on adopting advanced technologies such as artificial intelligence to enhance the production of highly efficient optical systems and components.

LIST OF KEY COMPANIES PROFILED

• Signify N.V. (Netherlands)


• Shin-Etsu Chemical Co. Ltd (Japan)


• Nikon Corporation (Japan)


• Cisco Systems Inc. (U.S.)


• Corning Inc. (U.S.)


• Hoya Corporation (Japan)


• Schott AG (Germany)


• II-VI Inc. (U.S.)


• GlobalFoundries Inc. (U.S.)


• AGC Inc. (Japan)


• Hamamatsu Photonics K.K. (Japan)


• Gooch & Housego PLC (U.K.)


• Excelitas Technologies Corp. (U.S.)


• Imagine Optic SA (France)


• Iris AO, Inc (U.S.)


• Boston Micromachines Corporation (U.S.)


• Flexible Optical B.V. (Netherlands)


• Active Optical Systems, LLC (U.S.)


• Northrop Grumman Corporation (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• August 2021 – Nikon Corporation announced a strategic collaboration with Aeva, a sensing and perception systems leader. The companies will focus on developing Frequency Modulated Continuous Wave (FMCW) 4D LiDAR with unique micron-level measurement capability for high precision industrial automation and metrology applications.


• July 2021 – Nikon Corporation signed a joint development agreement with Unistellar SAS to support the development of a digital astronomical telescope. This agreement is expected to provide innovative solutions for consumers in the astronomical observation field.

REPORT COVERAGE

The advanced optics market report provides a detailed analysis of the market and focuses on key aspects such as products, company profiles of key manufacturers, demanding technologies, and end-use industry. Moreover, the market research report offers insights into the advanced optics trends, competitive landscape, and highlights key industry developments. In addition to the factors mentioned above, the market report encompasses several direct and indirect factors that have contributed to the market growth in recent years.

Report Scope & Segmentation