Cars, data centers driving VCSEL market on steep growth path

December 14, 2016 // By Julien Happich
According to market research firm Zion Research, in 2015 the global vertical-cavity surface-emitting laser (VCSEL) market accounted for around $760.00 million but it the fast adoption of VCSELs in cars and data centers is expected to drive this market on a steep CAGR of around 21.3% between 2016 and 2021, eventually reaching $2,414.91 million by 2021.

VCSELs has gained a reputation as a superior technology for short-reach applications such as infrared illumination, fibre channel and intra-systems links and automotive, according to the report. VCSELs became the technology of choice for short-range datacom, local area networks, and effectiveness as displacing edge-emitter lasers. The use of VCSEL was mainly due to the VCSEL's lower manufacturing costs and higher reliability compared to edge-emitters.

Advancement in automotive electronics, growing number of data centers and increasing demand from high-end applications such as gesture recognition and 3D imaging are some of the major driving factors expected to propel the growth of VCSEL market in coming years.

The report ‘VCSEL Market by Application for Data Centers, Consumer Electronics, Automotive, Industrial, Healthcare and Others End Users: Global Industry Perspective, Comprehensive Analysis and Forecast, 2015 – 2021’ details how increasing demand of cloud computing solutions is expected to surge the growth of the VCSEL market in the near future.

Technologies like laser-assisted hard disk drive are also expected to open up new growth opportunities for the VCSEL market.

Data communication was the leading application segment with over 57 percent of share in 2015, and expected to maintain its dominance throughout the forecast period owing to the construction of new data centers for data analytics coupled with cloud computing solutions. Whereas the sensing application segment is expected to exhibit high growth in China.

North America was the largest market for VCSEL in 2015 and is expected to keep its dominance throughout the forecast period. Though Europe is expected to show remarkable growth, mainly driven by the rising use of VCSEL in consumer electronics. While Asia Pacific is considered to be the fastest growing regional market for VCSELs, growth in this region is mainly attributed to a growing number of data centres paired with a significant growth of the automotive sector in China and India.

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