In the last decade, the laser market has experienced a period of significant expansion with rates of over 25%.
Starting from 2019, growth has settled around single-digit values, but this slowdown has not frightened the players in the sector since the trend has substantially aligned itself with macroeconomic cycles.
The same driving factors that had boosted laser sales in recent years (in particular China’s entry into the market for low-to-medium power laser machines), have led to a contraction in sales as world economies have faced a period of global recession and adverse tariffs on imports from the Chinese market.
Nonetheless, the laser industry has continued to consolidate and create new vertical markets.
If on the one hand, China is the undisputed master of laser applications for the world of electronics, on the other, Europe is still a leader in research and in high-tech and performance machines.
The laser market is divided by final application (industrial mechanical processing, telecommunications and optical storage, eye and medical surgery, scientific and military research, sensor instruments, just to name a few) and by the active medium that is used for amplification of light by the stimulated emission process (crystalline solid-state lasers, atomic gas lasers, molecular gas lasers and semiconductor lasers, or laser diodes). It is a market that overall, in 2019, was worth about 15 billion dollars globally.
The business idea of ZENIT Smart Polycrystals fits into a market niche of strategic importance and is based on the production and sale of polycrystals for the solid-state laser machine (SSL) market.
The innovation of the crystal engineering process implemented by Zenit opens the possibility of targeting a wide range of applications by exploiting a multiplicative effect of the reference markets. The world of lasers is therefore only one of the possible markets for the application of this technology.
We are in fact in the context of transparent ceramic materials which is a much wider world than lasers and which also includes other machinery related to the world of measurement and research.
The start-up market is therefore particularly multifaceted and scalable: starting from laser crystals (about 200 million euros) and scintillators (about 300 million euros), the first targets easily reachable from Zenit, the ecosystem of the materials market transparent ceramics includes, among others, car headlights with laser technology and, again in the automotive world in the near future, that of lidar, i.e. sensors that use laser sources and that are used by self-driving cars to map the entire external context and which are therefore a fundamental component of these cars. The value of A & D, optoelectronics and automotive is approximately 1.68 million euros.The business idea of ZENIT Smart Polycrystals fits into a market niche of strategic importance and is based on the production and sale of polycrystals for the solid-state laser machine (SSL) market.
In a competitive scenario that currently contemplates only two other producers of polycrystals (the Japanese Konoshima and the American Coorstek) with production processes respectively more complex or less efficient than that prepared by Zenit and a limited number of single crystal producers (whose performance has been scientifically proven to be inferior) “Zenit’s technology can open up possibilities that do not exist today and create something new” noted Mario Pisapia, Managing Director of Optoprim.
Furthermore, the laser market has been extremely lively in recent years.
In the last 15 years there have been more than 60 M&A transactions, of which 24 only from 2016 to today, with an average investment amount of around 32 million euros. Restricting the field only to suppliers of sub-components, we can mention, among others, the acquisitions of Laser Quantum and Arges at a valuation of approximately 30 million and 65 million euros respectively by Novanta between 2017 and 2019 and ‘acquisition of Electro-optics Technology by Coherent for 25 million euros in April of the current year.
The acquisition in 2019 of Finsar (famous for being the manufacturer of the laser scanners used by Apple for its Face ID system) by the US II-VI Incorporated for the considerable sum of about 3 billion dollars.
Basically we are witnessing a general centralization strategy by the large companies operating in the downstream market (laser applications) which are tending to internalize the know-how of the players at the top of the value chain by acquiring suppliers of sub-components, electronic instruments, producers and distributors of ceramics and other active media.
In this perspective, Zenit’s disruptive technology will hardly go unnoticed and could soon be the temptation of various companies in the laser market, interested in acquiring an important success factor in the supply chain of the sector.
