VCSEL Market by Type (Single-mode, Multimode), Material (Gallium Arsenide, Indium Phosphide), Data Rate (Up to 10 Gbps, 10.1 to 25 Gbps, Above 25 Gbps), Wavelength (Red, Near-Infrared (NIR), Shortwave Infrared (SWIR)) & Region - Global Forecast to 2029
The VCSEL market is projected to grow from USD 1.3 billion in 2024 and is estimated to reach USD 1.9 billion by 2029; it is expected to grow at a CAGR of 8.1% from 2024 to 2029.
Scope of the Report
Years Considered for the Study
2020-2029
Base Year
2023
Forecast Period
2024-2029
Units Considered
Value (USD Billion)
Segments
By Type, Material, Data Rate, Wavelength, & Region
Regions covered
North America, Europe, APAC, RoW
The growth of VCSEL market is driven by expanding use of facial recognition and biometric security systems. VCSELs helps to achieve high-resolution depth-sensing supporting accurate facial recognition in biometric systems. High-security environments such as airports, passport offices, and government buildings are implementing facial recognition systems for biometric authentications, which heavily relies on VCSEL, thus driving the market growth. Adding to this, the rise in adoption of 3D sensing applications in smartphones, and increase in application of VCSELs in data communication are some of the promising growth factors fueling the VCSEL market growth.
"The shortwave infrared (SWIR) segment is projected to record the highest CAGR during the forecast period."
The market for shortwave infrared VCSEL is projected to grow at a high rate during the forecast period. Shortwave infrared (SWIR) VCSELs are increasingly gaining traction in various high-tech applications due to their superior performance and versatility. SWIR VCSELs operate in the spectral range, which is highly beneficial for applications requiring enhanced sensitivity and resolution. SWIR VCSELs are increasingly utilized in environmental monitoring, spectroscopy, and medical diagnostics due to their superior penetration and minimal interference from ambient light. Companies are emphasizing joint product development of SWIR VCSELs to stay competitive. In April 2024, VERTILAS GmbH (Germany) and TriEye Ltd. (Israel) partnered to develop a 1.3-μm VCSEL-powered SWIR sensing system. Through this partnership, the companies have integrated TriEye's cost-effective SWIR sensors, fabricated using silicon CMOS processing, with VERTILAS GmbH's VCSEL arrays, which operate at longer wavelengths enabled by indium phosphide (InP) material. The new solution is targeted to cater to the growing demand for SWIR VCSELS FROM the automotive, consumer, biometrics, and mobile robots markets.
"Emerging & other applications segment of the VCSEL market to witness highest growth during the forecast period."
The market for VCSELs for emerging & other applications is expected to grow at the high CAGR during the forecast period. This growth is driven by the increasing use of VCSELs in automotive applications. VCSELs are pivotal in automotive applications, particularly advanced driver assistance systems (ADAS) and autonomous vehicles. They enable high-resolution 3D sensing and LiDAR systems essential for enhancing vehicle safety and navigation. As automotive manufacturers continue to prioritize safety and automation, the demand for VCSEL-based solutions is expected to surge. In September 2023, TRUMPF (Germany) and KDPOF (Spain) introduced a groundbreaking 980 nm multi-gigabit interconnect system designed specifically for automotive applications. This system utilizes VCSEL technology to achieve high-speed for data-transmission of up to 10 Gbps. By leveraging 980 nm wavelength VCSELs, the solution aims to enhance robustness and longevity, crucial for automotive environments. The partnership between TRUMPF and KDPOF aims to establish a new standard in optical data communication within automotive systems, with the ultimate goal of launching an integrated transceiver for multi-gigabit optical communications. This initiative underscores the growing adoption of VCSELs in automotive applications, driven by the demand for high-speed, reliable data transmission solutions in vehicles.
"North America to hold a major market share of the VCSEL market during the forecast period" North America is projected to hold the largest share of the VCSEL market during the forecast period. North America is home to various leading VCSEL manufacturers, including Lumentum Operations LLC (US), Coherent Corp. (US), and Broadcom (US). The high demand for VCSELs is generated in this region owing to the increased adoption of smartphones, smart home devices, and autonomous vehicles. The presence of major consumer technology companies such as Apple Inc. (US), Google (US), and Microsoft (US) boosts the adoption of VCSEL in their devices. For instance, Apple Inc. (US) has been at the forefront of adopting VCSELs in their smartphones for advanced facial recognition and gesture sensing technologies, highlighting its widespread adoption in consumer electronics. This extensive integration of VCSEL technology by leading tech giants exemplifies North America's capacity for rapid technological adoption and innovation, reinforcing its dominant market position.
Extensive primary interviews were conducted with key industry experts in the VCSEL market to determine and verify the market size for various segments and subsegments gathered through secondary research. The break-up of primary participants for the report has been shown below:
The break-up of the profile of primary participants in the VCSEL market:
By Company Type: Tier 1 - 50%, Tier 2 - 30%, and Tier 3 - 20%
By Designation: C-level - 20%, Director Level - 30%, Others-50%
By Region: North America - 30%, Europe - 20%, Asia Pacific - 40%, ROW- 10%
The report profiles key players in the VCSEL market with their respective market ranking analysis. Prominent players profiled in this report are Coherent Corp. (US), Lumentum Operations LLC (US), ams-OSRAM AG (Austria), TRUMPF (Germany), Broadcom (US), MKS Instruments (US), Santec Holdings Corporation (Japan), Leonardo Electronics US, Inc. (US), VERTILAS GmbH (Germany), and Vertilite (China). Apart from this, Sony Semiconductor Solutions Corporation (Japan), Alight Technologies (Denmark), Teledyne FLIR LLC (US), Inneos LLC (US), IQE PLC (UK), Thorlabs, Inc. (US), TT Electronics (UK), Ushio America, Inc. (US), WIN Semiconductors (Taiwan), Frankfurt Laser Company (Germany), Inphenix, Inc. (US), Bandwidth10 (US), Zhejiang RaySea Technology Co., Ltd. (China), Wuhan Qianmu Laser Co., Ltd. (China), OCTLIGHT (Denmark), Sanan IC (China), and Brightlaser Ltd. (Hong Kong) are among a few emerging companies in the VCSEL market.
Research Coverage: This research report categorizes the VCSEL market on the basis of type, wavelength, material, application, data rate, vertical, and region. The report describes the major drivers, restraints, challenges, and opportunities pertaining to the VCSEL market and forecasts the same till 2029. Apart from these, the report also consists of leadership mapping and analysis of all the companies included in the VCSEL ecosystem.
Key Benefits of Buying the Report The report will help the market leaders/new entrants in this market with information on the closest approximations of the revenue numbers for the overall VCSEL market and the subsegments. This report will help stakeholders understand the competitive landscape and gain more insights to position their businesses better and to plan suitable go-to-market strategies. The report also helps stakeholders understand the pulse of the market and provides them with information on key market drivers, restraints, challenges, and opportunities.
The report provides insights on the following pointers:
Analysis of key drivers (rise in adoption of 3D sensing applications in smartphones, higher market investment for VCSEL manufacturing, increase in application of VCSELs in data communication, and expanding use of facial recognition and biometric security systems), retsraints (limited data transmission range, and limitations of semiconductor materials hampering performance), opportunities (use in LiDAR systems for automotive applications, growth in IoT market and data processing across commercial and government sectors, higher adoption of VCSELs in consumer electronic devices, and rise in adoption of VCSEL into medical imaging and biomedical sensing applications), and challenges (manufacturing defects in epitaxial layers, and managing intellectual property rights and patent issues) influencing the growth of the VCSEL market.
Product Development/Innovation: Detailed insights on upcoming technologies, research & development activities, and new product & service launches in the VCSEL market.
Market Development: Comprehensive information about lucrative markets - the report analysis the VCSEL market across various regions
Market Diversification: Exhaustive information about new products & services, untapped geographies, recent developments, and investments in the VCSEL market.
Competitive Assessment: In-depth assessment of market shares, growth strategies and product offerings of leading players like Coherent Corp. (US), Lumentum Operations LLC (US), ams-OSRAM AG (Austria), TRUMPF (Germany), Broadcom (US), among others in the VCSEL market.
TABLE OF CONTENTS
1 INTRODUCTION
1.1 STUDY OBJECTIVES
1.2 MARKET DEFINITION
1.2.1 MARKETS COVERED
1.2.2 INCLUSIONS AND EXCLUSIONS
1.2.3 REGIONAL SCOPE
1.2.4 YEARS CONSIDERED
1.3 UNITS CONSIDERED
1.3.1 CURRENCY UNIT
1.3.2 VOLUME UNIT
1.4 LIMITATIONS
1.5 STAKEHOLDERS
1.6 SUMMARY OF CHANGES
1.7 RECESSION IMPACT
1.8 GDP GROWTH PROJECTIONS FOR LARGE ECONOMIES UNTIL 2024
2 RESEARCH METHODOLOGY
2.1 RESEARCH DATA
2.1.1 SECONDARY DATA
2.1.1.1 List of key secondary sources
2.1.1.2 Key data from secondary sources
2.1.2 PRIMARY DATA
2.1.2.1 List of primary interview participants
2.1.2.2 Breakdown of primaries
2.1.2.3 Key data from primary sources
2.1.2.4 Key industry insights
2.1.3 SECONDARY AND PRIMARY RESEARCH
2.2 MARKET SIZE ESTIMATION
2.2.1 BOTTOM-UP APPROACH
2.2.1.1 Approach to arrive at market size using bottom-up analysis (demand side)
2.2.2 TOP-DOWN APPROACH
2.2.2.1 Approach to arrive at market size using top-down analysis (supply side)
2.3 DATA TRIANGULATION
2.4 RESEARCH ASSUMPTIONS
2.5 PARAMETERS CONSIDERED TO ANALYZE IMPACT OF RECESSION ON VCSEL MARKET
2.6 RISK ASSESSMENT
2.7 RESEARCH LIMITATIONS
3 EXECUTIVE SUMMARY
4 PREMIUM INSIGHTS
4.1 ATTRACTIVE OPPORTUNITIES FOR PLAYERS IN VCSEL MARKET
4.2 VCSEL MARKET, BY WAVELENGTH AND MATERIAL
4.3 VCSEL MARKET, BY TYPE
4.4 VCSEL MARKET, BY APPLICATION
4.5 VCSEL MARKET, BY DATA RATE
4.6 VCSEL MARKET, BY VERTICAL
4.7 VCSEL MARKET, BY REGION
4.8 VCSEL MARKET, BY KEY COUNTRY
5 MARKET OVERVIEW
5.1 INTRODUCTION
5.2 MARKET DYNAMICS
5.2.1 DRIVERS
5.2.1.1 Rise in adoption of 3D sensing applications in smartphones
5.2.1.2 Increase in application of VCSELs in data communication
5.2.1.3 Higher market investment for VCSEL manufacturing
5.2.1.4 Expanding use of facial recognition and biometric security systems
5.2.2 RESTRAINTS
5.2.2.1 Limited data transmission range
5.2.2.2 Limitations of semiconductor materials hampering performance
5.2.3 OPPORTUNITIES
5.2.3.1 Use in LiDAR systems for automotive applications
5.2.3.2 Growth in IoT market and data processing across commercial and government sectors
5.2.3.3 Higher adoption of VCSELs in consumer electronic devices
5.2.3.4 Rise in adoption of VCSEL into medical imaging and biomedical sensing applications
5.2.4 CHALLENGES
5.2.4.1 Manufacturing defects in epitaxial layers
5.2.4.2 Managing intellectual property rights and patent issues