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VCSEL Market Research Report Information By Type (Single-Mode and Multi-Mode), By Application (Data Communication, Industrial Heating, Infrared Illumination, and Sensing), And By Region (North America, Europe, Asia-Pacific, And Rest Of The World) โ€“Industry Size, Share and Trends Till 2032

ID: MRFR/SEM/7200-HCR | 111 Pages | Author: Aarti Dhapte| May 2024

Global VCSEL Market Overview:

VCSEL Market Size was valued at USD 1.52 Billion in 2023. The VCSEL industry is projected to grow from USD 1.7799 Billion in 2024 to USD 5.38 Billion by 2032, exhibiting a compound annual growth rate (CAGR) of 14.83% during the forecast period (2024 - 2032). Increased adoption of VCSEL in automotive electronics applications and rising utilization of VCSEL in data communication are the key market drivers enhancing the growth of market.

Global VCSEL Market Overview

Source: The Secondary Research, Primary Research, MRFR Database, and Analyst Review

VCSEL Market Trends

  • Growing adoption of VCSEL in various sections is driving the market growth

Market CAGR for VCSEL is being driven by the rising adoption of VCSEL in different sections. The VCSELs are being largely adopted as a 3D sensing application in smartphones as there is demand for 3D sensing technology. The growing adoption of autonomous vehicles and automotive electronic applications is directly boosting the market of VCSEL; it also has surging applications in the biomedical sector. The rising IoT market and data processing across commercial and government sections is also anticipated to boost the market growth.

The growing adoption of 3D sensing applications in smartphones is one of the main factors boosting the growth of the VCSEL (vertical cavity surface emitting laser) market. VCSELs play a crucial role in 3D sensing applications in smartphones as the 3D camera sensors, flood illuminator, proximity sensor, and dot projector are all based on VCSEL laser components. The cameras which can render and scan objects in 3D have become a standard feature in high-end smartphones. The cameras, when coupled with proper software, help the user to sense light levels, texture, and movements more accurately than previously possible. VCSEL provides various advantages like optical efficiency, relatively low cost, low power consumption, high modulating rates, and wavelength stability. There are about 5 billion smartphone users worldwide as of 2023, which is about 85% of the population using smartphones. Thus, the market is expected to grow for VCSEL.

The increasing demand for autonomous vehicles with installed VCSEL is anticipated to boost market growth. VCSEL is being tested and utilized in driverless or autonomous vehicles. In relation to power density, pitch, and conversion efficiency, the market for smart vehicles believes VCSEL arrays to be the best available. Additionally, distinguishable in flash and scan applications, VCSELs are least prone to single-emitter failures. The VCSELs are utilized for label-free and integrated sensing of numerous biomolecules in the biomedical field. These sensors are also used in lab-on-a-chip settings for examining fluorescent compounds and for analyzing real-time biomolecules.

The increasing trend in computer and television displays with the larger size, higher resolution, and thinner profiles and the rise in cloud computing and 5G wireless communications due to the increase in the number of data centers further impacts the market. Further, digitization and urbanization, the rise in the application of VCSEL in data communication, and the spread of end-use industries positively impacted the VCSEL market. The technological advancements and adoption of VCSEL in consumer devices by OEMs provide profitable opportunities to the market players. Thus, driving the VCSEL market revenue.

VCSEL Market Segment Insights:

VCSEL Type Insights

The global VCSEL market segmentation, based on type, includes Single-Mode and Multi-Mode. The multi-mode segment dominates the market, accounting for the largest market revenue because of its high-speed data transfer capabilities, cost-effectiveness, and lower power consumption. It is largely utilized in aerospace, automotive, and medical systems. These VCSELs have huge power densities. Thus, their application is becoming more versatile in LiDAR, lighting, time-of-flight (TOF), industrial, and other high-power applications. These multi-mode VCSELs are small in size, which makes them perfect for application in highly integrated sensors and are preferable for mobile consumer applications.

Figure 1: Global VCSEL Market, by Type, 2022 & 2032 (USD Billion)

Global VCSEL Market, by Type, 2022 & 2032

Source: The Secondary Research, Primary Research, MRFR Database, and Analyst Review

VCSEL Application Insights

The global VCSEL market segmentation, based on application, includes Data Communication, Industrial Heating, Infrared Illumination, and Sensing. The sensing segment dominates the market of VCSEL with maximum revenue share in 2021. This is because of the growth in demand for object detection and face recognition and also developments in logistics, industry 4.0 technologies, and home & building automation are responsible for the rapid growth rate of the segment. In surveillance, automotive, smartphones, consumer electronics, and manufacturing applications, VCSEL-based sensors enhance precision and speed.

VCSEL Regional Insights

By region, the study offers market insights into the North America, Europe, Asia-Pacific, and the Rest of the World. The North American VCSEL market area dominates the market owing to innovations in advanced technologies and the rise in data communication applications. An increase in enterprise mobility and extensive wireless connectivity leads to the growth of the VCSEL market in the North American region. The US is the highest contributor in this region to the growth of the VCSEL market.

Further, the major countries studied in the market report are the US, Canada, German, France, the UK, Italy, Spain, Japan, India, China, Australia, South Korea, and Brazil.



Source: The Secondary Research, Primary Research, MRFR Database, and Analyst Review

The Asia-Pacific VCSEL Market accounts for the second-largest market revenue due to the rising adoption of VCSEL solutions because rising penetration of mobility and cloud deployment by mid and small-sized companies. Moreover, China’s VCSEL market held the largest market share, and the Indian VCSEL market was the fastest-growing market in the Asia-Pacific region.

Europe's VCSEL market is expected to grow at the fastest CAGR from 2024 to 2032. This is due to the rising adoption of devices for energy and power applications and the need for IT & telecommunication equipment that utilizes VCSEL. Further, the German VCSEL market held the largest market share, and the UK VCSEL market was the fastest-growing market in the European region.

VCSEL Key Market Players & Competitive Insights

Leading market players are investing heavily in research and development in order to expand their product lines, which will help the VCSEL market grow even more. Market players are also undertaking various strategic activities to expand their global footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, the VCSEL industry must offer cost-effective items.

Manufacturing locally to minimize operational costs is one of the key business tactics used by manufacturers in the global VCSEL industry to benefit clients and increase the market sector. In recent years, the VCSEL industry has offered some of the most significant advantages to technology. Major players in the VCSEL market, including Semtech Corporation, TRUMPF Photonic Components, IQE plc, ams-OSRAM, II-IV Incorporated, Lumentum Operations LLC, Hamamatsu Photonics K.K, Vixar Inc, WIN Semiconductors, Frankfurt Laser Company, and others, are attempting to increase market demand by investing in research and development operations.

Semtech Corporation is a leading supplier worldwide of high-performance analog and mixed-signal semiconductors and modern algorithms. The company is based in Camarillo, Ventura County, Southern California, and was founded in 1960. The company is a high-performance semiconductor, cloud connectivity, and IoT systems service supplier dedicated to offering high-quality technology solutions that offer a smarter, more sustainable, and more connected planet. In September 2022, the direct availability of the GN1848, a new addition to the FiberEdge platform of PAM4 chipsets, was announced by Semtech. It is a 56GBd quad low-cost, low noise, low power, and industry-leading linear VCSEL driver with a programmable bias and modulation currents, allowing interoperability with multiple VCSELs. The FiberEdge GN1848 is designed for 400GBASE-SR4/VR4 and 800GBASE-SR8/VR8 PAM4 multi-mode optical transceivers and active optical cables (AOC).

TRUMPF Photonic Components, headquartered in Ulm, Germany, founded in 2019, is a global technology leader, providing VCSEL and photodiode solutions for consumer electronics, automotive, industrial sensing, datacom, and industrial heating markets. In April 2022, advanced VCSEL solutions were introduced by TRUMPF Photonic Components in order to grow its portfolio for 3D sensing in industrial and consumer applications. The new generation 940 nm VCSEL arrays permit breakthrough advancements in different functionalities coupled with high-reliability performance, such as long product lifetime at a broad temperature range. Thus, the new VCSEL generation provides better results in advanced optical applications like proximity sensing, laser autofocus, and under OLED display sensing.

Key Companies in the VCSEL market include

  • Semtech Corporation

  • TRUMPF Photonic Components

  • IQE plc

  • Ams-OSRAM

  • II-IV Incorporated

  • Lumentum Operations LLC

  • Hamamatsu Photonics K.K

  • Vixar Inc

  • WIN Semiconductors

  • Frankfurt Laser Company

VCSEL Industry Developments

March 2022: Coherent Inc. was acquired by II-VI Incorporated to become a global leader in materials, networking, and lasers. This combined business will be distributed more across the value chain.

May 2022: The world’s first commercially available 200mm (8”) VCSEL epi wafer was announced by IQE plc. This will enable a step-change in unit economics for compound semiconductors, boosting the market for IQE. The rise in wafer size will make new foundry partnerships, including Silicon-based foundries. It also enables the integration of compound semiconductors on silicon, allowing the adoption of devices and applications across a broader range.

May 2022: A high-performance infrared laser flood illuminator was launched by ams OSRAM for the latest automotive indirect Time-of-Flight demonstrator from Melexis company, a global supplier of microelectronic semiconductor solutions.

VCSEL Market Segmentation:

VCSEL Type Outlook

  • Single-Mode

  • Multi-Mode

VCSEL Application Outlook

  • Data Communication

  • Industrial Heating

  • Infrared Illumination

  • Sensing

VCSEL Regional Outlook

  • North America

    • US

    • Canada

  • Europe

    • Germany

    • France

    • UK

    • Italy

    • Spain

    • Rest of Europe

  • Asia-Pacific

    • China

    • Japan

    • India

    • Australia

    • South Korea

    • Australia

    • Rest of Asia-Pacific

  • Rest of the World

    • Middle East

    • Africa

    • Latin America

Report Attribute/Metric Details
Market Size 2023 USD 1.52 Billion
Market Size 2024 USD 1.7799 Billion
Market Size 2032 USD 5.38 Billion
Compound Annual Growth Rate (CAGR) 14.83% (2024-2032)
Base Year 2023
Market Forecast Period 2024-2032
Historical Data 2018- 2022
Market Forecast Units Value (USD Billion)
Report Coverage Revenue Forecast, The Market Competitive Landscape, Growth Factors, and Trends
Segments Covered Type, Application, and Region
Geographies Covered North America, Europe, Asia Pacific, and the Rest of the World
Countries Covered The US, Canada, German, France, UK, Italy, Spain, Japan, India, China, Australia, South Korea, and Brazil
Key Companies Profiled Semtech Corporation, TRUMPF Photonic Components, IQE plc, ams-OSRAM, II-IV Incorporated, Lumentum Operations LLC, Hamamatsu Photonics K.K, Vixar Inc, WIN Semiconductors, Frankfurt Laser Company ย 
Key Market Opportunities Rising utilization of VCSEL in data communication.
Key Market Dynamics Increased adoption of VCSEL in automotive electronic applications.

Frequently Asked Questions (FAQ) :

The global VCSEL market size was valued at USD 1.52 Billion in 2023.

The global market is foreseen to grow at a CAGR of 14.83% during the forecast period, 2024-2032.

North America had the largest share of the global market

The key players in the market are Semtech Corporation, TRUMPF Photonic Components, IQE plc, ams-OSRAM, II-IV Incorporated, Lumentum Operations LLC, Hamamatsu Photonics K.K, Vixar Inc, WIN Semiconductors, Frankfurt Laser Company.

The multi-mode category dominated the market in 2022.

The Sensing had the largest share in the global market.

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