2024 SPIE Global Industry Report highlights strength of the photonics industry

Consistent growth, solid financial performance, and being a source of good jobs have defined the global photonics core-components business over the past 10 years—a trend expected to continue, according to the newly released SPIE Optics & Photonics Global Industry Report.

Global annual revenues from the production of optics and photonics core components reached $368 billion in 2022, up 26 percent from 2020 and well above global gross domestic product (GDP) growth of 18 percent for the same period. Since 2012, the photonics components industry has grown at a rate more than twice that of the global GDP.

Beyond core components, SPIE projects global annual revenues for photonics-enabled products to exceed $2.39 trillion in 2023. “The report largely confirms what most of us in the optics and photonics industry already know, that light-based technologies underpin a significant portion of the global economy, and their impact continues to grow,” notes Andrew Brown, SPIE Senior Director of Global Business Development. “Anecdotally, we can point to some mainstream technology or application and explain how photonics enables or powers the components that make it work. This report puts all of those individual cases together into tangible numbers that policymakers, industry executives, and investors can use to understand the impact of our industry.”

The report draws on the Society’s industry expertise, world-class database, and global footprint, which uniquely position SPIE for its analysis and understanding. For more than a decade, the report has tracked metrics such as the number of companies, distribution of global revenues, jobs based on company headquarters, and more, to paint a solid picture of the photonics industry whose growth outpaces global GDP and other benchmarks.

As defined in this 10th edition of the Industry Report, core photonics components underpin all light-enabled products and services like smartphones, computers, laser-based instruments for industrial and medical applications, cloud computing, streaming content services, and e-commerce. Estimates of the total monetary value of all light-enabled products and related services exceed 15 percent (~ $16 trillion) of worldwide economic output.

Core photonics components range from raw materials to image sensors, and light-emitting diodes (LEDs) to lasers. By focusing on the core components and the companies that produce them, SPIE has leveraged its comprehensive understanding of the photonics business to characterize the global photonics industry. “With ten years of accumulated data, this report delivers a unique perspective on the thriving global ecosystem of photonics components manufacturing, the companies involved, where they are headquartered, their revenues, and the number of jobs created globally by optics and photonics components production,” the report says.

Other key findings of the report include:

• Production of optics and photonics core components is a global enterprise spanning more than 50 countries.
• Core components production employs more than 1.25 million people worldwide.
• Over the past 10 years, companies headquartered in China, Korea, and Taiwan have increased their global share of the photonics components business.
• In 2022, photonics components manufacturers headquartered in Japan generated the most revenue and employed the most people.
• Manufacturing of photonics-enabled products generates more than five million jobs worldwide.

SPIE tracked and evaluated 4,706 companies that produced core photonics components in 2022, 84 percent of which are small-to-medium enterprises (SMEs). “Although most of the companies are SMEs, the larger entities generate the majority of the revenues. In fact, only about five percent of all companies, including such household names as Samsung, Corning, Nikon, and Carl Zeiss, generated more than 85 percent of total revenues in 2022,” the report notes. To examine the global distribution of photonics revenue, SPIE follows a methodology that captures the company’s global revenues in the local currency of the country where it is headquartered and then converts them to USD for global comparison purposes.

For 2022, the report reveals that, over the past decade, companies headquartered in Japan have had total revenues higher than other world regions. Those revenues had also been relatively flat until 2022, when they jumped 15 percent over 2020 revenues, with growth also seen in revenues for companies based in Korea and Taiwan that year.

Conversely, in China, growth in revenues in 2022 moderated somewhat. The report notes that the core photonics components industry “has grown to the point that combined demand for lasers and all other photonics components in 2022 underwrote more than 1.2 million jobs worldwide…. As employment has grown, so has the number of countries hosting components manufacturers, making it a truly global industry.”

In all, the report notes, the global photonics industry has experienced a decade of consistent growth despite headwinds like chip shortages, regional conflicts, rising costs, and a global pandemic. SPIE forecasts continued but moderate growth in 2024, and more of this data, including challenges ahead, will be explored at SPIE conferences and exhibitions throughout the year. 

 
William G. Schulz is Managing Editor of Photonics Focus.