David A. Belforte
The recovery from the 2008/2009 global recession was, according to experts, going to take at least three years to reach pre-recession levels. In the United States, manufacturing companies, reacting to orders from pent-up demand and delayed 2009 buying plans, found their production taxed to meet a rapidly growing order book in 2010 followed by a banner year in 2011 and likely through 2012.
Riding on the coat-tails of a more rapid U.S. recovery (see Figure 1) were the suppliers of industrial lasers used to power systems that were being heavily utilized by six key manufacturing industries: transportation, energy, medical devices, agricultural equipment, aerospace and communications. Another sector, fabricated metal products, while slower to recover, is a market sector of importance because of the high value laser products required to cut sheet metal.
BY THE NUMBERS
Over the past ten years the North American share (dominated by the U.S.) of annual global laser installations has decreased as a result of phenomenal growth in the Asian market, dominated by China. Today, North America represents about 16 percent of the annual industrial laser installations (Figure 2). The U.S. share of industrial laser applications compared to total global shares is shown in Figure 3. From this figure, it is obvious that metal processing – cutting, welding and drilling – are market sectors that use high-cost laser systems, and thus generate high revenues. Semiconductor/microprocessing and marking, while lower in revenues, are major and important markets in terms of units sold. A review of the six key industries that drove the rapid recovery of manufacturing and laser sales in the U.S. follows.
The Big Three auto industry, led by the U.S. government’s stimulus recovery plan at two of them, quickly became a significant market for high power CO2 and fiber lasers for welding and brazing applications. Combined with the increased requirements for laser systems by the nine other international automakers with expanding operations in the U.S. provided laser suppliers with an unexpected but welcome active market for on-line processing equipment powered by these lasers. The manufacture of passenger aircraft (5,000 narrow-body planes to be built in the next 20 years) by the two major suppliers has been expanded in the U.S. with the resultant increase in the use of lasers for welding, marking and laser additive manufacturing.
Energy, both conventional and alternative, has been on a steep growth curve supported by federal and state plans to boost the U.S. independence from imported oil. This has spawned actions in previously shelved projects, many of which are now exploring the use of laser processing, such as welding, cutting and drilling, to enhance cost reductions in ground-based turbine engine manufacture, cross-country oil and gas transmission lines (20,000 miles planned) and oil drilling ($330 billion spent by 6,500 companies). High- and low-power lasers have found a receptive market in the wind power (a $60 billion industry) and solar power (showing over 100 percent growth last year) industries, where they are welding, cutting, marking and surface treating components used in these growth industries.
The U.S. medical device industry was one of the few that experienced only a slowing of growth in the recession and therefore was among the first to recover, and, as a consequence, acted to boost the overall manufacturing sectors’ return to health. A key manufacturing tool in many medical device applications is the industrial laser used to cut stents (an $11 billion industry), weld and drill catheters (an $11 billion industry) and weld implantable devices (a $100 billion industry). Large numbers of solid-state and fiber lasers are utilized in these applications throughout this vital U.S. manufacturing sector.
This year in the U.S., more than $27 billion of agricultural equipment will be built for domestic and export markets. Industrial lasers have long been a useful tool in this industry for cutting sheet metal, an application that has led to more widespread use in cutting and welding heavy plate and in the processing of worn equipment, such as laser additive manufacturing new teeth in harvester equipment. The agri market has been and is expected to remain a strong contributor to manufacturing revenues for the coming years.
Aerospace, long a major industry in the U.S., has been enjoying a remarkable resurgence as the world’s airlines are refitting their fleets for the new travel trends. Thousands of turbine engines are on order, and the manufacturing of each one requires a heavy use of lasers drilling, cutting, welding and additive manufacturing applications. This year, more than $180 billion of jet engines will be built by an industry made up of more than 1,100 companies. A new-to-lasers procedure, the cutting of composite materials for aircraft fuselage applications, has opened the doors for expanded use of multi-axis cutting systems powered by high-power fiber lasers.
HIGH DEMAND ELECTRONICS
Perhaps the greatest shot-in-the arm for the resurgence of industrial lasers after the recession has been the seemingly insatiable demand for hand-held communication devices, smart phones and tablets. Mostly driven by industry technology leader Apple®, whose significant need to expedite production of its iPhone® consumed a vast amount of industrial lasers and systems in the 2009/2010 period. That, plus the continuing demand by that company and its competitors for increasing amounts of laser processing capability in excimer laser silicon annealing, scribing, cutting and marking related to displays and circuit boards for phones, occupied several leading laser suppliers in the U.S. and their OEM customers in Asia. These same laser companies experienced, and continue to do experience, the fresh demands of the tablet maker industry for similar products to assist in the manufacture to meet the needs for a fast-growing market of devices.
And finally, slow but steady growth in the supply of laser-based sheet metal cutting systems, to meet the increasing need of the U.S. companies supplying fabricated metal products, has boosted the lethargic post-recession sales of these high-selling-price systems. The introduction of high-power fiber lasers into these systems was certainly a contributor to the increased selling activity of U.S. laser cutters.
BRIGHT FUTURE AHEAD
In the U.S., industrial lasers serve diverse areas that have not been sensitive to recent economic pressures, such as in: aerospace, where aircraft and engines are in the midst of a massive expansion; energy (conventional and alternative), which is expanding to meet the need to offset reliance on foreign oil; a resurgent auto industry; medical devices: after a 40 percent growth in 2011 looking forward to a 25 percent increase in 2012; smart phone usage and tablets showing unlimited growth; fabricated metal products – leading the recovery from tight credit and recession; and agricultural equipment with growth led by exports.
For all these reasons, the U.S. share of the global market for industrial laser systems, which had been decreasing for several years, stabilized in 2012, and the industrial laser market now remains vibrant and growing as other world markets recover more slowly from the great recession. The major market drivers described here have strong near-term growth prospects, ensuring the viability of the U.S. as a target market for exporters.
David Belforte is the Founder and Editor-in-Chief of Industrial Laser Solutions magazine.