2021/07/28 YOLE: VCSEL industry, towards a complete metamorphosis?

“VCSEL technology is continuously evolving. It has already occurred in the past with the transition from 850nm-based VCSELs for datacom applications to 940nm-based VCSEL arrays for 3D sensing applications.” asserts Pierrick Boulay, Technology & Market Analyst, Solid-State Lighting at Yole Développement (Yole). He adds: “A few years ago, smartphones embedded a notch in the front display to implement the selfie camera and the face recognition module. These elements take up space and are unsightly. The goal is to hide these elements under the display. To enable this, a transition in the wavelength used for 3D sensing would be necessary for the light to penetrate the display.”

In this context, Yole investigates disruptive technologies and related markets in depth, to point out the latest innovations and underline the business opportunities.
Released today, the VCSEL - Technology and Market Trends 2021 report provides market data on different VCSEL applications, delivers an in-depth understanding of the VCSEL business value chain, players and trends and gives insights into manufacturing and associated challenges. What are the economic and technologic challenges of the VCSEL industry? Who are the top VCSEL manufacturers, what are their market share and the strategy behind? What is the VCSEL technology evolution?
Discover Yole’s solid-state lighting team’s vision.

As analyzed by Yole’s team in the new VCSEL - Technology and Market Trends 2021 report, the global VCSEL market is expected to increase from US$1.2 billion in 2021 to US$2.4 billion in 2026 at a 13.6% CAGR during the 2021-2026 period. This market is dominated by the mobile and consumer market, which will grow from US$797 million in 2021 to US$1.7 billion in 2026 at a 16.4% CAGR.
According to Pierrick Boulay: "In this market, revenues linked to smartphones are expected to remain stable in 2021 and 2022. This is explained by the decreasing adoption of 3D sensing modules by Android players. In 2021, only Apple is implementing VCSELs and developing AR applications. This will create a relatively flat market for two years. Growth could be back after that with Android players".
Data communications is the second biggest market, expected to generate revenue of US$430 million in 2021 and expected to reach US$566 million in 2026 at a CAGR of 5.6%. The automotive market is quite small in 2021 with revenue of US$1.1 million but is expected to reach US$57 million in 2026 at a CAGR of 122% with applications in LiDAR and driver monitoring. Industrial applications are expected to generate revenue of US$16 million in 2021 that could reach US$21 million in 2026 at a CAGR of 6.3%.
Industrial revenue could take-off at mid-term with the emergence of applications using 3D LiDARs. These applications will be related to smart infrastructure and logistics.

It appears that OLED displays are transparent to SWIR light, around 1300 to 1400 nm. The shift from 940nm to such SWIR wavelengths will deeply impact the components and the supply chain. For 940nm, VCSELs are made from 6” GaAs wafers. SWIR VCSELs should be based on InP , which is much more difficult to process, and manufacturing is currently done on 2” and/or 3”.
As a Business Unit Manager, Solid-State Lighting & Display at Yole, Pars Mukish asserts: “The impact is not limited to the light source but also to the receiver, where silicon-based SPADs are used in the NIR region. Silicon can no longer be used in the SWIR region. SPADs will have to have to be based on InGaAs material or using quantum dots. In both cases, the technology is still emerging, manufacturing yields are low, and availability of components is limited. This will lead to higher component costs for both the emitter and the receiver”.
Only Apple, whose smartphones have ASPs higher than $1,000, can afford such a technology change.
Smartphones are not the only application where technology is evolving. Automotive applications, and LiDAR in particular, will benefit from recent developments. Multi-junction technology represents the next leap forward for the VCSEL industry. The multi-junction VCSEL offers many significant benefits to users. Multi-junction VCSELs, in a back-side emitting configuration, would have several advantages over their conventional sibling. Eliminating wire bonds would improve the VCSEL performance and allow the use of micro lenses to have more compact packages.