Growing at light speed: after a false start, OE is fast becoming a key differentiator for many new products.

Ed.: For the complete article, visit circuitsassembly.com/cms/content/view/5292.

Great things are forecast for optoelectronics. The U.S.-based Optoelectronics Industry Development Association (OIDA) predicts a nearly $1 trillion business by 2017. Its Japanese counterpart--OITDA (Optoelectronic Industry and Technology Development Association)--expects the market to surpass $1 trillion.

Liquid crystal displays are the main driver, dwarfing all other optoelectronic components. New innovative technologies such as high brightness light emitting diodes (HB LED) for LCD backlights and organic LEDs (OLED) are also expected catalysts.

By market sector, consumer and entertainment have experienced impressive growth over the past few years. Although communications has suffered an extended downturn, it is now steadily recovering and returning to double-digit growth.

This article draws on information from the International Electronics Manufacturing Initiative (iNEMI) and OIDA roadmaps to look at market trends and technology status, showing key advancements anticipated during the next decade.

The global OE market demonstrated consistent growth between 2003 and 2005, with a compound annual growth rate (CAGR) of 21%. Revenues from OE components, which include devices and modules used in OE equipment, increased slightly more than 50% to $104 billion from $68 billion (Figure 1). Revenues for OE-enabled products (i.e., equipment that uses OE components) climbed 44% from 2003 ($180 billion) to 2005 ($260 billion). Although 2006 numbers were still being tallied at the time of writing, total revenues for components and enabled products in 2006 were expected to surpass $400 billion for the first time.

Display-based products, such as LCD TVs and camera phones/PDAs, have seen the strongest growth. As shown in Figure 2, the three largest growth areas from 2004 to 2005 were LCD TVs (79%), plasma display panel (PDP) televisions (45%), and camera phones/PDAs (41%). Fiber network equipment remained steady, with a growth rate of 16% from 2004 to 2005, an improvement over the 10% growth from 2003 to 2004. Only optical storage drives slipped in 2005, due primarily to the slow development of blue laser optical storage and to competition from solid-state flash memory sticks. Figure 3 (online) shows the distribution of OE-enabled products among the various applications.

The next decade is expected to be a strong one. The three major segments of this industry (consumer/entertainment, computer and communications) are expected to move quickly toward technology and market convergence. The main driver of this convergence is lifestyle. Consumers will demand easier, simpler and faster responses to questions, situations and environment; portability will increase as users want to be more mobile and still remain connected; and the devices used for connection will shrink thanks to novel miniaturization approaches. For example, PDAs are expected to become the universal communicator with new technologies like virtual keyboards, projection displays and hand-sized ergonomics.

[FIGURE 1 OMITTED]

[FIGURE 2 OMITTED]

A 'Broad-Based Technology'

Optoelectronics is a broad-based technology found in many diverse applications, ranging from medical and solar to communications and lighting, to name a few. Today, OE is increasingly used to differentiate products. A good example is the mobile phone, where small color displays provide improved features and functions in a wireless RF product. These applications are very high volume, and the OE components within are quickly becoming highly manufacturable with good yields. This is almost the antithesis of the communications market, where low-volume OE components are customized with detailed specifications and have a tendency to generate low yields.

Various markets and applications have differences in requirements. Telecom, military and aerospace require higher quality and performance, as well as more long-term reliability than many consumer and sensor applications. These differences are manifested in the achievable time to market and in the cost of producing acceptable products. Computer and consumer applications require high volumes and low costs compared to military and (current) sensor applications, necessitating operational excellence, higher capitalization levels, larger and less specialized workforces, and advanced fabrication and manufacturing methods. Sensors, optical disk memory, LED/lighting and plastic optical fiber (POF) require wavelengths of light unobtainable with the material systems used for data transmission, necessitating entire infrastructures devoted to each application area.

Differences in materials and processing equipment further complicate matters, as many OE devices are fabricated on a variety of substrates, such as indium phosphide, gallium arsenide, gallium nitride and germanium. Presently, there is much interest in silicon photonics, where OE devices are being fabricated in silicon fabs using silicon wafer materials. The range of materials, therefore, creates issues if optoelectronics is expected to follow the silicon integrated platform trends. In optical communication systems, there are examples of low levels of integration (up to 200 devices) in indium phosphide and silicon photonics.

Michael Lebby is president and CEO of the Optoelectronics Industry Development Association (oida.org); [e-mail]. Rick Clayton is a consultant and chair of the optoelectronics chapter for the 2007 iNEMI Roadmap; [e-mail].