3D Sensing in Smartphones Driving VCSEL Market, According to Yole

Market research firm, Yole Development, forecasts strong growth in the market for vertical cavity surface emitting lasers (VCSELs) between 2017 and 2023 with a 31% compound annual growth rate (CAGR). Yole pointed out one of the key industry shapers, Apple, the leading smartphone maker, that revealed the iPhone X smartphone in 2017 with a unique 3D sensing function using VCSEL technology. The phone integrates three VCSELs.

Yole Development predicts that in 2023, the VCSEL market will sell more than 3.3 billion units up from just 652 million units in 2017. The market research firm says that this demand explosion has begun to change the of firms along VCSELs supply chain including OEMs , VCSEL integrators, device manufacturers, epi houses, foundries, as well as equipment and material suppliers.

3D Sensing Functions of Smartphones to Drive the VCSEL Market Over Next Five Years

In addition to their use in smartphones Yole anticipates VCSELs will also be adopted for applications including LiDAR for autonomous vehicles, as well as gas sensing for the Internet of Things and the Industrial Internet of Things. Yole expects 3D sensing functions of smartphones will drive the VCSEL market for the next five years.

Yole-- VCSEL Industry forecast illustration broken down by application

Data Communications was the first industrial application that integrated VCSEL technology. The market for VCSELs boomed in the 2000s especially for short-distance data communications because of their low power consumption and competitive price compared to EELs.

It was only in 2014, nearly 20 years since the first use of the technology in datacom that VCSEL technology was first used in high-volume consumer smartphones. Yole expects other leading smartphone players like Samsung, Huawei, and Vivo to integrate VCSELs into their flagship models by 2019.

Automotive Light Detection and Ranging (LiDAR) and gas sensors are also anticipated to be significant growth drivers in the future. Yole, therefore, predicts strong investment and proliferation in the VCSEL industry with the entry of several new players, mostly from the LED industry, whose technology is similar.