Strategically Blogging

Fiber Laser Market Continues to Evolve

Allen Nogee 09/05/2014

I’ve always been a person who has been very interested in the latest technology, and sometimes it’s hard for me to believe how much technology has changed over the years.

Everything from flat screen TVs, DVRs, audio equipment, cables and wiring, computers, tablets, smartphones, and so many others have evolved over the years, and in most ways, the new technology is quicker, smaller, cheaper, and more energy efficient. Today we take all these things for granted, but it wasn’t that long ago that a flat screen TV or a smartphone was a novelty. Today we just can’t even imagine living without these things.

Martin Shih

A Win-Win Situation: Cree Announces Investment in Lextar through Private Placement

Martin Shih 09/05/2014

Cree recently announced plans to invest US $83M in Lextar Electronics, one of Taiwan’s major LED manufacturers, in order to acquire 13% of Lextar shares and to enter a supply/royalty agreement. Cree will become Lextar’s second largest shareholder (AUO, Lextar’s parent company, is the biggest shareholder) and obtain one member of BOD. This deal is expected to be done at the end of 2014 and the lock-up period is 3 years, which means Lextar will reserve its capacity for Cree for 3 years.

Lasers in Medical Imaging: The Forecast Looks Very Bright

Allen Nogee 07/11/2014

Almost all medical imaging to date has used one of three technologies: X-rays, magnetism (MRI), or ultrasound. X-rays alone have been used for almost 120 years now, and although today’s imaging technology has improved vastly over the many years, the fact remains that x-rays, ultrasound, and magnetism are all technologies that, due to many factors, produce coarse images, at least by today’s standards. But what if a very coherent light source was used instead, maybe a laser?

Actually, Optical Coherence Tomography (OCT), which produces images based on the reflections of coherent light, is not a new technology. OCT has been used since the early 1990s, especially in the area of ophthalmology, where the images produced by OCT are 100 times finer than standard images produced by ultrasound. In just the last five years, OCT has become one of the most important retinal imaging techniques used today.

The Impact of the Epistar Acquisition on the LED Industry

Martin Shih 07/09/2014

Epistar (2448.TW) announced a plan to fully acquire Forepi (3061.TW), the second-largest chipmaker in Taiwan, through a share swap (1:3.448), implying 18% share dilution to Epistar. The effective date will be the end of 2014, and Forepi will be delisted from the TAIEX.

After the merger, Epistar will become the world’s largest LED chip maker in terms of capacity with a global market share of 15%, which will better position the company to lead in future technology development.

EPA's New Emissions Cutting Plan Could Have an Effect on LED Lighting

Philip Smallwood 06/30/2014

On June 2nd, the Environmental Protection Agency (EPA) proposed a rule designed to cut carbon dioxide emissions from existing coal plants by as much as 30 percent by 2030, compared with 2005 levels. The EPA will finalize the proposal in mid-2015 and then give states a year to design their own plans to meet targets. The organization will let states meet emission targets for power plants in several ways, including through plant upgrades, by switching from coal to natural gas, by improving energy efficiency, or by promoting renewable energy outside the plant site. This approach will give states greater flexibility in designing plans to meet the EPA’s targets.

The Early Peak Effect in the photonics market

By Tom Hausken
Our new market report highlights something I call the “early peak” effect that appears a lot in capital equipment sales, including many laser products. It’s what happens when you sell some lasers into a new application, and then sales drop off when the customers have installed all the lasers they need. It’s so typical of the micro materials processing market that I have come to include it in some forecasts.

Here are the phases:
· Rollout of lasers for a new application
· The early peak in sales
· Saturation of the installed base
· Early wearout and upgrades
· A second “baby boomlet” as replacements for wearouts peak


If you don’t account for the early peak effect, you can overestimate laser sales by assuming that sales continue at peak levels, year after year. The news of new applications have surprisingly wide reach and long tails, feeding the perception that sales are higher than they really are, especially if the application is really cool, like stent cutting.

What keeps the market going is that there are new applications launched on a regular basis that smoothes out the overall growth in the market. But, sales any particular company can be very choppy. And, the mix of products grows more diverse with every new application in the market.


A laser salesperson will recognize the early peak effect, but it gets lost when you look at overall market numbers. It’s not hard to explain to the old-timers in the business, but it doesn’t have a ready label, as far as I know. I couldn’t come up with a better name for it, so for now it’s the “early peak effect.” If you want to call it the “Hausken effect,” that’s fine with me, too.

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