Optical Materials Market - Forecast(2023 - 2028)

Optical Materials Market Overview

Optical Materials Market size is forecast to reach US$4.6 billion by 2026 after growing at a CAGR of 4.7% during 2021-2026. Numerous applications of optical materials fueled by their transmission, absorption, reflection, refraction, and other optical properties, have sparked a massive increase in the optical materials market demand. Optical materials are widely used in various applications across the consumer as well as industrial sector. Furthermore, one of the major factors driving the growth of the optical materials market is the increasing use of optical semiconductors in consumer electronics. Rising production of new aircraft for commercial and military use in countries such as the USA, China, Canada, and Mexico is further estimated to boost the optical materials market growth. 

Impact of Covid-19

Quarantines and "stay in place" orders, the timing and length of containment and eradication solutions, labor shortages, absenteeism by infected workers, travel restrictions, or other disruptions to customers had adversely impacted the sales and operating results and resulted in production delays in the optical materials market. After a grim 2019, which witnessed an almost 5% drop in global auto manufacturing, the global auto industry faced a new, unprecedented problem in 2020 as a result of the COVID epidemic. The year 2020 was marked by the shutdown of a huge portion of the car industry over several weeks. As per the media release published by the International Organization of Motor Vehicle Manufacturers (OICA), the COVID-19 crisis had a significant impact on global auto production in 2020, with a 16% decline in global vehicle manufacturing. Furthermore, as per the European Parliament, the demand for aerospace manufacturing in Europe fell by 43% in 2020, owing mostly to Airbus order deferrals. The declining growth of the end-use industries such as automotive, aerospace, and many others, directly affected the optical materials market growth.

Optical Materials Market Report Coverage

The report “Optical Materials Market– Forecast (2021-2026)”, by IndustryARC, covers an in-depth analysis of the following segments of the Optical Materials Industry.

By Type: Inorganic Coating Materials, Glass (lens) Coating Materials, Inorganic Fluorides Coating materials, Refractive index control, Fluorine compounds (Magnesium fluoride, Ytterbium Fluoride, Tin Fluoride, Aluminum Fluoride, Calcium Fluoride, Strontium Fluoride, and Barium Fluoride), and Others.
By Function: Transmission, Storing Data, Display, Absorption, Reflection (Reflective and Refractive), and Others.
By End Use Industry: Consumer Electronics, Medical Devices, Optoelectronics, Automotive, Astronomy Equipment, Aerospace, Defense, Nuclear Equipment, and Others.
By Geography: North America (USA, Canada, and Mexico), Europe (UK, Germany, France, Italy, Netherlands, Spain, Russia, Belgium, and Rest of Europe), Asia Pacific (China, Japan, India, South Korea, Australia and New Zealand, Indonesia, Taiwan, Malaysia, and Rest of APAC), South America (Brazil, Argentina, Colombia, Chile, and Rest of South America), and RoW (Middle East and Africa).

Key Takeaways

• North America region dominated the optical material market due to the rising usage of optical materials in the Information and Communication sector for the production of components such as photo-detecting receivers, regenerators, optical amplifiers, and other products.
• Rising investments and inclining growth of the ICT sector would also drive the market growth in the forecast period. According to data from the Canadian Government, the revenue of the Information and Communications Technologies (ICT) sector in Canada grew by 5% during 2020.
• Rising growth of the aerospace & defense sector is further estimated to drive the market growth. For instance, the Indian aerospace and defense (A&D) sector is expected to grow by around US$ 70 billion by 2030, owing to the strong A&D ecosystem and increasing passenger traffic.
• Additionally, an increase in use of optical materials in the production of automobiles due to its applications in windows, lenses, sensors and others is expected to help the growth of optical materials market. For illustration, according to the International Organization of Motor Vehicle Manufacturers, the production of automobile in Mexico, increased to 1,678,414 during the second quarter of 2021, at 32% as compared to the production of 1,268,944 during the second quarter of 2020, which will also contribute to the demand of optical materials.

Figure: Optical Materials Market Revenue Share, by End Use Industry, 2020 (%) 

Optical Materials Market Segment Analysis- By Material Type

Inorganic coatings held the largest share in the optical materials market in 2020. Inorganic coatings are combined with ingredients such as additives, enamels, and tints to make the coating as secure as possible and are also used in glass surfaces which are the ideal surface for inorganic coatings. The fabrication of nanoparticles by the sol-gel process and their use in sol-gel-derived inorganic-organic composite matrices, are used in designing new optical materials. For instance, Materions company provides inorganic chemical synthesis and material transformation, in order to provide with physical deposition (PVD) materials for utilization in optical coating applications such as in aerospace, medical, automotive glass, infrared filters, laser optics, communications, and others.

Optical Materials Market Segment Analysis- By End Use Industry

Consumer Electronics held the largest share with 22% in the optical materials market in 2020 and is anticipated to grow at a CAGR of 5.7% during the forecast period 2021-2026. Rising demand for semiconductors in consumer electronics mainly in tablets, smartphones, laptops, and wearable devices is estimated to be one of the major reasons for the growth of the global optical materials market. For instance, in August 2021, Philips announced to invest US$40.41 million in consumer electronics. The company expanded its Pune operations to increase manufacturing in India. Thus, driving the optical materials market growth in consumer electronics. The optical materials based on UV-curing polymers have become increasingly widespread in recent years. They are used as lenses for applications such as miniature cameras, flashlights, and diffractive optical elements (DOEs) for structured light emitters.

Optical Materials Market Segment Analysis- By Geography

North America region dominated the optical materials market in terms of revenue with a share of 40% in 2020 and is projected to dominate the market during the forecast period (2021-2026). The growth in various end-use industries such as electronics, automotive, optical, medical, and aerospace are majorly driving the demand for optical materials in USA, Canada, and Mexico. In 2021, VIAVI Solutions Inc had announced that its Optical Security and Performance Products (OSP) (optical coating technology for anti-counterfeiting products, and other optics) division will be establishing a new production facility in Chandler, Arizona, USA to meet the rising demand for their products in the region. Additionally, in 2018, Nippon Electric Glass Co., Ltd. developed an optical coating material for display cover glass in collaboration with a research group led by Professor Hitoshi Takamura of Tohoku University and the University of Washington in the United States. This optical material will help in enabling displays that can be viewed with high contrast images and a high-quality appearance. The increasing development activities related to the optical materials market are also majorly driving the growth of the optical materials market in the North America region.

Optical Materials Market Drivers

An Increase in Demand for Optical Materials in the Aerospace Sector will Drive Market Growth

Aerospace applications require robust optical materials capable of operating in IR spectral regions. The near to mid-infrared region has always been crucial for aerospace because of the ubiquitous nature of IR sensors, detectors, and cameras. In addition, optical materials are necessary for aerospace applications because of the complexity of electro-optical systems operating in multiple wavelength regimes and traveling at high speeds and in harsh environments. Increasing demand for optical glass in aircraft components such as cockpit displays to enhance visual clarity and in other parts such as heads-up displays (HUDs), gyroscopes, and others, are driving the market growth. Moreover, the rising demand for new aircraft for military and commercial applications is anticipated to drive the demand for optical materials. Large aircraft manufacturing companies such as Boeing, headquartered in the USA, will deliver about 8,995 new commercial aircraft in North America from 2020-2038. Also, in January 2020, Airbus stated that, as part of its aim to produce 63 A320 family aircraft per month by 2021, it would increase the production pace of A320 family aircraft at its Airbus USA Manufacturing Facility in mobile to seven per month from the start of the year 2021. 

Significant Market Traction from Increasing Adoption of Optical Materials across the Consumer Electronics Sector

Consumer electronics, such as tablets, laptops, smartphones, and wearable gadgets containing semiconductors, are driving the global optical materials market growth. Additionally, UV-curing polymer-based optical materials have gained popularity over the glass and injection-molded plastic in the consumer electronics sector due to their ease in producing optical materials within a short period. When it comes to large-scale manufacturing and production, polymeric materials have several benefits over the glass. Also, when compared to glass alternatives, they offer a weight reduction in smaller size systems. Thus, which has raised its adoption across the consumer electronics sector. In recent years, the increasing growth of the consumer electronics sector has also driven the market for optical materials. For instance, according to Invest India, the electronics market was valued at US$118 billion in 2019-20 of which the consumer electronics segment held a share of 22%. Also, according to Japan Electronics and Information Technology Industries Association (JEITA), the production of consumer electronics equipment increased from US$248 million in June 2021 to US$271.6 million in July 2021. Thus, significant market traction from the increasing adoption of optical materials across consumer electronics is further projected to fuel the optical materials market growth during the forecast period.

Optical Materials Market Challenges

Miniaturization in Optics

Miniaturization is the trend to manufacture ever smaller optical products and devices. As smartphones and tablet become more widespread, miniaturized optical equipment has become increasingly significant in the industry. The optical elements must be connected to the macro world and must cover a specific surface or volume. To do so, high-quality millimeter-scale production for nanometer-scale structures must be established. When it comes to miniaturization, the shape, size, and distinguishing characteristics of the optical devices must be ensured for them to be properly integrated and packed in a successful industrial product that can match consumers' expectations for intelligence and multi-functionality. However, forming theories and technologies developed in the macro world cannot simply be scaled down to the micro world because it is impossible to scale down all parameters in the micro forming process due to side effects, which are well-known as a distinct feature of miniaturization. Secondly, to fully benefit from the fine structure of the components, nanostructure parameters should be changed locally. With a millimeter, optical element, and a 100 nm basic structural element, more than 100 million elements are produced. In this scenario, an optical multidimensional systems design that can manage a large number of parameters and is based on a rigorous technique to become a standard is appropriate. Hence, the challenges of miniaturization in optics will restrain the growth of the optical materials market during the forecast period 2021-2026. 

Optical Materials Market Industry Outlook

Technology launches, acquisitions, and R&D activities are key strategies adopted by players in this market. Optical Materials top 10 companies include:

1. DOW Chemical Company 
2. Schott AG
3. Corning Inc
4. Canon Optron, Inc
5. Nikon Corporation
6. Merck KGaA (Merck Group)
7. PPG Industries, Inc.
8. Heraeus Holding GmbH
9. Dynasil
10. Sumita Optical Glass and Others

Acquisition/Product Launches

• In July 2021, Dynasil Corporation of America, announced that its subsidiary EMF has doubled infrared coating production capacity. This was done to promote its extensive portfolio of commercial high-volume and large format optical coating solutions.
  
• In February 2019, The Dow Chemical Company unveiled DOWSIL EI-2888 Primerless Silicone Encapsulant, an optically-clear silicone for professional LED lighting that cures at room temperature. This advanced silicone technology provides superb optical performance without compromise and offers unique rheological properties for use with light fixtures in a variety of shapes and forms.

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