ANALYSIS: ENGINEERED MATERIAL & OPTOELECTRONIC COMPONENTS
– we think long-term; we think slow and, once committed, we act fast. In the last fiscal year, we
achieved a milestone of 200bn VCSEL emitters shipped for consumer electronics, but it took us about five years of planning and execution to get to that point. Similarly, for the past 30 years, we have been investing in silicon carbide electronics and that market started inflecting three to four years ago and is expected to grow at a >30% five-year CAGR. Another example is AI, which
‘We are definitely excited by the opportunities of our lasers, materials and optics for advanced semiconductor capital equipment’
›
synergy opportunities that we could see.
Why did you change the company name from II-VI to Coherent, and how did customers react? We preferred the name Coherent because it has the universal meaning of ‘bringing things together’ and we knew the name would expand our brand recognition and value creation. We closed the acquisition
of ‘legacy Coherent’ on July 1, 2023, and then, in September of the same year, we changed our name to Coherent. Since then, the response from our customers, end-customers, suppliers, investors, employees and the market at large has been fantastic. We are so fortunate to have deep relationships with our universe of partners – many spanning decades – and that has enabled us to really focus on value- added, customer-appreciated innovation.
How difficult was it to integrate teams from II-VI and Coherent? We always take a very structured approach to our acquisitions. From my experience with the planning and execution of multiple acquisitions during my tenure in the company, I am always amazed by the systematic, deliberate approach to thinking about acquisitions and their integration. The vision and the direction is set at the very top,
34 Electro Optics May 2O24
starting with our Board, our CEO and the executive team. We take our time with the planning; we debate, deliberate, decide, commit, and then it’s an inveterate focus on execution. We begin integration planning well before the acquisition closes – so, from day one, the entire company is aligned and starts ‘coherently’ driving our short-term goals and long-term objectives.
How is the marketing organised at Coherent? We are a market-driven company and strongly believe it’s the market that drives the technology – not the other way round. Hence, our marketing team is organised by markets. All our marketing activities from sizing and segmentation, strategy development, product positioning, and ‘marcom’ are organised by markets. We have been organised this way for about five years and our customers really appreciate this structure and the simplicity.
What are the factors of your success? Coherent’s success, so far, is the result of vision, strategy, and direction, combined with a relentless focus on execution by our amazing global employee- base. Our dedication and focus on long-range planning is a differentiator. We have a regimental, long-range planning process that focuses on five-, 10- and even 20-year horizons. We believe patience is a virtue
was one of the underlying mega-trends for our acquisition case of Finisar – the world leader in datacom transceivers – back in 2018. At that time, Dr Giovanni Barbarossa, our Chief Strategy Officer and President of Laser Solution segment, called the mega- trend the migration from ‘data on-demand’ to ‘AI on-demand’. While we expected AI to drive tremendous demand for connectivity – in turn driving demand for transceivers and all the enabling components, including and, especially, advanced lasers – we didn’t know exactly when that market would inflect. Now, we all know that inflection happened in November 2022 with the emergence of ChatGPT. AI has become a major driver of growth for our datacom business. There are many such examples.
And how do you see the markets developing over the next five years? All of our markets are slated for exciting growth over the next five years. Our industrial, communications, electronics and instrumentation markets are expected to grow at 9%, 14%, 20% and 8% CAGR over the next five years respectively. Our combined TAM is expected to grow at a strong 14% CAGR over the same time-period. These are driven by underlying mega-trends. Our fastest growth market
is electronics, driven by the electrification of automobiles. Our silicon carbide materials and devices platforms enable highly efficient power electronics in electric vehicles,
Analysis and Opinion section sponsored by
charging infrastructure and energy applications. Within communications, AI
is the biggest growth driver, where it’s all about high-speed connectivity enabled by our datacom transceivers. Within industrial, the
market for OLED displays for smartphones and tablets is growing, along with the emergence of micro-LEDs. We have some unique laser processing tools for these applications. As the semiconductor industry marches towards the $1tn milestone, we are definitely excited by the opportunities of our lasers, materials and optics for advanced semiconductor capital equipment. Also, e-mobility represents a major growth opportunity for our precision manufacturing vertical. Our unique adjustable ring mode laser platform delivers the most advanced battery welds. Our electronics market is also seeing a lot of activity around sensors for AR/VR and wearables. Wearables are becoming personal health monitors and we are really excited with all the opportunities that it represents for our compound semi lasers, optics and materials.
What are your future challenges? We are technology agnostic – we invest in technologies that the market will need, and the biggest challenge for our team is predicting future technology shifts in the market. Unfortunately, we don’t have a crystal ball, so we have to rely on our own analysis and intelligence looking at every market data-point and reading every tea leaf, trying to triangulate and predict future needs! Fortunately, we are in the privileged position of having the main players of innovative products in global markets as our customers. Through our great customer relationships, we are able to feel the pulse of the market and, so far, we’ve been reasonably successful in seeing what’s coming. It’s all about the ability to see around corners! EO
www.electrooptics.com
Coherent
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36
