Global Optical Coatings Market

The growing end-use industries like electrical & electronics, telecommunication industry, and medical sector is majorly driving the demand for optical coatings market as it is widely used in lenses, optical fiber end faces, astronomical observations, laser processing machines, and other optical elements. According to the International Organization of Motor Vehicle Manufacturers, the global production of automotive drastically surged from 31,223,533 during January-June 2020, at a rate of 29.19% to 40,338,546 during January-June 2021. Furthermore, according to the latest data published by Stockholm International Peace Research Institute, which tracks military expenditure and arms trading globally, global military expenditure increased to US$1981 billion during 2020, an increase of 2.6% from the year 2019. Due to rising investment in 5G and other communications infrastructure, as well as increased data traffic as a result of the COVID-19 pandemic, the industry is further growing.

COVID-19 Impact

During the covid-19 pandemic, the optical coatings market witnessed a huge setback in terms of production and distribution due to various rules and regulations laid down by government across the world. According to International Monetary Fund, the world GDP contracted by 17.19% during the year 2020, adversely affecting the world economy in various ways, hampering the growth of the manufacturing sector. This adversely affected the growth of any major sectors that is not related to healthcare and medical industry. This lead to the downfall of the production of optical coating market which eventually restricted the growth of the optical coatings market. The impact of covid-19 on other end use industries like aerospace, electrical & electronics, telecommunications, solar industry and other industries also affected the optical coatings market, since it is majorly used in the products of these end use industries.

Report Coverage

The report: “Optical Coatings Market- Forecast (2022-2027)” covers an in-depth analysis of the following segments of the Optical Coatings Industry.

By Type: Anti-Reflection, Oleophobic/Hydrophobic Coatings, IR Pass & IR Block (Hot Mirrors, Cold Mirrors), UV Pass & UV Block, Optical Bandpass Filter (Shortpass, Longpass, Polarizing Filter, Neutral Density), Hard Coating and others.

By Materials: Metal Oxide Compounds, Fluoride Compounds, II-IV Semiconductor Compounds, Transparent Conductors, Metals, Multicomponent and others.

By Technology: Ion-Assisted Electron-Bean (IAD E-Beam) Evaporative Deposition, Ion Beam Sputtering (IBS), Advanced Plasma Sputtering (APS), Plasma Assisted Reactive Magnetron Sputtering (PARMS), Thermal Evaporation, Electron Beam Deposition, Dip and Spin Coating and Others.

By Substrate: Borosilicate Glass, Fused Silica, Calcium Fluoride, Zinc Selenide, Zinc Sulfide, Germanium and others.

By Application: Mirrors, Reflectors, Binoculars and Telescopes, Bulbs, Tube Lights, and Other lightings, Ballistic Glass, Display Screens, Sunglasses, Spectacles and others.

By End Use Industry: Electronics & Semiconductor, Telecommunication, Medical, Solar Power, Automotive, Military & Defense and others.

By Geography: North America (USA and Mexico), Europe (UK, Germany, France, and Rest of Europe), APAC (China, Japan, India, South Korea, Taiwan, and Rest of Asia Pacific), and RoW (Latin America, Middle East, and Africa).

Key Takeaways

• Asia-Pacific dominates the global Optical Coatings market, owing to growth in electronics and automotive sector in the region. According to the Department of Promotion Industry and Internal Trade (DPIIT), the Indian Automobiles market invested around US$ 24.5 million worth of FDI (Foreign Direct Investment) during the year June 2020.
• Rising demand for optical coatings from the solar sector is driving the market growth. For instance, according to the Global Solar Council, 18,070 MV of total solar PV capacity has been installed in Vietnam during the year 2020. It is expected to reach up to 36,774 MV of solar PV capacity by the end of 2025.
• However, the COVID-19 has impacted the whole supply chain which has hindered the market growth in the year 2020 as most of the industries were fully/partially shut down which led to an imbalance in production, logistics, and consumption.

Optical Coatings Market Segment Analysis - By Type

Anti-reflection segment dominated the optical coatings market in 2021 and is growing at a CAGR of 8.9% during the forecast period from 2022-2027. Because of its ability to provide high-quality coatings with high transmission power and low reflection power on components such as lenses, mirrors, and display screens used in various industrial and consumer applications, the anti-reflection coatings type segment holds a significant market share of the overall optical coatings market. Anti-reflection coatings are gaining traction in the worldwide optical coatings market as a result of these considerations. Developments in the eyewear and photovoltaics industries, as well as an increase in antireflective coating applications in the construction sector, are driving the anti-reflective coatings market. However, the market's growth is hampered by high production costs and a lack of understanding regarding coating maintenance and proper application.

Optical Coatings Market Segment Analysis - By Material

Metal oxide compounds dominated the optical coatings market in 2021 and is growing at a CAGR of 7.8% during the forecast period (2022-2027) due to the various advantages provided by metal oxide compounds such as easy oxidation, surface deposition, and durability. Metal oxide compounds such as oxides (selenium, aluminium, titanium and zirconium), metals (copper, gold, and silver) and fluorides (magnesium, calcium and strontium) is extensively used in the manufacture of optical coatings. According to International Aluminium Association, the total production of aluminium increased by 5.37% to 186.1 thousand metric tonnes in January 2021 from 176.6 thousand metric tonnes in January 2020. The easy availability of metal oxide compounds is another factor for holding majority of share in optical coatings manufacturing.

Optical Coatings Market Segment Analysis - By Technology

Ion-assisted electron-bean (IAD E-Beam) evaporative deposition technology dominated the optical coatings market in 2021 and is growing at a CAGR of 12.4% during the forecast period (2022-2027). The various advantages provided by ion-assisted electron-bean (IAD E-Beam) evaporative deposition such as reduced cost of ownership, long mean time between maintenance (MTBM) and higher ROI & throughput is driving the demand for ion assisted technology. It provides uniform substrate coverage control over the energy and current of the beam. The aforementioned advantages are the major factor that most of the players are using this technology.

Optical Coatings Market Segment Analysis - By Substrate

By substrate, germanium segment dominated the optical coatings market in 2021 and is growing at a CAGR of 5.4% during the forecast period 2022-2027. Germanium is abundantly found in nature and can be polished into appropriate shapes with a high refractive index with good compatibility with anti-reflective coatings. Fused silica is the second-largest substrate type in the optical coatings market and is one of the major raw materials used in glass manufacturing. According to UN COMMTRADE, the exports of fused silica/fused quartz increased by 10.46% to US$150.41 million during the year 2020 from US$136.16 million during the year 2019. Fused silica segment has registered the second-fastest growth rate with a CAGR of 10.5% during the forecast period. Fused silica is one of the materials of choice of glass manufacturing which is used in various end-use industries. It is widely used in the manufacturing of optical parts such as lenses, mirrors, and other products.

Optical Coatings Market Segment Analysis - By Application

Mirrors segment dominated the optical coatings market in 2021 and is growing at a CAGR of 8.5% during the forecast period (2022-2027). Mirrors are widely used in various applications and among various end use industries. This is majorly increasing the demand for mirror segment in the optical coatings market. Mirrors are used in automotive industry, electrical and electronics industry, telecommunication industry, solar power generation industry, military & defense industry and others. According to International Trade Centre, the world exports of glass mirrors increased by 2.27% to US$1,081.10 million during 2020 from US$1,057.75 million during 2019. This is majorly driving the demand for optical coatings in mirror application.

Optical Coatings Market Segment Analysis - By End Use Industry

Electronics and semiconductors segment dominated the optical coatings market in 2021 and is growing at the highest CAGR of 11.3% during the forecast period (2022-2027). Due to rising demand for highly resistant and high dielectric strength coating layers in photovoltaic (PV) cells, electronics assemblies, ICs, and other optoelectronic devices, the electronics & semiconductor industry holds a major market share of the overall optical coatings market. According to the World Semiconductor Trade Statistics (WSTS), the Worldwide Semiconductor Market has registered 6.8% growth in 2020 as compared to the previous year and is expected to grow to US$ 551 billion in 2021, which represents a growth-rate of 25.1%. Likewise, recent insights from the Semiconductor Industry Association (SIA) states that the U.S invested around US$ 142.2 billion on computer, and US$ 53 billion on consumer electronics such as cell phones, TV and other similar applications. These electronic products use optical coatings on display screen, lightings systems, surface reflectors, and camera optics.

Optical Coatings Market Segment Analysis - By Geography

Asia Pacific region is the major shareholder with 39.9% share in the global optical coatings market in 2021 since the region is leader in manufacturing automobile and electrical & electronics products. This expansion may be ascribed to increased demand from the electronics and semiconductor industries, as well as increased government and major player contributions to commercializing optical coatings in the region. According to International Organization of Motor Vehicle Manufacturers, the production of automobile in Asia Pacific region during the first two quarters of the year 2021 was the highest at 22,685,914 units with an increase of 27% from the previous year. Furthermore, recent study published on the Economic Times (Telecom) in 2021, electronic manufacturing and production is valued around US$ 100 billion in India currently. It further states that the mobile manufacturing in India is estimated to surpass INR 90000 crore (US$ 12 trillion) by the end of 2021 as per the statement made by the Indian IT Minister. This will contribute to the growth of the optical coatings market in the Asia Pacific region during the forecast period 2020-2026.

Optical Coatings Market Drivers

Increasing demand from solar power industry

The increasing awareness about renewable energy across the globe is contributing to the solar power industry gaining a lot of momentum in the present days across the world. The increasing installation of solar capacities in various countries is contributing to the demand for optical coatings as it is widely used in the coating of solar panels for refraction and other purposes. According to Solar Energy Industries Association, the installed solar capacity in the US increased at a rate of 24.62% to 97275.5 megawatts of direct current in the year 2020 from 78054.4 megawatts of direct current in 2019. Additionally, according to the Ministry of new and renewable energy, of the Government of India, the total installed capacity of wind energy in India was 37739.45 megawatts in the year 2020, an increase of 5.94% from 35621.67 megawatts in the year 2019. Furthermore, according to the long-term renewable energy development plan of the Chinese government, the wind power generation target for 2020 was 30 million kilowatts. According to the Africa-EU Renewable Energy Cooperation Program(RECP), a total of 99.1 GW of grid-connected solar power was installed during the year 2017, which is to date more than any other power generation technology. The optical coatings are applied on the top layers of solar cells, solar panels, and other photovoltaic components for enhancing the performance of solar panels by increasing their light-collecting yield and the life span while reducing the maintenance costs. Solar panels mainly make use of anti-reflective optical coatings, which are similar to optical coatings when applied to camera lenses. The optical coating consists of a thin layer of dielectric materials, which helps in filtering specific light rays. This will further drive the demand for the optical coatings market as it is extensively used in the solar power industry across the globe.

Surge in the production in automotive industry

The growing production in the automotive industry is one of the major factors driving the demand for optical coatings as they are majorly used for various applications in the automotive industry. The evolving trends and technologies in the automotive industry are increasing the usage of various products in the automotive industry which is further increasing the growth for optical coatings. Furthermore, the increase in the production of electric cars is also contributing to the growth of the optical coatings market as it is used for various electrical components such as onboard chargers, Electric Power Control Unit (EPCU), and others. According to the International Organization of Motor Vehicle Manufacturers, the total production of cars increased by 26.15% to 28,148,903 during the first quarter to the second quarter of 2021 to from 22,314,111 during the first quarter to second quarter of 2020. Additionally, according to International Energy Association, the sales of electric cars reached 2.1 million units in the year 2019 and registered a year-on-year increase of 40%. Furthermore, the total production of all the vehicles globally stood at 77,621,582 units in the year 2020, and electric cars accounted for 2.6% of the sales. Optical sensors are one of the key technologies used in autonomous and semi-autonomous cars. It majorly makes use of optical coatings. Vehicles feature several optical components such as radars, lasers, and cameras based on LEDs and infrared lasers. Therefore, several new technologies incorporating optical components in the automotive industry which is being introduced in next-generation cars, including camera systems with LIDAR lasers, environment detection, and infrared (IR)-based auxiliary lighting. In addition, other driver-assistance technologies such as lane assistance, collision avoidance, traffic sign recognition, and night vision depend on optical sensors for their operation. Therefore, the increase in the manufacturing of cars is majorly driving the demand for optical coatings from the automotive industry.

Optical Coatings Market Challenges

Volatile raw materials prices:

The manufacturing process of optical coating market includes various raw materials such as oxides (selenium, aluminum, titanium and zirconium), metals (copper, gold, and silver) and fluorides (magnesium, calcium and strontium). The raw materials used in the optical coatings market is highly volatile and unpredictable with a major impact on the price fluctuations of the metals and oxides, such as gold, titanium dioxide, indium, copper, and silver. The prices and availability of raw materials, especially metals and oxides, highly fluctuate, and the rise in their prices adversely affect the manufacturing cost involved in producing optical coatings. Indium is the one of the key raw materials used in manufacturing transparent optical coatings. According to Trading Economics, the price of Indium increased by 42.86% since the beginning of the year 2021 and at a rate of 23.64% from the year 2020. This increase of price in raw materials and price fluctuations is majorly challenging the growth of the optical coatings market.

Optical Coatings Market Industry Outlook

Technology launches, acquisitions and R&D activities are key strategies adopted by players in the Optical Coatings Market. The key players in the Optical Coatings Market includes:

• Nippon Electric Glass Co., Ltd.
• PPG Industries, Inc.
• VIAVI Solutions Inc.
• AGC Inc.
• Carl Zeiss Jena Gmbh (ZEISS International)
• Umicore
• Materion Corporation
• SCHOTT AG
• Celestron, LLC
• Emund Optics
• Jenoptik
• Others

Acquisitions/Expansion:

• In September 2021, Materion Corporation announced the acquisition of Optics Balzers AG, industry leader in thin film optical coatings. Materion's transformation into a global provider of advanced materials solutions is accelerated by this acquisition, which significantly expands its geographic reach beyond its core of North America to include Europe and Asia.
• In June 2021, Emund Optics expanded the number of new sizes and optical coatings available for many off-the-shelf optical components, lowering the costs and lead times associated with rapid prototyping. TECHSPEC Sapphire Windows are one of the product lines that has a wider range of sizes and coating options.
• In February 2020, ZEISS and Sony announced the expansion of their strategic collaboration from digital imaging to Xperia smartphones. Sony's new flagship smartphone, the Xperia 1 II, will include ZEISS optics with T* anti-reflective coating to improve image quality and provide consumers with the best photography experience.
• In November 2019, Nippon Electric Glass Co., Ltd. established technology of mass production for micro-ball lenses for 5G with uniform anti-reflection coating. As optical communication devices must improve in speed and capacity in order to implement the next-generation communication standard known as 5G, newly developed technology aids in making them more compact while achieving higher performance.