China's industrial laser market is expected to resume its normal double-digit growth rate, and the growth rate of China's industrial laser market is expected to reach 10% in 2023.
China's economy went through a roller coaster ride in 2022, but eventually stabilized, with gross domestic product (GDP) growing by 3%; by Chinese standards, this is very slow growth. However, the bright side is that China's high-tech manufacturing industry is growing much faster than the previous year, with a growth rate of 7.4%. The latter trend strongly supports the stable development of China's laser industry and promotes the rapid transformation and upgrading of China's national economy.
It was not until 2022 that the impact of the COVID-19 epidemic on China's laser industry was minimized. Many Chinese cities with significant laser operations, such as Shanghai, Suzhou and Shenzhen, have been affected by the last few waves of the epidemic. Affected by this, the growth of China's industrial laser market has slowed to 5% in 2022, which has not reached the previously expected growth of 10% to reach US$13.5 billion (see Figure 1). As the COVID-19 epidemic subsides, China's overall economy is expected to enter the recovery channel in 2023, with a growth rate of approximately 5%. China's laser industry will regain its growth vitality and is expected to achieve an annual growth rate of 10% by the end of 2023.
Picture Figure 1: China’s laser market from 2011 to 2023. In 2022, China's industrial laser market will reach US$13.5 billion, with an annual growth rate of 5%.
In addition to the impact of the COVID-19 epidemic, China's economy will also face triple pressure in 2022: shrinking demand, broken supply chains, and weak economic activity. In 2022, China's industrial laser market's share of the global industrial laser market has declined slightly from 60.1% in 2021 to 58.8%, but it still firmly accounts for half of the global market (see Figure 2) .
Image Figure 2: Global market share of industrial lasers. In 2022, China's industrial laser market's share of the global industrial laser market will drop to 58.8%. In 2021 it is 60.1%.
Specifically, China's fiber laser market will remain basically stable in 2022, with sales increasing slightly from the previous year, but both revenue and profit margins have declined. In 2022, the sales revenue of China's fiber laser market will drop to US$1.7 billion, showing a negative growth of 1.8% for the first time. China's fiber laser market is expected to rebound in 2023, achieving an annual growth rate of 6.4% and sales revenue reaching US$1.79 billion (see Figure 3).
Picture Figure 3: China’s fiber laser market from 2014 to 2023. In 2022, China's fiber laser market will remain basically stable, with sales slightly higher than the previous year, but both revenue and profit margins have declined.
A recent report from BOS Photonics shows that fiber laser prices are still falling in the Chinese market. In 2022, the price war for fiber lasers has intensified the price decline, and the impact of the price war has even spread to fiber laser components and fiber laser-based systems. Price erosion has also shifted from low-end products to high-end products, with price drops as high as 40% in 2022. The price war, which has lasted for years, has forced many companies to the brink of bankruptcy.
In 2022, the overall situation of China's fiber laser market is: sales growth, price decline, low profit or no profit. The market share of various fiber laser manufacturers in the Chinese market may continue to change. In 2022, Raycus Laser will surpass IPG Photonics with a market share of 26.8%, becoming the largest fiber laser supplier in the Chinese market (see Figure 4). It is worth noting that in 2022, IPG Photonics’ sales in the Chinese market dropped by 12.5%, and nLIGHT’s revenue in the Chinese market fell sharply by 62%.
Picture Figure 4: Market share of various fiber laser suppliers in the Chinese market. The share ratio between domestic and international suppliers has changed significantly recently, with Raycus Laser surpassing IPG Photonics to become the new market leader with a market share of 26.8%.
China's laser cutting machine market is affected by the fiber laser market. Although the sales of fiber laser cutting machines have grown rapidly, the unit price of the equipment has declined. As profit margins decline, many Chinese companies are turning their attention to overseas markets. In 2022, China's overall cutting machine market will reach US$4.6 billion, and it is expected to exceed US$5 billion in 2023, a year-on-year growth of 7.6% (see Figure 5).
Picture 5: China’s laser cutting machine market from 2016 to 2023. In the Chinese market, the sales of laser cutting machines have grown rapidly, but the unit price has declined. In 2022, China's overall cutting machine market will reach US$4.6 billion, and it is expected to exceed US$5 billion in 2023, a year-on-year growth of 7.6%
In recent years, laser welding equipment has ushered in new market opportunities. Laser welding technology has gradually been used for precision micromachining applications in power batteries, automobiles and consumer electronics, as well as aviation and rocket engines, spacecraft, automotive engines and other fields that require laser welding of highly complex component structures. In 2022, China's laser welding system market will be approximately US$3 billion, a year-on-year growth of 25%. With the increasing demand from domestic power battery manufacturers, the demand for laser welding equipment is expected to increase significantly. The overall market for laser welding equipment in China is expected to exceed US$4.2 billion in 2023, an increase of 44% over last year (see Figure 6).
Picture 6: China’s laser welding system market from 2016 to 2023. Driven by precision micromachining applications, laser welding equipment is gradually adopted in the Chinese market. In 2022, China's laser welding system market will be close to US$3 billion, a year-on-year growth of 25%.
In 2022, China's laser additive manufacturing market will reach US$2.3 billion, a year-on-year increase of 16%. The driving force behind market growth is the emergence of three domestic trends: the industrialization of additive manufacturing processes, the emergence of new business models, and the widespread adoption of laser systems for metal 3D printing. These three trends have all played an important role in the growth of China's laser additive manufacturing market, which is expected to reach US$2.8 billion in 2023, a year-on-year growth of more than 20% (see Figure 7).
Picture 7: China’s laser additive manufacturing equipment market from 2012 to 2023. In 2022, China's laser additive manufacturing equipment market will be US$2.3 billion, and it is expected to reach US$2.8 billion in 2023.
China's ultrafast laser market is growing rapidly, driven by demand for semiconductor, display manufacturing and glass processing applications. Currently, 80% of ultrafast lasers sold in the Chinese market are picosecond lasers, with femtosecond lasers accounting for a smaller proportion, although the market share of femtosecond products has increased from 10% to 20% in 2022. In 2022, domestic ultrafast lasers will account for 30% of the overall ultrafast system market, reaching US$913 million; this number is expected to exceed US$1 billion in 2023 (see Figure 8).
Picture 8: China’s ultrafast laser market from 2015 to 2023. China's ultrafast laser market is growing rapidly. In 2022, domestic ultrafast lasers will account for 30% of the overall ultrafast system market, reaching US$913 million; this number is expected to exceed US$1 billion in 2023.
The lower costs of fiber lasers and direct diode lasers will promote the rapid growth of China's laser cleaning market in 2022. In 2022, China's laser cleaning market will reach US$83 million, and it is expected to reach approximately US$93 million in 2023 (see Figure 9).
Picture 9: China’s laser cleaning system market from 2018 to 2023. Due to the low cost of fiber lasers and direct diode lasers, China's laser cleaning market will grow rapidly in 2022, with the total market reaching US$83 million, and is expected to reach approximately US$93 million in 2023.
In 2022, the quantity and quota of China's import and export of laser components will decline. The estimated import and export volumes in 2022 are 103 million units and 18.9 million units respectively; the amounts of imported and exported laser components are US$2.43 billion and US$664 million respectively. The overall decline in these values is partly due to oversupply in the domestic market, increased tariffs, trade barriers imposed on Chinese laser products and the impact of the COVID-19 pandemic.
Overall, 2022 is not a typical year for China’s laser industry. The laser welding, laser additive manufacturing and laser cleaning markets are highlights in 2022 and will continue to be so this year.
It is expected that China's fiber laser market will see some differentiated development in 2023 to avoid further price wars. In the near future, expanding overseas markets will also be the goal of Chinese laser cutting machine manufacturers. Looking forward, China's industrial laser market is expected to resume its normal double-digit growth rate. BOS Photonics predicts that the growth rate of China's industrial laser market will reach 10% in 2023.
