The VCSEL market size is projected to grow from US$ 1.4 billion in 2022 to US$ 4.7 billion by 2030; it is estimated to record a CAGR of 17.0% from 2023 to 2030
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The growing adoption of VCSEL for 3D sensing applications, such as smartphones for gesture control and facial recognition features, contribute to the VCSEL market growth.In addition, the use of VCSEL for data communication and LiDAR system for automotives propels the market growth.
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The rising integration of technologies such as IoT across various industries such as healthcare, automotive, and building necessitates using fiber optics communication technologies, contributing to the demand and adoption of VCSEL.
According to the International Organization of Motor Vehicle Manufacturers, in 2022, India, China, Indonesia, South Korea, and Thailand witnessed a significant rise in vehicle production.Additionally, regional and global automotive manufacturers are investing in establishing new vehicle production plants across the region.
For instance, in March 2022, Triton Electric Vehicle LLC announced the launch of its new production plant in Gujarat, India. In addition, in June 2022, BMW announced the opening of its new electric vehicle production plant in China with an investment of US$ 2.2 billion. Thus, such growing investments in the automotive industry increase the demand for sensing technology for newly built automobiles. In the automotive industry, VSCEL technology in automotives is used for various sensor applications inside and outside the automotive cabin, contributing to the demand for VCSEL market in the region.
The COVID-19 pandemic adversely affected various industries in the North American region and directly impacted the overall spending.According to the Center for Strategic and International Studies, owing to the pandemic, the US experienced a contraction in GDP in the second quarter of 2020.
The COVID-19 pandemic led to the temporary closure of manufacturing plants in the countries of North America.The manufacturing delays and component shortage faced challenge in sourcing raw materials and components leading to the production constraints.
These disruptions impacted the availability and delivery of VCSEL products, which negatively impacted the VCSEL market size.
Furthermore, the COVID-19 pandemic accelerated the adoption of technologies and various technological advancements such as 5G, artificial Intelligence, Internet of Things, etc.For instance, according to the federal communication commission, the American Commission established the 5G Fund for Rural America in October 2020 to make up to $9 billion in Universal Service Fund support available to carriers to deploy advanced 5G mobile wireless services in rural America (including up to $680 million for deployment on Tribal lands).