Precision Optics Market to grow at a CAGR of 11.1% and hit $60,033.6 Million by 2031 | BIS Research

The rise in demand for precision optical components for consumer electronics and biomedical devices is among the major driving factors for the precision optics market and has created a significant demand for precision optical components such as lenses, mirrors, windows, and filters. According to the Consumer Electronics Association, across various consumer electronics sales categories, computers sale went up by 34%, television sets sale was up by 12%, and smartphones sale were up by 1% from 2019 to 2021 globally, likely due to COVID-19 restrictions and more time spent at home for working and learning. For instance, the next largest consumer electronics sales category is tablet computers which recorded nearly $60 billion in sales in 2020. According to the World Health Organization (WHO), the adoption of smart medical devices is increasing rapidly, and in the year 2021, it reached to approximately two million different kinds of medical devices categorized into more than 7000 generic device groups. Therefore, the rising sales of consumer electronics and biomedical devices are leading to the rising need for precision optical components for continuous operation with high precision.

Market Lifecycle Stage

The Precision Optics Market has been in its growth stage, and much has been attributed to the technological advancements in this field. The ecosystem of the precision optics market comprises raw material suppliers, including glass, polymers, and other suppliers, precision optics producers, photonic manufacturers, and end users. The market is still developing, with China at the forefront, followed by other regions such as North America, Europe, Asia-Pacific, Rest-of-the-World, and the U.K.

Industrial Impact

• Precision optics are used in a wide range of optical components used in autonomous vehicles, such as radars, lasers, sensors, cameras, and others. The use of autonomous vehicles in industries offers advantages such as saving on labor costs and reducing carbon dioxide emissions by as much as 60% through the use of optimized driving. With the increased adoption of autonomous vehicles, the demand for precision optics is anticipated to rise in the upcoming future. 

• Moreover, the recent focus of the medical industry is on the development of smart disease detection equipment and smart medical wearables by utilizing precision optical components such as lenses, windows, and filters, among others.

Impact of COVID-19

The COVID-19 pandemic-related global lockdown led to production halts, disruptions in supply chains, and manufacturing activity, all of which had a detrimental effect on the market for precision optics in 2020. For instance, the Panasonic Corporation mentioned that the company’s sales decreased by around 11% in the fiscal year 2021 as compared to the fiscal year 2020. The key reasons for declining sales revenue were the impact of the spread of COVID-19 and deconsolidation in housing-related businesses. Further, the revenue of Nikon Corporation for the fiscal year ending March 2021 was 23.7% lower as compared to the fiscal year ending March 2020. Business segments of the company, such as imaging products business, precision equipment business, and industrial metrology and others, have shown several adverse impacts. However, the healthcare business segment witnessed a slight revenue growth as compared to the fiscal year 2020.

Market Segmentation:

Segmentation 1: by End User

•    Consumer Electronics

•    Aerospace and Defense

•    Semiconductor

•    Automotive

•    Biomedical

•    Manufacturing

•    Others

Based on end users, the precision optics market is estimated to be led by the consumer electronics segment during the forecast period, 2022-2031.

Segmentation 2: by Component

•    Transmissive

        o    Filters

        o    Prisms

        o    Lenses

        o    Windows

        o    Polarizers

        o    Beamsplitters

        o    Others

•    Reflective

        o    Mirrors

        o    Retroreflectors

        o    Others

Based on components, the precision optics market is estimated to be led by the transmissive segment during the forecast period, 2022-2031.

Segmentation 3: by Region

•    North America - U.S., Canada, and Mexico

•    Europe - Germany, France, Italy, Spain, and Rest-of-Europe (RoE)

•    China

•    U.K.

•    Asia-Pacific and Japan - Japan, India, South Korea, and Rest-of-Asia-Pacific and Japan

•    Rest-of-the-World

In the global precision optics market, China and North America are anticipated to gain traction in terms of precision optics production, owing to the continuous growth in consumer electronics and biomedical equipment and the presence of the world’s largest manufacturers in those regions.

Recent Developments in Precision Optics Market

•  In December 2022, Precision Optics Corporation, Inc. announced the receipt of a follow-on production order totalling approximately $2.6 million for optical assembly from one of the major U.S. defense contractors. In addition, the order is expected to be completed over the next 12 to 18 months.

•  In October 2021, Precision Optics Corporation, Inc. made an announcement for a strategic merger with a privately held company, Lighthouse Imaging LLC. Through this merger with a leader in medical optics and digital imaging, the company aims to help customers by leveraging its next-generation micro-optics capabilities with Lighthouse Imaging LLC’s leading-edge optical imaging electronics.

•  In August 2021, Edmund Optics Inc. made an announcement for the relocation of its regional South Korea office to a larger facility in the Mapo district of Seoul, aiming to facilitate internal and external collaboration and communication, enhanced services, a lab for specialized technical support, and easy access for visits.

Demand - Drivers and Limitations

The following are the demand drivers for the precision optics market:

•    Growing Demand in Life and Health Sciences Instruments

•    Increasing Adoption of Precision Optics in Advanced Manufacturing

•    Rising Uses of Precision Optics due to High Demand for Consumer Electronics

The market is expected to face some limitations due to the following challenges:

•    Complex Design and Manufacturing Process of Precision Optics

•    Lack of Skilled Workforce

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How can this report add value to an organization?

Product/Innovation Strategy: The product segment helps the reader understand the different components involved in the precision optics market. The component segment has been segmented into transmissive (filters, prisms, lenses, windows, polarizers, beamsplitters, and others) and reflective (mirrors, retroreflectors, and others). Moreover, the study provides the reader with a detailed understanding of the precision optics market based on end users, including consumer electronics, aerospace and defense, semiconductor, automotive, biomedical, industrial, and others. The increasing adoption of precision optics in advanced manufacturing technology is fuelling the growth of the market.

Growth/Marketing Strategy: The precision optics market has seen major development by key players operating in the market, such as business expansions, partnerships, collaborations, mergers and acquisitions, and joint ventures. The favoured strategy for the companies has been business acquisition to strengthen their position in the precision optics market. For instance, in July 2019, Precision Optics Corporation completed the acquisition of Ross Optical Industries, Inc., a privately held company based in El Paso, Texas. With this acquisition, the company would extend its precision optics product offering to include a wider range of lens and optical system sizes and expand its presence in the U.S. defense sector.

Competitive Strategy: Key players in the precision optics market analyzed and profiled in the study involve precision optics manufacturers and the overall ecosystem. Moreover, a detailed competitive benchmarking of the players operating in the precision optics market has been done to help the reader understand how players stack against each other, presenting a clear market landscape. Additionally, comprehensive competitive strategies such as partnerships, agreements, acquisitions, and collaborations will aid the reader in understanding the untapped revenue pockets in the market.

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