Why is it urgent to develop high-end laser core technology?

Laser Manufacturing: A Supporting Technology for 'Made in China 2025'

Laser manufacturing is a pivotal supporting technology for China's 'Made in China 2025' development strategy. As the world enters an era of innovation globalization, innovation elements like talent, technology, and capital are accelerating their global flow. A new round of scientific and technological revolution and industrial transformation is rapidly emerging, with new industries, business models, technologies, and modes constantly appearing. Developed countries have introduced a series of national strategies, such as 'Industry 4.0' and the Industrial Internet, to seize the commanding heights of emerging industrial development. Today, laser manufacturing is widely applied across various industries, including machinery, automotive, aerospace, steel, shipbuilding, electronics manufacturing, and military.

Core Technologies of High-End Lasers

Developing core technologies for high-end lasers has become an urgent priority. High-brightness, high-power semiconductor lasers and fiber lasers are among the world's latest generation of industrial and military lasers, with an average annual growth rate exceeding 35% in recent years, demonstrating immense potential.

High-power semiconductor laser chips are truly the 'heart' of lasers. Using 976 nm high-power semiconductor lasers as pumps is a key problem that needs to be addressed for 10-kilowatt (kW) high-power lasers. Developing a new generation of high-power, high-stability, narrow-linewidth, and wavelength-stable semiconductor laser chips, as well as 10-kW high-brightness direct semiconductor lasers, can break foreign technological blockades and enhance China's overall laser industry level and core competitiveness.

Fiber lasers are urgently needed for both civilian and military applications. IPG Photonics in the United States has achieved single-fiber, single-mode output of 10 kW through co-pumping technology. The U.S. military is intensively replacing traditional chemical lasers with fiber lasers for airborne, shipborne, and vehicle-mounted laser weapon systems. To meet market demand for 10-kW civilian and military fiber lasers, urgent project initiation is needed for focused research.

Ultrafast lasers are key to determining future precision micro-manufacturing. Ultrafast lasers are one of the core light sources for precision laser manufacturing and fine additive manufacturing, widely used in industries such as 3C electronics, display panels, solar cells, and integrated circuit manufacturing. High-power ultrafast lasers, with their combined characteristics of high average power and high peak power, are highly suitable for precision processing of high-hardness, high-strength, and high-brittleness materials. This holds significant application value in important fields such as aero-engines, semiconductor chip manufacturing, industrial precision processing, military blinding white lasers, and scientific research. The development of industrial-grade kilowatt femtosecond laser products is of great significance for improving China's high-end intelligent manufacturing industry.

Applications of laser intelligent equipment will cover large-scale equipment manufacturing in aerospace, shipbuilding, marine engineering equipment, petrochemical, and national defense fields, including processes such as precision drilling, scribing, surface modification, cleaning, and additive manufacturing. There is a high demand for laser processing equipment for aero-engine turbine blade laser drilling equipment, aerospace titanium alloy large compartments, and high-temperature titanium alloy lightweight structural components that are load-bearing and resistant to high temperatures for long flight durations. Ultrafast laser precision micro-processing primarily meets the needs of the electronics industry. China's LED industry scale has reached 275.7 billion yuan, a year-on-year increase of 31%. The healthy development of the semiconductor chip and LED markets will stimulate the demand for laser precision micro-processing equipment. High-end equipment such as integrated circuit excimer laser lithography machines have already occupied an important position.

Dynamics of China's Laser Industry Development

The global intelligent manufacturing industry is growing rapidly, and laser technology has become an indispensable supporting technology. In 2018, the global laser industry reached $100 billion, with an annual growth of approximately 7.1%. Fiber lasers have become the mainstream direction for laser technology development and the main force in laser industry applications.

1. Overall Domestic Development Dynamics

Currently, the overall market size of China's laser industry chain is approximately 80 billion yuan. There are over 200 scaled enterprises and more than 50 research institutions. Among them, the manufacturing industries in the South China, Central China, and East China regions are well-developed, naturally becoming key regional markets for laser processing. The laser industry in the Northwest and Southwest regions is developing rapidly. Fiber lasers are already the absolute mainstream in the industrial laser market. Currently, more than a dozen national 'Thousand Talents Program' experts are engaged in R&D and industrialization in this field.

Representative domestic enterprises such as Raycus Laser and Maxphotonics have successfully developed medium and high-power fiber lasers. In 2018, domestic small-power fiber laser shipments reached 90,000 units, accounting for over 85% of the Chinese market. 450 units of domestically produced 2 kW fiber lasers have been put into use, and nearly 60 units of 6 kW high-power fiber lasers have entered the market. Annual sales of domestic medium-power fiber lasers exceed 9,000 units.

The application of fiber lasers in laser cutting systems has seen explosive growth in the past two years, with over 20,000 units soaring in 2018. In 2018, Han's Laser's high-power laser equipment installed over 1,000 units annually, with cutting machines reaching 15 kW and welding machines reaching 20 kW. Nearly 400 units of 6 kW laser cutting machines with domestic light sources have been sold. Laser equipment is developing from digital automation to intelligence.

In 2018, domestic UV laser sales exceeded 10,000 units, with Huaray Laser's UV laser production reaching nearly 4,000 units. As China vigorously promotes the development of the integrated circuit industry, the significant increase in sales of micro-processing systems for printed circuit boards and consumer electronics products brings broader market space for UV lasers.

In the domestic new energy battery welding market, China's new energy vehicle sales reached 550,000 units in 2018. Leading enterprises such as United Winners Laser, Han's Laser, Yifei Laser, Guangda Laser, and Hymson Laser contributed to impressive performance growth. It is predicted that by 2020, the market size of lithium equipment will be approximately 52.2-67.1 billion yuan, and the market size of lasers for power battery welding is expected to reach 7-9 billion yuan.

2. Major Domestic Laser Enterprises

(1) Han's Laser (Shenzhen): In 2018, Han's Laser achieved operating revenue of 11 billion yuan, of which high-power laser business revenue was 2.3 billion yuan, a year-on-year increase of 26.14%, basically in line with the overall growth rate of the current laser cutting equipment market. The company's product orders increased significantly compared to the previous year due to strong demand in consumer electronics, new energy, high-power, and PCB equipment. On January 10, 2017, Han's Laser successfully acquired Jiangsu Jinfan Zhanyu New Energy Technology Co., Ltd., a professional enterprise engaged in lithium-ion battery production equipment.

(2) Huagong Laser (Wuhan): Huagong Laser is a manufacturer of laser equipment and plasma cutting equipment and a core subsidiary of HGTECH Co., Ltd. HGTECH's revenue in 2018 was 5.233 billion yuan, of which laser processing equipment revenue was 1.778 billion yuan. The precision laser system business group's sales in 3C consumer electronics, PCB/FPC, brittle materials, and new energy industries increased by 40%. In recent years, the company has actively deployed in automotive lightweight welding systems and new energy vehicle electronics, forming a unique advantage. The 'Automotive Body-in-White Welding' project won the National Science and Technology Progress First Prize, and the first domestic all-aluminum car body laser automated welding production line was successfully implemented. Among automotive parts laser processing equipment, automation and welding production lines grew the fastest, winning bids for power battery tray projects from internationally renowned automobile companies, becoming the world's first high-end aluminum alloy battery tray project. Currently, Huagong Laser accounts for nearly 90% of the domestic market share in automotive body-in-white online welding business.

(3) Raycus Laser (Wuhan): Established in 2007, Raycus Laser was the first in China to achieve localization and industrialization of fiber lasers, holding several world-leading patented technologies and three 'Thousand Talents Program' national specially appointed experts. Their products range from 10 W to 100 W pulsed and 5 W to 30,000 W continuous in two major series. They successively developed the first domestic 1kW, 2kW, 4kW, and 10kW fiber lasers, breaking the technological blockade and price monopoly of a few foreign manufacturers on fiber lasers in China. In 2018, Raycus Laser accounted for 17.3% of the domestic fiber laser market. The company went public in June 2018. In 2018, the company's total operating revenue was nearly 1.5 billion yuan, a year-on-year increase of 53.63%, making it the fastest-growing domestic laser listed company. Continuous fiber lasers accounted for 76% of operating revenue. While sales of medium and low-power products grew steadily, sales of high-power products grew rapidly. Significant growth in customers and sales was achieved for 3300 W products, with single-item sales doubling those of the previous year. 6 kW and 10 kW products achieved batch sales.

(4) United Prima Laser Equipment Co., Ltd. (Shanghai): A Sino-Italian joint venture formed by famous laser equipment manufacturers from China and Italy. After the joint venture, in just a few years, through high-density technological innovation, operating performance has climbed year by year, leading the domestic market in sales value, per capita productivity, and market share for four consecutive years. The domestic market share of high-power laser cutting machines exceeds 50%, becoming a leading enterprise in China's high-power laser cutting and welding equipment.

(5) Shenzhen Guangyunda (Shenzhen): As a listed company in the field of laser processing applications in China, Guangyunda has extensive experience and mature processes in precision laser processing. In 2018, it achieved operating revenue of 580 million yuan, a year-on-year increase of 13.04%, with no significant growth in PCB business. By industry, SMT still accounted for nearly half of the company's performance. It expanded into 3D printing and formed a joint venture with Photonics Industries of the United States to establish Fotoni Laser Technology Co., Ltd. in Dongguan, supplying nanosecond UV, green light, and picosecond laser products.

(6) Fujian Castech Inc. (Fuzhou): Castech is a large-scale enterprise in China engaged in R&D and production of laser crystals. In 2018, its total revenue was 490 million yuan, a year-on-year increase of 8.29%. Export operating revenue accounted for over 50%. The current US-China trade war and the depreciation of the RMB exchange rate in the past few months have negatively impacted Castech's operating environment.

(7) Chutian Laser Group Co., Ltd. (Wuhan): Established in 1993, Chutian Laser has become a large professional manufacturer and overall solution provider of laser medical beauty instruments in Asia, including high-power gas laser cutting machines, energy battery laser welding machines, and special laser welding machine series; laser treatment systems (urological laser treatment systems, skin care products laser/intense pulsed light treatment systems); and laser creative cultural products.

(8) United Winners Laser (Zhuhai): United Winners Laser is a leading enterprise in China specializing in laser welding. The majority of the company's performance comes from new energy equipment demand, making it the largest domestic enterprise in new energy laser processing equipment. United Winners Laser's performance grew from 266 million yuan in 2015 to 981 million yuan in 2018. The decline in growth in 2018 was mainly due to the reshuffle in the power battery industry.

(9) Del Laser (Wuhan): Del Laser is one of the representative enterprises in China engaged in laser precision processing. With excellent technology and equipment in the solar cell market segment, it has developed rapidly in the past three years and is a leading enterprise in solar cell laser equipment in China. In 2018, its operating revenue exceeded 300 million yuan. The company's PERC high-efficiency solar cell orders continued to grow, and the newly developed SE equipment also showed strong market demand and growth trends. It was listed on the Shenzhen Stock Exchange A-share market on May 18, 2019.

(10) Bond Laser (Jinan): Bond Laser is a rapidly rising cutting equipment enterprise in the past three years. In 2018, the company achieved operating revenue of 789 million yuan, a year-on-year increase of 68.98%.

(11) LYNGBO Optoelectronic Technology Co., Ltd. (Wuhan): Established in 2001, LYGNBO Optoelectronic Technology specializes in R&D and production of laser fine processing equipment and medical equipment for advanced 3C electronic product manufacturing, including laser stripping, laser soft soldering, laser micro-welding, laser curing, laser fine marking, fine cutting, and film removal.

(12) Huaray Laser (Wuhan): Huaray Laser focuses on small and medium-power solid-state lasers, green lasers, UV lasers, picosecond lasers, and femtosecond lasers.

(13) Anyang Laser (Xi'an): Anyang Laser's main products include supercontinuum light sources, supercontinuum lasers, picosecond fiber lasers, ultrafast pulsed fiber lasers, and all-solid-state lasers.