Industry Overview

Let There Be Light

Sergey Yermak Expert-Ural No.16 (597) April 14, 2014, 00:00
Photonics is one of the most challenging hi-tech niches for the Ural industry. A must of photonics competitiveness is manufacturing technologies meeting the highest international standards.
Expert-Ural, a magazine and analytical center, issues publications devoted to prospective markets for process industries. We gave a detailed description of the platform, principles and methods of our research last November (see Next Person, Please , Expert-Ural, No. 47 of 25.11.2013) and published a short summary of some market niches in December (Eat Pray Love, Expert-Ural, No. 1-2 of 23.12.2013). This year we are going to tell you about twelve most attractive and prospective markets: the first four articles will be dedicated to breakthrough technologies, the rest – to what is known as traditional markets. We started with additive manufacturing (see Print Me a Little 3D-Lamb, Expert-Ural, No. 7 of 10.02.2014) and developed the theme with carbon nanotubes (see Graphite Scroll , Expert-Ural, No.10 of 03.03.2014). Let’s get down to photonics.

A Golden Beam
Photonics is a large field comprising control technologies and signal processing technologies, based on photons emission, absorption or manipulation. Its range of application is wide: from fiber optic data transmission to power generation during laser fusion and creation of new sensors, modulating optical signals regarding the slightest environmental changes.
Academician Alexander Terenin introduced term ‘photonics’ in the early 60s. In the 80s the term came into common use owing to fiber optic application and at the end of the decade the term was approved by International Association Institute of Electrical and Electronics Engineers. For twenty more years photonics was mainly used in telecommunications, and in the early 2000s, it became widely spread in microelectronics, engineering, lighting, medicine, biochemical and environmental research. ‘It is hard to point out a sphere of human activity where these technologies could not be applied, starting from in-depth study and finishing with show business’ Anatoly Soldatov, Dean of the Faculty of Innovative Technologies from the Tomsk State University, writes in one of his articles. ‘Realization of photonics potential, aimed at technological development and economy modernization, can be compared to electrification which took place at the beginning of the last century.’
We will give you just a couple of examples. The first one is manufacturing Enlight256 optical processor by Lenslet in 2003 with a speed of response thousandfold exceeding electronic analogs (a record productivity has been reached with eight trillion operations per second with 8-bit numbers).
The second example is information transmission at one petabit (a billion of megabits) per second via 12-core optic fiber at 50 km distance. ‘One laser processing setup can substitute up to seventeen milling machines, - Victor Bespalov, Professor of the Saint Petersburg National Research University of Information Technologies, Mechanics and Optics, gives one more example. - Provided the initial cost is $300-500 thousand, the setup will be paid off (in case of the right exploitation) for a year or a year and a half and will bring profit in the amount of eight-ten rubles per one ruble invested. Moreover, such equipment considerably improves production culture and lower power consumption and consumption of materials.’
According to Photonik Branchenreport 2013 overview, provided by German Associations Spectaris, Verband Deutscher Maschinen- und Anlagenbau and Zentralverband Elektrotechnik- und Elektronikindustrie, the photonics world market volume rose by one and a half (from ?228 to ?350 billion) in 2005-2011. The figure is expected to amount to ?615 billion up to 2020, i.e. our niche will grow quicker than the global economy as a whole.
Two-thirds of the world photonics production is located in Asia. The absolute technological leaders are China and Japan (each country’s share is 21%).
The main fields of application (56% of the market) are displays, information technologies and photovoltaics (a method of power generation using photosensitive elements for converting solar radiation into current electricity).
Experts say that application potential of photonic technologies is unlocked only by 10-20% and their ties to other settors will strengthen every year. Photonik Branchenreport 2013 reports that by 2020 the most related sectors will be electric engineering, film making and machinery. But textile, oil & gas and food industries are likely to apply these technologies more than the others.
‘Though even today, for example, European photonics provides workplaces for 290,000 people, most of them work for 5,000 small enterprises. – says Victor Bespalov, - Photonics directly influences on 20-30% of the European economy and 10% of other working people (that is about 30 million workplaces).’
Code 21
Foreign specialists clearly realize the importance of photonics potential. That is why the EU established a special subdivision coordinating efforts aimed at photonics development and organized the European Technology Platform Photonics21. Before 2012 R&D in this field gained annual support equal to ?120 million. Moreover, the European Commission allocated money only upon terms of matched co-funding on the part of the business concerned. This approach seems right to us, since these technologies are in great demand.
The Horizon 2020 Strategy, comprising all hi-tech programs, was developed in the EU in 2012. The execution of the programme in 2013-2020 is to account for ?80 billion. Seven billion Euros is to be allocated for photonics development, private sector is to allocate ?5.6 billion, and the European Commission budget – ?1.4 billion respectively. It is to create from 70 to 100 thousand new workplaces in the industry and 350-600 thousand workplaces in the EU manufacturing industry in whole.
A special-purpose national programme is launched in China; as a result the overall production of lasers and optics annually increases by an average 25-30%. The Ministry of Science, ITC and Future Planning of South Korea annually allocates 30% of the total government budget for photonics development.
Statistical Discrepancy
Russia’s share in the world photonics production accounts for 0.06% (?220 million), in one of the largest sectors, lasers, it amounts to 0.2%, while domestic consumption of the products makes 95%. ‘Actually, Russia’s photonics lags behind international standards (just 20-25% of the developments, offered by domestic manufacturers of lasers and optics at home market, meet the average worldwide level’, writes Anatoly Soldatov.

We do not have enough data to estimate the volume of the Ural market, but it seems extremely small yet. However, we consider this niche very promising for manufacturing industry. Let’s put forward some arguments. First of all, in June 2013 the federal government approved the ‘road map’ for photonics development up to 2018. The objectives are to increase Russia’s output four-fivefold (40-50 million rubles per year); export not less than five-sixfold (up to 3-4 billion rubles per year); the number of hi-tech workplaces, occupied by photonics manufacturers and users up to sixty thousand (1.7 fold), the number of patents – twofold (up to 500 per year). Besides, we plan to develop the programmes, aimed at mastering the technologies for upgrading the economy in 50 regions of the country and increase the amount of extra-budgetary funds attracted into the industry (up to 17.5 billion rubles per year).
The document as such is not a key to successful development of the industry, but it serves as a declaration of the government’s intent. Photonics projects are likely to be supported.
Moreover, the Photonics Technological Platform is organized in Russia. We will not specify all the objectives but outline the most challenging directions. The first one is laser equipment for cutting, welding, marking, and modifying the surface of materials. The focus is logical, since laser machinery is one of the rapidly increasing segments of photonics. In addition, our country has a base for production of such equipment (over 250 items are produced at present).
‘Russia has a great capacity for some directions enabling it to occupy certain niches of the global market of laser equipment, say the Laser Association members. – For example, laser equipment with fiber-optics lasers and laser surface hardening. This stock is to be urgently disposed of.’
The second direction is laser-optic and optoelectronic equipment for medicine (ophthalmology, photodynamic therapy, dentistry, plastic surgery, capillary blood flow diagnosis, etc.). The third direction is fiber-optic communication devices (fiber optics, transmitters, radiator detectors, wavelength multiplex systems of DWDM channels with relevant software and control equipment). The fourth direction is LEDs and LED-based lighting systems. No wonder that manufacture of this equipment is rapidly growing in all developed countries owing to the necessity to lower power consumption. The fifth direction is laser and optic equipment for agriculture and veterinary medicine (biostimulation of plants, the use of low-level laser therapy in the prevention and treatment of cattle, fowl, and swine). The other directions are the following: devices for engineering measurements and diagnosis (including industrial process control systems and environmental monitoring systems); laser light sources; optic material; components and nodes; optical detectors and receivers, sensors.
Let us get down to the situation in the regions (it should be reminded that we analyzed a potential of breakthrough technologies in terms of the Sverdlovsk Region). The Middle Ural as well as the Ural in whole brings together a lot of prospects of photonics products (mainly, mechanical and power engineers). Also, these technologies have a great potential for export beyond the region.
The region can be proud of its research and educational complex comprising the Ural Federal University, RAS department and a number of R&D institutes in the field of metallurgic and engineering technologies, possessing the developments in laser and optic technologies.
One more thing is infrastructure. One of its key components is the Centre of High Technologies of Machine Building. In future we plan to found the Regional Engineering Center (REC) of Laser and Additive Technologies (additive technologies are to be developed at the second stage). The partner of the project will be one of the largest global manufacturers from Russia - IPG Photonics. According to our performance targets, REC is to obtain a hundred of patents, train over 600 graduates, carry out about fifty engineering projects and earn 225 million rubles by providing different services up to 2017.
Finally, production capacity. The Middle Ural hosts one of the country’s largest manufacturers of optoelectronics – Schwabe Holding (consisting of nineteen enterprises, including the Urals Optical and Mechanical Plant and NPK Optical Systems and Technologies, located in Yekaterinburg).
In fact, photonics (unlike carbon nanotubes) is much more developed market sector. Thousands of hi-tech, chiefly small companies, operate in this sector. Our niche is mature enough. The advantages here are a clear demand and willingness to receive innovations, the disadvantage is a high competence (especially, on the part of China).