Optical Coatings Industry is Expanding at 5.6% Growth By 2032

The global optical coatings industry revenue was valued at USD 2.44 billion in 2022 and it is expected to attain around USD 201.1 billion by 2032 with a CAGR of 5.6% between 2023 and 2032.

The optical coatings industry growth is driven by the growing demand from the electronics and semiconductor industry, increasing demand for anti-reflective coating, and increasing demand for automotive electronics.

An optical coating is produced by combining several thin film layers to create interference effects that enhance an optical device's transmission or reflection properties. The effectiveness of an optical coating is influenced by the number of layers, the height of each layer, and the difference in refractive indices at the layer surfaces. The four most common coating types used on precision lenses are beamsplitter, anti-reflection (AR), high reflective (mirror), and filter.

Regional Snapshot:

Asia Pacific is expected to dominate the industry during the forecast period. The rapid growth of the electronic and automobile industries, whose advanced usefulness heavily depends on optical coatings. For instance, In its recently published second volume of the Vision document on electronics manufacturing in India, the Ministry of Electronics & Information Technology predicted that the electronics manufacturing sector would increase from its present US$ 75 billion in 2020–21 to US$ 300 billion in 2025–26.

The major products that are expected to drive growth in India's electronics manufacturing are electronic components, LED illumination, strategic electronics, printed circuit board assembly (PCBA), consumer electronics (TV and audio), industrial electronics, car electronics, consumer electronics (mobile phones), IT hardware (laptops, tablets), consumer electronics (TV and audio), and telecom equipment. From its present level of US$ 30 billion, mobile manufacturing is predicted to reach US$ 100 billion in annual output development or about 40% of the industry's growth. Moreover, with the rising populations, growing disposable income, and expanding industrialization, developing countries like China and India are anticipated to drive industry growth. Thus, this is expected to support the industry expansion over the forecast period.

North America accounted for the largest revenue share over the forecast period. The growth in the region is attributed to the growing demand from numerous industries including defense, aerospace and healthcare. This region's industry revenue development is also attributed to the government's adoption of energy-saving policies and initiatives that promote the use of advanced technologies across various sectors. Additionally, due to the growing tendency of incorporating advanced technologies like AI and IoT.

Europe is expected to grow at a significant rate over the forecast period owing to the constant demand from various sectors such as electronics, automotive and others. The demand for optical coatings in this region is being driven by the growth of the automobile industry, which makes use of optical coatings for advanced safety features like lane departure alerts and ADAS. The demand for these products is anticipated to increase in the healthcare sector because they are used in numerous devices.

Optical Coatings Industry Report Scope:

Report Highlights:

• By product, the anti-reflective segment is expected to dominate the industry over the forecast period. Anti-reflective coatings, also known as thin-film optical coatings, are made up of several layers with various refractive indices between each layer. Each layer's thickness is planned to offer a self-extinguishing interference for the light stream that is mirrored by the outer. As a result, this characteristic of the product makes it appropriate for spectacles, magnifying lenses, display screens, and camera lenses. The industry is expected to expand throughout the study's duration as a result of rising demand for anti-reflective optical coatings, particularly for the manufacture of vehicle displays, GPS, solar panels and others. Besides, the conductive coating product is expected to grow at the highest CAGR during the forecast period. The growth in this segment is owing to its usage of solar panels.
• By application, the consumer electronic segment is projected to grow at the highest rate over the forecast period. The demand for smartphones is expected to increase rapidly in the future, and this demand is expected to be fueled by customers' increasing disposable income. Additionally, it is predicted that ongoing technical developments in smart consumer electronics and smart TVs, including smartphones and wearables, will favorably impact industry growth.

Industry Dynamics:

Drivers:

Growing demand from the solar industry

The solar power industry is currently getting a lot of traction worldwide owing to the growing worldwide awareness of renewable energy sources. The demand for optical coatings is being fueled by the expansion of solar capacity installations across the globe. Optical coatings are frequently used to cover solar panels for dispersion and other functions. The total solar power in the US grew at a rate of 24.62% to 97275.5 megawatts of direct current in 2020 from 78054.4 megawatts of direct current in 2019, according to the Solar Energy Industries Association.

Similarly, the overall built capacity of wind energy in India was 37739.45 megawatts in 2020, up 5.94% from 35621.67 megawatts in 2019, according to the Ministry of New and Renewable Energy of the Indian Government. Thus, the growing demand for renewable sources of energy across the globe is expected to flourish the growth of the industry during the forecast period.

Restraint:

Fluctuation in the price of raw materials

Numerous basic materials, including oxides (selenium, aluminium, titanium, and zirconium), metals (copper, gold, and silver), and fluorides, are used in the production of refractive coatings (magnesium, calcium and strontium). The price changes of metals and oxides like gold, titanium dioxide, indium, copper, and silver are significantly impacted by the extremely fluctuating and unpredictability of the raw materials used in the optical coatings industry.

The cost of making optical coatings is negatively impacted by the rising cost of primary materials, particularly metals and oxides, which are subject to extreme price fluctuations. One of the essential basic chemicals used to create clear optical coatings is indium. For instance, Trading Economics estimates that the cost of indium has grown by 42.86% since the start of 2021 and by 23.64% from 2020.

Opportunities:

Growing automotive industry

The growing automotive sector is expected to provide a lucrative opportunity for industry growth during the forecast period. For instance, according to the Society of Indian Automobile Manufacturers, from April 2021 to March 2022, the automotive sector produced a total of 22,933,230 vehicles, including passenger cars, commercial trucks, three-wheelers, two-wheelers, and quadricycles, compared to 22,655,609 units from April 2020 to March 2021. Moreover, the consumer demand for cutting-edge technologies in automobiles further propels the industry expansion over the projected timeframe.

Recent Developments: 

• In November 2022, SDC Technologies, Inc. (SDC), the renowned worldwide pioneer in specialty coating solutions, acquired Coburn Technologies, Inc. Through this acquisition, the company strengthen their sophisticated lens processing technologies, an array of luxury coatings, and automatic coating machinery.
• In September 2022, the newly founded US company NBD Nanotechnologies Inc., which specializes in creating surface qualities like plastic repellency or optical films for displays, was acquired by Henkel. With this acquisition, Henkel expects to strengthen the position of its Adhesive Technologies business unit in the functional coatings industry.
• In September 2021, Optics Balzers AG, a industry pioneer in thin film optical coatings, was purchased by Materion Corporation. This purchase greatly broadens Materion's geographic reach beyond its center of North America to include Europe and Asia, hastening its transition into a worldwide supplier of advanced materials solutions.

Major Key Players:

• Cascade Optical Corporation
• Alluxa, Inc.
• Chroma Technology Corp.
• Optical Coatings Japan
• Berliner Glas
• Inrad Optics
• PPG Industries Inc.
• Schott Ag
• Viavi Solutions Inc.
• Abrisa Technologies

Market Segmentation:

By Product

• Reflective Coatings
• Anti-reflective Coatings
• Filter Coatings
• Electrochromic Coatings
• Conductive Coatings
• Others

By Application

• Solar
• Consumer Electronics
• Telecommunication
• Architecture
• Medical
• Automotive
• Aerospace & Defense
• Others

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