The demand for high-power lasers is growing and shows no signs of slowing down — but it takes a lot of effort to manufacture lasers that are not only high-power, but reliable.
That was the key takeaway from Vancouver-based nLIGHT’s presentation at the annual Needham Growth Conference in New York City this week, where chief financial officer Ran Bareket gave attendees a quick assessment of the company’s financials and market position.
The company was founded in 2000 and has grown by roughly 30 percent each year for the past four years, Bareket said, and has seen even stronger growth since going public in 2018. About 40 percent of the company’s business in 2018 came from fiber lasers, he said, which nLIGHT added to its product lineup in 2014.
Bareket identified two primary markets for nLIGHT’s traditional semiconductor lasers: microfabrication and aerospace defense. The lasers are also used internally, he said, to manufacture the newer line of fiber lasers, which are then sold to the industrial market for use in applications such as cutting, welding and additive manufacturing.
nLIGHT has two primary manufacturing sites that each employ roughly 500 people, according to Bareket: one in Vancouver and the other in Shanghai, as well as a third site in Finland for fiber lasers.
Bareket said nLIGHT’s vertical integration — its ability to fully manufacture its own lasers — is the key advantage that allows it to continue to grow, particularly in the high-power fiber laser market.
“There are only two companies that can claim they’re fully vertically integrated: IPG (Photonics) and us,” he said at the conference on Wednesday. “It’s extremely important from a technology perspective. To produce a high power — i.e., greater than 3 kilowatt — reliable fiber laser, you need to control your technology. And if you don’t, it’s going to be very difficult to produce a high-power fiber laser, and we’re seeing that in the market.”
Quality advantage
nLIGHT is developing increasingly powerful lasers in order to achieve a product portfolio that covers the entire power spectrum of the commercial laser market, which ranges from 500 watts up to 15 kilowatts, Bareket said. The company recently introduced a 10 kilowatt laser, and plans to follow up with 12 and 15 kilowatt laser models soon.
Higher-power lasers have a lower cost per watt to operate, he said, and there’s a growing demand for them, particularly in China due to its booming manufacturing sector.
“Eight kilowatts can cut almost everything that 15 kilowatts can cut,” he said. “However, 15 kilowatts can cut faster than 8 kilowatts, and when volume is important, 15 kilowatts is probably what you need. Outside of China, quality is more important than volume.”
However, nLIGHT doesn’t expect its near-term growth to be limited to the Chinese market, Bareket added, noting that the company grew by almost 50 percent outside of China in 2018. The market growth is also driven by newly implemented uses for lasers, he said, such as cleaning rust off of mechanical parts.
In response to an audience question, Bareket acknowledged that the company does face new emerging competition, particularly in China. However, he reiterated his assertion that nLIGHT’s vertically integrated status will give it a quality advantage that can’t be easily matched.
“It took us 18 years to get to where we are today,” he said. “It’s very hard to produce a 10 kilowatt laser that will consistently stay a 10 kilowatt laser.”
