Opportunities and Trends in Optoelectronic Manufacturing

The photonics and optoelectronics industry underwent dramatic changes following the telecom bubble collapse about a decade ago. Many companies struggled to survive, while others filed for bankruptcy. According to a report by the CATO Institute, close to 500,000 jobs were lost when the telecom bubble collapsed. A vast majority of the jobs lost in photonic manufacturing were in photonic packaging and assembly. Businesses that managed to stay afloat were subject to severe pricing pressures.

While end-user demand for bandwidth continues unabated, the gross margins for the photonics industry continue to pose business challenges—particularly in the communications sector. To remain competitive, the industry has responded by off-shoring the packaging and assembly of optoelectronic components to locations where the labor cost is lower.

The U.S. government has recently announced a string of manufacturing initiatives to facilitate development of advanced manufacturing technologies and to provide the impetus for job growth.

These new initiatives have the potential to translate into opportunities for the photonics community. For this reason, the Optoelectronics Industry Development Association (OIDA) organized a workshop earlier this year entitled, “Opportunities and Trends in Optoelectronic Manufacturing.” It was collocated in Los Angeles with the 2012 Optical Fiber Communications conference. The primary goal of this one-day event was to reflect upon the current state of photonics manufacturing and to discuss how to foster its development through government grants or public-private partnerships. Speakers represented all segments of the photonics industry, including large, medium and small companies, the government, academia and the financial community.