According to a new report, Laser 2010, from market research company, Strategies Unlimited, the global market for lasers is expected to grow by $2.6 billion to $8.8 billion in 2014, representing a growth rate of 9 percent, which is more moderate than the average historical rate of 14 percent.

Fiber lasers fared best with only a 5 percent decline in 2009 to $280 million in sales. According to the report, IPG Photonics, a major supplier of fiber lasers, saw a decline in sales, but stands to gain recovery with its kilowatt-grade fiber lasers.

The recovery is aided by a turnaround in equipment for fabricating semiconductors and displays, and for communication equipment, as well as stable sales in lasers for biomedical instrumentation, and military and scientific lasers, said the report. The materials processing sector is expected see a slower recovery. Lasers for data storage are in for harder times, as the world turns more toward online sourcing and flash memory. The laser market will continue at a lower growth rate, with economic cycles playing a larger part than in the past.

Some segments of the laser market began declining in 2007, with the full force felt in early 2009. An upturn was evident in mid-2009 due to inventory depletion and pent-up demand, particularly in the semiconductor and telecom sectors. But, it continues to be a time of turmoil as the supply chain is shuffled. Credit remains tight for small and medium-sized businesses, and visibility remains poor.

The lion's share of laser industry revenue (87 percent) is concentrated in just three countries: the United States, Germany and Japan. While there are only 5 companies that earn over 50 percent of the industrial laser revenue – Coherent, IPG Photonics, Newport, Rofin-Sinar and Trumpf – the top 10 industrial laser suppliers lost some market share because of their high exposure to the machine tool market.

With tight credit and an uncertain economy, financial events among suppliers were limited to acquisitions of mostly small companies. Oclaro's merger and acquisition of Xtellus was an exception.

According to the report, the most promising new applications on the horizon are in the medical and consumer sectors – lasers for off-the-shelf hair removal and skin rejuvenation appliances, new touch-screen display sensors, Intel's LightPeak interface for consumer products, cataract and praesbyopia treatment, optically-assisted magnetic recording, and promising new laser technologies in the green and mid-infrared ranges.