Why Are Lasers Still So Expensive? The Volume–Cost Trap and Other Challenges in Photonics and Automation

Autonomous vehicles — not just cars, but also delivery robots, drones and potentially many other types — require suitable environmental sensing, and LIDAR is one of the most interesting options. Particularly over large distances — as required for cars, for example — LIDAR offers distinct advantages over competing technologies such as radar, cameras or ultrasound. So it is clear that LIDAR systems containing some kinds of lasers have a huge market potential.

However, the cost pressure is enormous: Mass adoption will not tolerate LIDAR units costing thousands of dollars, and even a few hundred dollars may be too high for many vehicle classes. The laser source can account for only a fraction of the total system cost, which also includes receivers, optics, scanning or beam-steering, electronics, software and qualification.

Smartphones have already created a mass market for VCSELs in face recognition and depth sensing. Similar emitters could spread into notebooks, tablets, smart-home devices, appliances, AR/VR headsets and human–machine interfaces. VCSELs are a useful example because they show that lasers can become high-volume semiconductor products when wafer-scale manufacturing, array architectures and consumer-electronics demand align.

Laser projectors are established in premium cinema and large events, but only in few consumer products. For smaller displays, they face strong competition from LED, OLED and microdisplay technologies, where mass production has progressed rapidly. Still, substantial volumes may arise in specific application areas if cost, speckle and safety issues are solved.

Cheap semiconductor lasers could enable large numbers of field sensors for gas detection, soil monitoring, greenhouse control, methane detection, water-quality monitoring and precision agriculture. And precision agriculture may become very important as a response to imminent problems with environmental effects and limited energy and material resources. Today, however, many laser-based systems are too expensive for dense deployment.

Near-eye displays could require compact RGB sources (with lasers or laser-like emitters) for projection, waveguide coupling or retinal scanning. The volumes could be vast if smart glasses become a mainstream consumer product. But the constraints are brutal: cost, efficiency, lifetime, eye safety, speckle, package size and thermal management.

AI data centers are driving enormous demand for optical links. Lasers are already essential in pluggable transceivers, and the next steps may involve co-packaged optics and silicon photonics. Depending on the architecture, this may multiply the number of laser sources or at least the number of laser-fed optical channels.

AI computing may become one of the largest indirect laser markets, although I think that some question marks are mandatory, as explained in a recent article.

Wireless power transfer via radio-frequency fields is practical over short distances and at moderate powers, but becomes inefficient or difficult over larger distances. Laser beams can transmit substantial power over longer distances with good directionality. However, this involves major challenges with laser safety, alignment and regulation. Even nominally “eye-safe” wavelengths do not permit arbitrarily high power levels.

This application field is more speculative, but potentially high volume if it ever becomes safe, efficient and regulated. Applications could include powering sensors, drones, remote cameras, warehouse devices or inaccessible electronics. The lasers together with related safety systems would need to become rather cheap.

Laser cleaning and various types of laser material processing are already well established and could spread far beyond premium applications if systems became cheaper and easier to integrate. The unit volumes may never be consumer-scale, but the total number of industrial systems could be large. The market is already expanding, but remains limited by source cost, system complexity, safety requirements, process development and service infrastructure.

Laser-driven nuclear fusion energy would require enormous volumes of lasers — not tiny consumer laser diodes, but high-power diode bars or diode stacks in combination with large solid-state lasers, or potentially excimer lasers. Power conversion efficiency is vital for achieving reasonable net energy gain, and component cost would need to be reduced enormously. A new production infrastructure for such components would probably have to be developed before the first commercial demonstration plants.

This creates a severe financing problem. As the prospects for laser fusion remain highly uncertain, laser manufacturers will hardly invest in such production capacity merely in the hope of later mass orders. Fusion companies or public programs would probably have to fund much of the supplier development and initial manufacturing scale-up.

Laser fusion is perhaps the most dramatic case of the volume–cost trap: It requires cheap high-volume laser manufacturing before there is a proven market. And even solving the laser cost issue would not guarantee success.

Laser diodes, being based on semiconductor technology, are the most obvious candidates for true mass production. Possible measures include:

• larger wafers and better epitaxial growth uniformity
• higher yield in facet passivation and coating
• automated die bonding, wire bonding and testing
• wafer-level or bar-level burn-in where possible
• standardized packages instead of custom mounts
• improved thermal packaging to allow higher output power per chip
• arrays and bars instead of many individually packaged emitters

VCSELs are a good positive example because they can be manufactured and tested more like semiconductor devices than many edge-emitting lasers. Their vertical emission is particularly suitable for wafer-level fabrication and testing, array operation and compact integration with optics and driver electronics.

High-power versions are still strongly affected by packaging, thermal management, facet reliability and burn-in cost. While the chips are semiconductor-like, the complete laser module often is not.

Bulk solid-state lasers can be expensive because of crystal growth, polishing, dielectric coatings, cooling, pump geometry and alignment. For high-energy systems, large aperture optics and laser gain media usually dominate cost, while low-power systems are more limited by assembly. Some cost-reduction paths:

• ceramic laser gain media instead of large single crystals (for high-power lasers)
• larger-area, lower-cost polishing and coating processes
• modular amplifier slabs or tiles
• standardized pump modules
• better thermal designs
• automated optical alignment, assembly and qualification
• relaxed specifications where the application permits it

Particularly low-power devices, including some ultrafast lasers, can benefit strongly from architectures where optical components are directly mounted, for example glued, on a base plate rather than held in complex adjustable opto-mechanics. Robots can then be used to position, align and fix components such as laser mirrors, laser crystals and fiber-coupling optics. The resulting devices can be compact, robust and much more suitable for volume production.

Due to component cost, such devices may still not be exactly cheap, but substantial progress on cost reduction can be expected, which can then drive further expansion of markets.

Fiber lasers and amplifiers became cheaper partly because they could reuse technologies developed for telecom. A positive point is that their laser gain media, i.e. rare-earth-doped fibers, can be fabricated in substantial quantities at moderate cost per laser. On the other hand, handling fiber ends, splices and pump combiners involves tight tolerances and is often not easy to automate.

Some cost-reduction paths are:

• standardized pump-combiner modules
• common fiber amplifier building blocks
• automated fiber splicing and packaging
• higher-brightness pump diodes reducing the number of components
• fewer free-space optics, ideally using all-fiber setups, although that is often difficult in practice

Note that fiber laser architectures vary quite a bit, ranging from simple distributed feedback lasers as narrow-linewidth lasers to complex fiber amplifier systems, also often containing a substantial number of bulk-optical elements. Therefore, general statements on the suitability of fiber laser technology usually make little sense.

Cost reduction for gas lasers and excimer lasers involves quite different aspects compared with semiconductor lasers and solid-state lasers. A positive aspect is that large gas volumes, as required for high powers and pulse energies, are easy to realize. So the component count can be small even at very high power levels. However, other cost factors are important: high-voltage discharge technology, gas circulation and purification, heat removal, electrode lifetime, contamination control, and the durability of windows and other optics.

For CO₂ lasers, decades of industrial use have led to mature and comparatively economical designs, particularly for sealed-off systems at moderate power levels. At high powers, however, the long wavelength, special optics, limited fiber-delivery options and cooling requirements remain significant constraints, while fiber lasers and disk lasers have taken over many metal-processing applications.

For excimer lasers, the direct generation of ultraviolet light is highly attractive, avoiding nonlinear frequency conversion. Their cost reduction is mainly a matter of improving efficiency, gas lifetime, electrode and window lifetime, reliability and service intervals. Therefore, cheaper excimer lasers would come less from simple scaling of production volume and more from reducing maintenance burden and making the discharge modules robust, standardized and long-lived.

In many applications, the customer does not buy a laser source, but a complete laser-based system. That system may include beam delivery, scanners, motion stages, process monitoring, safety enclosures, cooling, software and automation. Therefore, even a substantial reduction in laser source cost may have only a moderate effect on the total system cost.

This is important for many emerging markets. In LIDAR, the emitter is only one part of the sensor. In medical laser systems, regulatory approval, clinical validation and service may dominate the total cost. In laser material processing, the laser source may be only one part of a machine including robots, scanners, extraction systems and safety equipment. In laser fusion, even a radically cheaper laser driver would not remove the costs of targets, reaction chambers, tritium breeding and heat extraction; therefore, even radical cost reductions on the laser side would by far not guarantee commercial success.

A cheap laser is not cheap to use if it fails frequently. For industrial users, downtime can be far more expensive than the laser itself. For medical systems, reliability is tied to safety and certification. For power-plant concepts such as laser fusion, insufficient lifetime or excessive maintenance could destroy the entire economic case.

Reliability therefore has to be seen as a cost factor, not merely as a quality feature. Long lifetime, predictable degradation, easy service, built-in monitoring and short replacement times can be as important as the initial purchase price.

For real volume production, the laser usually needs to be redesigned. This may involve passive alignment instead of active alignment, fewer free-space optical elements, modular subassemblies, automated test stations, standardized interfaces and more tolerant optical layouts. The goal is not only to make the laser better, but to make it simpler and repeatable.

Another route to lower laser cost is to avoid unnecessary specifications. Various requirements can immediately exclude cheaper technological options. Therefore, laser applications should wherever possible be developed around cost-effective laser types, for example semiconductor lasers, rather than first defining ideal optical parameters and then discovering that only expensive sources can meet them.

Laser suppliers can add substantial value by helping customers identify which parameters really matter. A slightly broader linewidth, lower beam quality or more modest pulse specification may dramatically reduce cost while leaving the application performance unchanged.