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Outsourcing Optical Coatings: Uptick in Demand Anticipated

For decades, even the largest, most vertically integrated companies in the optics and photonics industry have outsourced their coatings. These market leaders recognize that coating is a unique and exacting science. Even more importantly, as a near-final step in the optical manufacturing process, optical coating is a high-risk process with real impact to the finished optical performance. Outsourcing optical coatings to a proven partner can reduce risk and increase margin.

Coating partners have helped companies meet the unprecedented demand in 2021 and 2022. As we head into 2023, the optics industry remains “cautiously optimistic.” Some forecasts suggest a slowdown to 4% overall growth.

If 2023 brings a slight reduction in demand, outsourcing can help to:

• Reduce cost per optic
• Replace capital investment in coating facilities
• Overcome the significant knowledge gap in coating science in a tight labor market

Offsetting the ‘world is crashing’ economic news, industries expecting significant growth can drive demand for catalog or prototype optics, yielding long-term opportunities:

Medical device: 80% of medtech executives list R&D of innovative products as top priority for 2023
Research: Federal funding for the US’s 43 federally funded research and development centers (FFRDCs) is expected to rise substantially, with the biggest jumps proposed for HHS (Health & Human Services), DOD (up 28%) and DOE (up 13%), as well as basic and applied research.
IIoT and Automation: Continued investment in Industry 4.0 will drive the need for optics, as companies invest in automation to fill a critical manufacturing workforce gap

The optics industry has always been a pioneering group of self-starters. While weighing new opportunities and broad economic outlook, the right supply chain partners help de-risk your growth. Penn Optical Coatings has been a trusted outsourced coating provider for over 40 years, helping the best-in-class match capacity to demand.



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