The photonics industry in Germany is fearful of a downturn in domestic orders this year, although the international outlook appears more optimistic despite geopolitical turmoil. Those are some of the main conclusions of the latest survey of the industry carried out by the VDMA’s working group covering lasers and laser systems for materials processing, as revealed at the start of the LASER World of Photonics trade show taking place this week in Munich, Germany.

Sven Breitung, the managing director of that working group, said during a press conference at the trade show that only 19 per cent of survey respondents now expected to record an increase in domestic orders this year, compared with 2024. Meanwhile 34 per cent said that they were anticipating a decline, with 47 per cent expecting no change. However for international exports, which represents a significantly larger chunk of the German photonics business, the outlook does appear a little more optimistic.

Breitung said that 41 per cent of survey respondents were expecting an increase in orders to international customers this year, with 22 per cent forecasting a decrease and 38 per cent anticipating no change. Overall, the industry is hopeful of an increase in sales turnover this year, with 44 per cent of those surveyed responding positively and 21 per cent fearing a decline.

“The economic situation in the laser industry is currently challenging - characterized by a reluctance to invest, geopolitical uncertainties, and weakening export markets,” Breitung remarked. “Although the first signs of stabilization are visible, a sustainable recovery is still a long way off.”

Noting that the VDMA’s survey was carried out before the outbreak in hostilities between Israel and Iran, Breitung also highlighted wider geopolitical risks that was ranked by survey respondents as the number-one challenge to business currently. Ranking second in that list of risks for the first time in the history of the VDMA survey is a solitary individual, in the form of the current US president.

Back ing up Breitung’s conclusions Wenko Süptitz from the Spectaris industry group cited figures suggesting that the German photonics industry was likely to grow by only around 3 per cent this year - below the historic average rate of about 6 per cent. That is expected to come from around a 2 per cent increase in exports, which account for approximately three-quarters of the German photonics industry’s €50 billion turnover, while domestic sales fall around 4 per cent.

Applications in defense and security, artificial intelligence (AI), quantum technology development, and clean energy remain key business drivers, but challenges remain in terms of bureaucracy, a long-term skills shortage, and supply-chain instability. And although laser and photonics companies will be keen to retain the skilled employees they currently have some job losses look to be inevitable, following recent local media reports that Trumpf was set to lay off as many as 1000 workers.

Breitung said that the VDMA was actively supporting the laser industry by lobbying politicians in Berlin and beyond for more business-friendly conditions, concluding: “Only through coordinated interaction between the industry, the VDMA, and politicians can the laser industry be put back on a sustainable growth path.”

Following the VDMA and Spectaris outlooks, representatives from key players Coherent, Trumpf, and Laserline highlighted some of the growth opportunities they see, with AI, nuclear waste management, optical transceiver demand, and the enormous future potential of laser fusion all getting a mention.

LASER 2025: German photonics industry fears domestic downturn

The German photonics industry faces concerns over a potential domestic downturn in orders, with only 19% of surveyed companies expecting growth, while international exports show more optimism. Geopolitical tensions and economic challenges are highlighted, with key drivers including AI, defense, and clean energy. The VDMA and Spectaris warn of slower growth, while companies like Coherent and Trumpf highlight opportunities in emerging technologies.