This market research report was originally published at the Yole Group’s website. It is reprinted here with the permission of the Yole Group.
In December 2022, Photonis, the French supplier of light intensification systems for defense applications, signed an agreement to acquire Xenics, the Belgian infrared camera manufacturer. With this acquisition, Photonis will diversify its technologies while acquiring new manufacturing capabilities and potentially new market access. Last but not least, the company now takes on a European dimension.
Yole Group has been covering imaging technologies and related applications and markets for some time. The company and its entities, Yole Intelligence and PISÉO, present their knowledge of this industry in a dedicated collection of products focused on SWIR technologies. These include SWIR Imaging, 2022 edition (2023 edition coming soon) and SWIR Light Sources – Product offer, technology and market structure analyses, as well as other imaging reports such as Thermal Imaging & Sensing.
Today, Yole Intelligence’s imaging team offers you a snapshot of the SWIR industry and makes the link with Xenics’ acquisition by Photonis. What is the status of the SWIR industry? What will be the impact of this acquisition on the market? What will be the next steps?… Analysts shine a spotlight on SWIR technologies and their applications and business opportunities.
Modern armies need multi-spectral imaging platforms combining different types of infrared sensors to have a tactical advantage on the battlefield. Thermal imaging (Long-wave Infrared, LWIR) is particularly suited for detection since heat signatures appear bright in these images. However, light intensifiers operating in near-infrared (NIR) or short-wave infrared (SWIR) cameras are better for identification since they provide more visible-like images. These devices are also used with laser illuminators for target designation and range finding.
Photonis already moved towards technology diversification with the acquisition of Device-Alab, a provider of thermal and SWIR compact camera cores, in 2021. The acquisition of Xenics reinforces this strategy and gives Photonis access to a broader range of know-how and capabilities.
Founded in 2000 as a spin-out of IMEC, Xenics is specialized in thermal and SWIR camera manufacturing. It has a vertical business model, from sensors and camera core manufacturing to complete cameras. In the SWIR range, Xenics is one of the few companies with the capability of making its own image sensor based on InGaAs technology. With this entity in its hands, Photonis becomes more vertically integrated, mastering camera, core, and now SWIR image sensor manufacturing. This is not only a means for Photonis to generate more value but also the opportunity to finely tune the sensors’ characteristics to attain better system performance.
Over the years, Xenics developed a broad product portfolio including both defense and industrially-oriented products like line-scan cameras and, more recently, 5 µm pixel pitch SWIR cameras as well as thermal camera cores. As part of Photonis, will Xenics focus more on defense-oriented solutions to match Photonis’s orientation? This acquisition is also an opportunity for Photonis to diversify its target markets, leveraging the existing footprint of Xenics in industry and benefitting from the revenues driven by this growing segment.
Whatever the underlying reason, this acquisition will allow Photonis to take full advantage of the growth of the SWIR market. In its last industry report, SWIR Imaging (2022 edition), Yole Intelligence evaluated the SWIR camera market at $317 million, driven mainly by defense and industrial applications. These segments may double by 2027, representing nearly $650 million, with the more significant growth coming from industrial applications. The defense segment will register steady growth within the new geopolitical context, including the war in Ukraine and tensions around Taiwan. Considering thermal imaging modality, Photonis now has the key to serving the thermal imaging market, which was nearly $6 billion in 2022 and is expected to register almost 4% annual growth until 2027 (Thermal Imaging and Sensing report, Yole Intelligence, 2022).
By acquiring Xenics, Photonis diversifies its technology portfolio to include thermal and SWIR imaging in addition to light intensifiers, which meet the needs of modern armies. It also acquires the vital capability of manufacturing SWIR image sensors and an entry into the industrial market with a wide range of existing products, thus potentially growing its market share.
The future will tell us which path Photonis and Xenics will eventually follow. Meanwhile, Yole Intelligence, is keeping an eye on the SWIR industry with the release of new technology, market, and performance analyses throughout 2023.
Stay tuned!
Axel Clouet, Ph.D.
Technology and Market Analyst forImaging and Display, Yole Intelligence
Eric Mounier, PhD.
Director of Market Research, Yole Intelligence
