IPG Photonics Stock

IPG Photonics Corporation (IPG) develops, manufactures, and sells high-performance fiber lasers, fiber amplifiers, and diode lasers that are used for diverse applications, primarily in materials processing.

The company’s portfolio of laser solutions is used in materials processing, medical and advanced applications. The company sells its products globally to original equipment manufacturers (‘OEMs’), system integrators and end users. The company markets its products internationally, primarily through its direct sales force. The company’s major manufacturing facilities are located in the United States and Germany. The company has sales service offices and applications laboratories worldwide.

The company is vertically integrated such that the company designs and manufactures most of the key components used in its finished products, from semiconductor diodes to optical fiber preforms, finished fiber lasers and amplifiers. The company manufactures complementary products used with its lasers, including optical delivery cables, fiber couplers, beam switches, optical processing heads, in-line sensors and chillers. The company offers laser-based and non-laser based systems for certain markets and applications. The company’s vertically integrated operations allow the company to reduce manufacturing costs, control quality, rapidly develop and integrate advanced products and protect its proprietary technology.

Products

The company designs and manufactures a broad range of high-performance fiber lasers and amplifiers. The company also makes direct diode lasers, packaged semiconductor diodes, laser and non-laser systems and communications components and systems. Many of the company’s products are designed to be used as general-purpose energy or light sources, making them useful in diverse applications and markets.

The company’s laser products are based on a common proprietary technology platform using many of the same core components, such as semiconductor diodes and specialty fibers, which the company configures to its customers' specifications. The company’s engineers and scientists work closely with OEMs, system integrators and end users to develop and customize the company’s products for their needs. Because of the company’s flexible and modular product architecture, the company offers products in different configurations according to the desired application, including modules, rack-mounted units and tabletop units. The company’s engineers and other technical experts work directly with the customer in the company’s application and development centers to develop and configure the optimal solution for such customer's requirements. The company also manufactures certain complementary products that are used with the company’s lasers, such as optical delivery cables, fiber couplers, beam switches, optical processing heads, process measuring and monitoring technologies and chillers.

Lasers

The company’s laser products include medium (1 to 999 watts) and high (1,000 watts and above) output power lasers from 0.3 to 5.2 microns in wavelength. These lasers may be CW, QCW or pulsed. The company’s pulsed line includes nanosecond, picosecond and femtosecond lasers. The company offers lasers with different gain mediums and wavelengths. The gain mediums are ytterbium, erbium and thulium, as well as Raman and hybrid fiber-solid state lasers using the company’s crystal technology. The company produces hybrid fiber-solid state lasers at green and ultraviolet wavelengths for a range of micro processing applications and in the mid-IR spectrum for sensing, imaging and spectroscopy applications. The company also sells fiber pigtailed packaged diodes as components for pumping applications, and fiber coupled direct diode laser systems that use semiconductor diodes rather than optical fibers as their gain medium. In addition, the company offers high-energy pulsed lasers, multi-wavelength lasers, tunable lasers, single-polarization and single-frequency lasers, as well as other versions of the company’s products.

The company produces the highest power solid-state lasers in the industry. The company’s ytterbium fiber lasers reach power levels of up to 125,000 watts. The company also makes single-mode and low-mode output ytterbium fiber lasers with power levels of up to 20,000 watts and single-mode, erbium and thulium fiber lasers with power levels of up to 4,000 watts.

Accessories

The company manufactures and sells accessories that include high power optical fiber delivery cables, fiber couplers, beam switches, chillers and scanners for its fiber lasers. The company is expanding its line of cutting and welding optical processing heads for use with the company’s fiber lasers and sell devices for in-line coherent monitoring for welding.

Systems

In addition to selling laser sources, the company offers integrated laser systems for particular geographic markets or custom-developed for a customer's manufacturing requirements. The company offers a LightWELD product line, which is a handheld laser welding system to provide fabricators a laser-based solution for welding. The company also offers 2D compact flat sheet cutter systems and multi-axis systems for fine welding, cutting and drilling. The company produces high precision laser systems for the medical device industry. The company also offers a welding seam stepper and picker, which is an automated fiber laser welding tool providing customers increased processing speeds, better quality and the elimination of certain clamping tools. The company’s subsidiary Genesis Systems Group, LLC provides laser and non-laser robotic welding and automation solutions. IPG also develops and sells specialized fiber laser systems for unique material processing applications as requested by customers desiring a complete laser-based solution, including orbital welding, pipe welding and remote welding. The platforms include robotic and multi-axis workstations for welding, cutting and cladding, flatbed cutting systems, and diode markers.

Markets

The company broadly classifies its principal end markets as material processing, medical procedures, advanced applications and communications. With the sale of sale of the company’s telecom transmission product lines in August 2022, the company no longer intend to target communications as a principal market.

Materials Processing

The most significant materials processing applications for fiber lasers are welding and brazing and cutting. Other applications include marking and engraving, cleaning, additive manufacturing, such as laser sintering and 3D printing, precision processing, drilling, heat treating, annealing and heating and drying.

Welding and Brazing Applications. Laser welding offers several important advantages compared to conventional welding technology as it is non-contact, precise, easy to automate, provides high process speed and results in narrow-seamed, high-quality welds that generally require little or no post-processing machining. The high beam quality of the company’s fiber lasers coupled with high CW power offer deep penetration welding as well as shallow conduction mode welding. Adjustable mode beam (AMB) lasers allow beam tunability for spatterless, precise high-quality welding required in electric vehicle battery manufacturing. In addition, fiber lasers enable remote welding ‘on the fly,’ a flexible method of three-dimensional welding in which the laser beam is positioned by a robot-guided scanner. Remote welding stations equipped with fiber lasers are used for welding door panels, seat backs, spot and lap welds over the entire auto body frame (‘body-in-white’) and tailor welded blanks for automotive applications. The company also offers a real-time weld monitoring system to determine weld quality in an integrated solution. The company’s LightWELD product line offers a handheld laser welding system that is easier to learn and operate than traditional solutions and offers high process consistency. The company’s products are used also for laser brazing of visible joints in automobiles, such as tailgates, roof joints and columns. Brazing is a method of joining sheet metal by using a melted filler material similar to soldering but requiring higher temperatures.

Cutting Applications. Laser-based cutting technology has several advantages compared to alternative technologies. Laser cutting is fast, flexible and highly precise and can be used to cut complex contours on flat, tubular or three-dimensional materials. The laser source can be programmed to process many different kinds of materials, such as steel, aluminum, brass, copper, glass, ceramic and plastic at various thicknesses. Laser cutting technology is a non-contact process that is easy to integrate into an automated production line and is not subject to wear of the cutting medium. The company sells mid and high power ytterbium fiber lasers for laser cutting. The company’s high power pulsed lasers are used in thin foil cutting applications in electric vehicle battery production. High electrical efficiency, low maintenance and operating cost, excellent beam quality, wide operating power range, power stability and small spot size are some of the qualities offered by IPG fiber lasers for many cutting applications, which enable customers to cut a variety of materials faster.

Medical Procedures

The company sells its commercial fiber and diode laser modules, subassemblies and complete systems to medical device manufacturers that incorporate the company’s products into their devices. The company’s ultrafast, CW and QCW ytterbium, erbium, thulium fiber and hybrid lasers with average power from 1 to 200 watts, and diode laser systems can be used in various medical and biomedical applications. The company has also developed and is selling medical laser systems and consumable fiber applications, including benign prostatic hyperplasia and lithotripsy, as an OEM and, in certain territories, as an IPG-branded product. Aesthetic applications addressed by IPG lasers include skin rejuvenation, hair removal, and treatment of pigmented and vascular lesions.

Advanced Applications

The company’s fiber lasers and amplifiers are utilized by commercial firms and by academic and government institutions worldwide for advanced and scientific applications. These markets may sell specialty products developed by the company or its commercial products. Representative applications include directed energy, spectroscopy, optical trapping, remote sensing, LIDAR and materials characterization.

Technology

The company’s products are based on its proprietary technology platform that the company has developed and refined since its formation. The following technologies are key elements in the company’s products.

Specialty Optical Fibers

The company has extensive expertise in the disciplines and techniques that form the basis for the multi-clad active and passive optical fibers used in the company’s products. The company’s large portfolio of specialty active and passive optical fibers has a number of advantages as compared to other commercially available optical fibers. Using the company’s knowledge of optical fibers, the company recently extended its product line by manufacturing fibers used as a consumable component with the company’s proprietary medical laser systems.

Semiconductor Diode Laser Processing and Packaging Technologies

The company uses multiple multi-mode, or broad area, single-emitter diodes rather than diode bars or stacks as a pump source. Multi-mode single-emitter diodes are the most efficient and reliable pumping source presently available, surpassing diode bars and stacks in efficiency, brightness and reliability. Single-emitter diodes have substantially reduced cooling requirements and typically have long lifetimes at high operating currents, compared to typical lifetimes of diode bars.

The company developed advanced molecular beam epitaxy techniques to grow alumina indium gallium arsenide wafers for the company’s diodes. This method yields high-quality optoelectronic material for low-defect density and high uniformity of optoelectronic parameters. In addition, the company has developed numerous proprietary wafer processes and testing and qualification procedures in order to create a high energy output in a reliable and high power diode. The company’s diode is packaged to dissipate heat produced by the diode and withstands vibration, shock, high temperature, humidity and other environmental conditions, enabling world-class reliability and efficiency of the products.

Specialty Components and Combining Techniques

The company developed a wide range of advanced optical components that are capable of handling high optical power levels and contribute to the superior performance, efficiency and reliability of the company’s products. In addition to fibers and diodes, the company’s optical component portfolio includes fiber gratings, couplers, isolators, combiners, and crystals. The company also developed special methods and expertise in splicing fibers together with low optical energy loss and on-line loss testing. The company’s internal development and manufacturing of key optical components allows the company to lower its manufacturing costs and improve product performance and reliability.

Side Pumping of Fibers and Fiber Block Technologies

The company’s technology platform allows the company to efficiently combine a large number of multi-mode single-emitter semiconductor diodes with its active optical fibers that are used in all of the company’s products. A key element of this technology is that the company pumps its fiber lasers through the cladding surrounding the active core. The company splices its specialty active optical fibers with other optical components and package them in a sealed box, which the company calls a fiber block. The fiber blocks are compact and are designed to eliminate the risk of contamination or misalignment due to mechanical vibrations and shocks, as well as temperature or humidity variations. The company’s design is scalable and modular, permitting the company to make products with high output power by coupling a large number of diodes with fiber blocks, which can be combined in parallel and serially.

High-Stress Testing

The company employs high-stress techniques in testing components and final products that help increase reliability and accelerate product development. For example, the company tests all of its diodes with high current and temperatures to identify and eliminate potentially unreliable diodes. The company also has built a large database of diode test results that allows the company to predict the estimated lifetime of the company’s diodes. This testing allows the company to eliminate defective diodes prior to further assembly and thus increase reliability.

Intellectual Property

IPG has used, registered or applied to register a number of trademark registrations in the United States and in other countries. As of December 31, 2023, the company had over 750 patents issued and over 400 pending patent applications worldwide.

Sales, Marketing and Support

The company markets its products internationally primarily through its direct sales force. The company’s direct sales force sells to end users, OEMs and systems integrators. Once the company’s fiber laser products are designed into an OEM system, the OEM's sales force markets its systems, allowing the company to leverage its sales capability through the OEM sales channels because the OEMs typically have several sales persons in locations other than where the company’s sales offices are located. The company has sales and service offices and application development centers in the Americas, Europe and Asia. To a lesser extent, the company markets through agreements with independent sales representatives and distributors, but the company does use such channels more widely for the company’s LightWELD product.

In 2023, the company entered into a strategic partnership with Miller Electric Mfg. LLC, a leading worldwide manufacturer of arc welding products, to further promote laser solutions for handheld welding applications. The company typically provides one to five-year parts and service warranties on lasers. Most of the company's sales offices provide support to customers in their respective geographic areas.

Customers

The company sells its products globally to OEMs, system integrators and end users in a wide range of diverse markets who have the in-house engineering capability to integrate the company’s products into their own systems. The company also sells complete laser and non-laser solutions to end users for their production needs. The company has thousands of customers worldwide. The company relies on a few customers for a significant portion of the company’s sales.

Competition

In the materials processing market, the company competes with makers of fiber lasers and other lasers, such as Coherent, Inc., Laserline GmbH, Lumentum Holdings Inc., Maxphotonics Co., Ltd., MKS Instruments, Inc., nLight, Inc., Trumpf GmbH + Co. KG and Wuhan Raycus Fiber Laser Technologies Co. Ltd.

Government Regulation

Regulatory Compliance

The majority of the company’s laser and amplifier products sold in the United States are classified as Class IV Laser Products under the applicable rules and regulations of the Center for Devices and Radiological Health (‘CDRH’) of the U.S. Food and Drug Administration (‘FDA’).

The company’s business activities are subject to various export controls and trade and economic sanctions laws and regulations, including, without limitation, the U.S. Commerce Department’s Export Administration Regulations, the U.S. Treasury Department’s Office of Foreign Assets Control’s trade and economic sanctions programs, the U.S. Department of State’s Nonproliferation Sanctions and International Traffic in Arms Regulations, as well as those of the European Community and Germany, which the company collectively refer to as Trade Controls.

Research and Development

The company incurred research and development costs of approximately $98.7 million for the year ended December 31, 2023.

History

IPG Photonics Corporation was founded in 1990. The company was incorporated in Delaware in 1998.