This article is part of our special report How the light gets in: Europe’s Photonics Landscape.

Europe’s well-established intellectual and scientific history in developing optical technologies has brought the continent to its current position as the second-highest global manufacturer of photonics equipment. With rapid development over recent years, the technology could help the EU to attain its political goal of technological sovereignty.

The EU’s industrial strategy published on Tuesday (11 March), highlighted the need for the bloc to achieve strategic autonomy across a number of sectors vital to driving the bloc’s single market. “Europe’s strategic autonomy is about reducing dependence on others for things we need the most: critical materials and technologies, food, infrastructure, security and other strategic areas,” the document read, adding that the future resilience of the bloc’s technological landscape depends on the EU’s ‘strategic digital infrastructures.’

To this end, a number of key technologies were outlined in the industrial strategy, which could provide European markets with the resilience to ensure that its dependence on extra-territorial players in the field is not too substantial. One such technology is photonics.

Recent studies have shown that it is not only Europe attempting to make headway in the photonics arena. By 2020, the South Korean government has plans to increase photonics investment by €2.8 billion per annum, while the Chinese, who currently sit in the number one spot as photonics manufacturers worldwide, have made commitments to up spending in the field to €1 billion this year.

Chinese dominance

However, China’s dominance in the field has been long in the making, particularly in the manufacturing of low-cost optical technologies such as light-emitting diodes (LEDs), using government subsidies and low-interest rates in a similar way to that which invigorated China’s solar and wind turbine markets.

But in the wider lighting marketplace, LEDs have gained in demand over recent years, due to their greater energy efficiency when compared with other lighting sources, using considerably less electricity than both incandescent and florescent light bulbs. Alongside state-supported investments into the LED industry as well as China’s recent efforts to go-green, the sector has remained relatively robust over recent years, despite the recent US trade tensions.

Moreover, on Monday (9 March), a subsidiary of China’s largest LED firm, Sanan Optoelectronics, announced that they would be expanding manufacturing services for the global optical market. Sanan Integrated Circuits, which provides equipment for microelectronics and photonics markets said that they plan to broaden operations to “provide the global optical market with large-scale foundry services” for lasers, arrays and other ranges of optical communications applications.

Along this axis, should any dumping attempts by foreign firms onto the European photonics market manifest, the resilience of firms on the continent would be tested. The 2017 insolvency of Europe’s largest solar manufacturer, SolarWorld, was a case in point, leading Milan Nitzschke, President of the the European solar association, EU ProSun, to take aim at aggressive Chinese trade practices.

“Anti-dumping measures introduced in 2013 have only been half-heartedly enforced for a long time, allowing further damage to the domestic industry. This situation is due to massive overcapacity in China and state-funded price dumping,” he said.

“Chinese state-owned banks have invested more than €100 billion in manufacturing capacities — more than 1.3 times the world’s total demand. In a market economy, this would be irrational. But, China is focused on winning dominance in one of the world’s most important future-oriented industries, at any cost.”

Not only dumping practices, but technology acquisitions emanating from China have also tested European resilience. From a political perspective, this is a challenging area for the EU to negotiate in attempting to mitigate the risks from stack-backed acquisitions of European private companies.

The ‘Big Three’ of France, Germany and the UK have historically been the largest recipients of Chinese investments, but other countries in the bloc, such as Sweden and Luxembourg, have started to become attractive to China as well.

A 2019 report published by the Rhodium Group (RHG) and the Mercator Institute for China Studies (MERICS) showed that Sweden received €3.4 billion in funding from China in 2018, while Luxembourg attracted €1.6 billion. In the technology domain, such figures had been expected, following Huachangda Intelligent Equipment’s 2017 acquisition of Sweden’s Robot System Products (RSP).

Such moves are strategic manifestations of several programs initiated by the Chinese state, including the Made in China 2025 project, which aims to turn “Chinese enterprises into world-class, globally competitive firms,” across industries such as robotics, electric cars, self-driving vehicles and artificial intelligence, according to President Xi.

Moreover, in a bid to counter reliance on semiconductor development firms around the world, China has established its own investment program, known as the China Integrated Circuit Industry Investment Fund or ‘Big Fund,’ to foster its home-grown ecosystem for chip and integrated circuit production.

Pilot Lines in Photonics

Responding to these challenges will be a litmus test of Europe’s ambitions to obtain technological sovereignty and strategic autonomy.

In the photonics field, at least, there have been a series of moves to encourage development in the production of the high-tech applications that could drive Europe’s quest for strategic autonomy.

The EU’s pilot lines project for photonics has borne a series of initiatives that aim to distinguish the technologies being developed here, with the aim of enabling “high-tech SMEs in Europe to take their good ideas, scale-them up and validate them with customers for commercial production.” Five additional lines were presented last year, with the help of €50 million of EU funding.

These include the Lyteus project, a technology which develops Organic Light-Emitting Diodes that are ‘large area, energy efficient light sources that are ultra-thin, flexible and lightweight’, and the MIRPHAB initiative, which develops miniaturised laser-based systems that can detect the presence of chemicals in gas and liquids.

Speaking at the recent Photonics West conference in San Francisco, CEO of Lightwave Logic, Michael Lebby, who has been closely involved in the process, drew attention to the importance of the EU’s Pilot Lines for Photonics project in ensuring competitiveness.

“Pilot lines takes advanced photonics technologies, and makes more of them. So we’re talking about an increasing number of prototypes and actually being able to help small and medium sized enterprises and tier one companies in providing a manufacturing vehicle for volume in photonics, in Europe.”

Whether or not Europe’s clout in the field of photonics technologies can be sustained at current levels to compete on a level-playing field with China, remains to be seen.

The Commission’s priority to obtain strategic autonomy is entirely dependent on the success and support for such mechanisms as the Pilot Lines initiative, which helps to foster the innovative technologies of the future that may one day be able to stand on their on two feet on the global marketplace.

For Lebby, the continent is only at the beginning of the opportunities that may come forth as part of a broader and more competitive photonics ecosystem. “Europe is gaining a lot of interest in photonics technology, which is really exciting,” he said.

(Edited by Benjamin Fox)