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A Billion Dollar Bidding War for Coherent Illuminates the Need for Photonics

February 18, 2021 by Jake Hertz

Coherent is stirring up a major bidding war reaching over $6.4 billion as companies clamor for the photonics leader. One of the recent happenings both on Wall Street and in the technological world has been the intense bidding war for photonics company Coherent. Bids have come in from II-VI, Lumentum, and MKS Instruments with offers now reaching$6.4 billion

Coherent’s stock price has risen meteorically as bids have rolled in. Image used courtesy of Bloomberg and Yahoo Finance

Clearly, these companies see immense value in the work Coherent is doing, placing a high value on the field of photonics both now and for the future. In this article, we’ll explore what makes Coherent—and photonics by extension—a desirable investment from both a market and design perspective.

Why Coherent?

With plenty of optoelectronic and photonics companies out there, one might wonder what it is about Coherent that makes it so valuable.

Founded in 1966, Coherent offers hundreds of laser products serving applications including those in the medical field, scientific measurement, materials processing, manufacturing, microelectronics, and many others. What sets Coherent apart, however, is the key role it plays in the rising OLED market.

More specifically, Coherent's products play a fundamental part in OLED manufacturing: excimer laser annealing

The Rise of OLED

While the organic light-emitting diode (OLED) display market hovered around 27,500 million USD in 2018, that value is projected to rise to 118,400 million USD by 2025.

AAC contributor Daniel Kramback explains that an OLED is a flat technology composed of a series of thin organic films between two conductors. OLEDs offer many advantages over conventional LCDs, including immunity from motion lag, lower power consumption (because it doesn't need a backlight), and thinner and lighter form factors—allowing for more flexible displays.

Structure of an OLED. Image used courtesy of Universal Display Corporation

Because of these design characteristics, OLEDs have found use in curved display panels, smartwatch faces, televisions, and smartphone displays.

What Is Excimer Laser Annealing?

A crucial component in all OLED displays is a glass backplane, consisting of many thin-film transistors on a silicon substrate.

Unlike traditional IC manufacturing, the silicon substrate in OLED displays requires the silicon to be deposited onto the glass using either low-pressure or plasma-enhanced chemical vapor deposition. The result of either method is a layer of amorphous silicon (a-Si).

While this layer is necessary to manufacture OLED displays, a-Si comes with a serious drawback: it features very poor electron mobility (~0.5 cm2/Vs), significantly limiting the performance of OLED displays.

Excimer laser annealing converts a-Si to poly-Si. Image used courtesy of Industrial Laser Solutions

One alternative OLED manufacturers have turned to is excimer laser annealing, a process in which a-Si is treated by lasers to become polycrystalline silicon (poly-Si). Poly-Si has a much greater electron mobility (50-250 cm2/Vs) than a-Si, meaning higher electrical efficiencies and better performance.

Where Coherent Stands on the Three Offers

This immense bidding war reflects the rising demand for photonics innovation—both at the design and manufacturing stages. As a so-called leader in excimer laser annealing, Coherent has attracted intense interest as the OLED market continually grows.

Diagram of the effects of excimer laser annealing. Image used courtesy of Coherent

While Lumentum Holdings and MKS Instruments were the first to bid on Coherent, the photonics company says it is currently in talks with II-VI with a proposal of 1.3055 shares of II-VI common stock on the table. The company has not yet come to a final decision on any of the three offers.