Optical Instruments and Lenses

SIC 3827

Companies in this industry

Industry report:

This category covers establishments primarily engaged in manufacturing instruments and apparatus that measure an optical property and optically project, measure, or magnify an image, such as binoculars, microscopes, prisms, and lenses. Included are establishments primarily engaged in manufacturing optical sighting and fire control equipment. Establishments engaged in manufacturing contact lenses and eyeglass frames and lenses are classified under SIC 3851: Ophthalmic Goods.

Industry Snapshot

Companies in this industry manufacture a plethora of devices, including weapon-firing control mechanisms, optical laser-sighting systems, binoculars, borescopes, camera lenses, contour projection apparatus, gun sights, opera glasses, interferometers, microscopes, telescopes, periscopes, and spyglasses. Most devices in this industry use lenses. Some products, however, do not utilize lenses, such as rifle-aiming circles and some types of surveying equipment, which simply help users to align or measure objects. Electronic optical devices that do not use glass or plastic lenses, like the electron microscope, are classified elsewhere.

Long-term growth in the industry will depend on the ability of U.S. companies to continue to introduce new optical technologies and improve on existing ones, such as advanced laser optics, new liquid-crystal devices, and scanning equipment. The latter, used for business, home, security, and banking purposes, was one of the most promising areas for the optical industry. In the mid-2000s, increased military spending helped fuel spending on defense and weapons applications, and advances in digital cameras--especially cell phone cameras--drove the camera lenses sector. Total value of shipments increased throughout the 2000s, from $3.2 billion in 2005 to $4.8 billion in 2008.

Organization and Structure

The industry can be divided into two major product classes: approximately two-thirds of revenues came from companies manufacturing optical lenses and equipment (such as binoculars, camera and microscope lenses, and astronomical instruments), while the remaining segment of the industry produced optical sighting, tracking, and fire-control equipment. In the mid-2000s the optical sighting, tracking, and fire-control sector, much of which is used in missile systems, combat aircraft, and other defense applications, accounted for approximately 30 percent of all industry revenues.

Within the wide diversity of products offered in the optical lenses and equipment category, mounted and unmounted lenses (including photographic) accounted for approximately 24 percent of total shipment values in the mid-2000s; optical test and inspection equipment (including modulators, optical comparators, and interferometers), nine percent; prisms and mirrors, seven percent; lenses filters, four percent; binoculars, telescopes, and other astronomical equipment, four percent; and optical microscopes, one percent. Parts and accessories for all optical components and all other miscellaneous optical equipment each accounted for approximately 10 percent of total shipment values.

Most products in the industry use compound (more than one) lens systems. A series of several convex or concave lenses often is used to magnify light reflected from an image. Although a single convex lens theoretically will focus incoming light, such a system typically suffers from defects that cause blurring and distortion. Therefore, many lens systems, such as those in cameras, use eight or more lenses in series or cemented together to reduce aberration, coma (blurring), and distortion.

Lenses typically are manufactured from glass in a process called grinding. First, the glass is cast in blocks, strips, panes, and rods, or it may be molded into a rough lens form. Then it is cut and rough-ground using a diamond abrasive on a grinding wheel. Fine grinding is accomplished using a silicon carbide or emery abrasive. For fine optical instruments, final polishing may take several hours using a precise lapping tool. Finally, the edge of the lens is ground so that its axis is centered precisely. Sometimes the lens is coated with a substance that reduces distortion. In addition to glass, transparent plastics also are used for lenses. They are simply molded, rather than ground.

Background and Development

Modification of simple glass lenses has been practiced since ancient times, but the development of compound lens devices did not occur until 1600. That year, Dutch lensmaker Hans Jannsen and his son, Zacharias, mounted sliding lenses in a tube to form the first simple microscope. In 1611, a compound lens system that used a convex lens in the microscope's eyepiece was built by Johannes Kepler.

Historians often credit Hans Lippershey of Holland with inventing the telescope in 1608, when he accidentally aligned two lenses of opposite curvature and different focal length. The concept, however, may have been first understood in the thirteenth century by friar Roger Bacon. Galileo Galilei developed the first lens, or refracting, astronomical telescope in 1609. Christian Huygens improved Galileo's design soon afterward, with a telescope that reduced aberration. While these simple devices suffered a variety of defects, they achieved useful results.

During the remainder of the seventeenth century, compound optical instruments were vastly improved to increase magnifying power and reduce distortion. Important developments included Isaac Newton's design of a reflecting telescope that used mirrors to reduce aberration in 1668. Innovations during the eighteenth century largely reduced aberration and distortion in both telescopes and microscopes, resulting in apparatus that closely resembled the instruments commonly used during most of the twentieth century.

Early in the twentieth century, optical apparatus manufacturers focused on increasing power, or magnification. New lens manufacturing and mounting techniques allowed significant gains in this area. Conventional glass lens magnifying technology, however, was approaching its limit. Large refracting lenses suffered from distortion caused by sagging under their own weight. After World War II, scientists began searching for optical instruments that used alternatives to glass lenses, such as radio waves and magnetic lenses, to improve microscope and telescope devices.

In addition to the development of optical devices that did not use glass lenses, new types of optical devices emerged during the mid-1900s. Optical apparatus that could be used to control laser beams, for example, became an important industry offering. The creation of new electro-optical devices opened up entirely new markets in other industries. By the 1980s, electro-optical equipment was being used to analyze and control manufacturing processes, guide missiles, operate audio-visual systems, and perform many other functions. Optical interferometers, for example, were developed to measure wavelengths, and optical metallographs were created to study the structure of metals and their compounds.

According to the U.S. Census Bureau, there were more than 500 companies engaged in the manufacturing of optical instruments and lenses in the late 1990s. The industry employed approximately 22,100 workers and generated about $3.5 billion in shipments in 2000. By 2005, the number of establishments doing business in this industry had fallen to approximately 440, with a total of just more than 16,000 employees, primarily due to industry consolidation. Value of industry shipments, however, remained steady at $3.5 billion in 2006.

A significant increase in military-based industry expenditures came in the wake of the terrorist attacks of September 11, 2001, and the U.S. war with Iraq beginning in 2003. Subsequently, the industry was driven by both military and civil defense and security spending. In 2003, sighting, tracking, and fire-control equipment shipment values represented a 30 percent increase since 2000. Shipment values of unmounted lens increased by seven percent during 2003, but mounted lenses, suffering from the increased popularity of digital photography, declined by 10 percent.

Sales of digital cameras increased by 30 percent annually during the early 2000s. However, by the mid-2000s the market was reaching saturation. Whereas digital products were rapidly infiltrating the market, film-based camera sales were down, causing the overall camera industry to grow by just four percent during 2004 and remain flat during 2005.

Another trend in lens production during the 2000s was toward lens miniaturization as cell phone cameras became increasing popular in the United States. Industry experts had feared that cell phone sales would flatten, much like digital camera sales. However, cell phone users continued to upgrade. First-generation camera phones had a low pixel count; only low-quality images could be produced and the lens could be low quality. However, by the late 2000s, camera companies were offering camera phones of up to five to eight megapixels, which could produce photos similar in quality to a film-based camera. By 2010, Taiwan-based Altek had launched Leo, a smart phone that included a 14-megapixel camera. In these high-resolution cameras, optics were becoming increasingly important and miniaturization of complex lens components increasing complex.

Current Conditions

About 22,600 people worked in the $4.2 billion optical instruments and lenses manufacturing business. Whereas optical instruments and lenses (except othalmic), optical test and inspection equipment, and gun sights were the largest categories in terms of revenue, sectors such as spy, field, and opera glasses were small. California accounted for 46 percent of total sales. Following at a distance were Pennsylvania (10 percent), Illinois (six percent), New York (five percent), and Michigan (four percent). California also employed the most people in the industry, with 3,900. Massachusetts had 2,200 employees; New York, 2,000; New Hampshire, 1,600; and Pennsylvania, 1,300.

Industry Leaders

In the early 2010s, all industry leaders in the camera-based lens sector were located in Asia--primarily Japan, which was home to leading camera makers Canon Inc., Olympus Corp., and Nikon Corp. U.S. manufacturers in this industry included 3M Precision Optics, Inc., a subsidiary of 3M after the 2003 purchase of Corning Precision Lens. 3M Precision Optics had sales of $120.7 million in 2006. Major government contractors, including Raytheon Company ($24.8 billion in 2009 revenues) and Northrop Grumman Inc. ($33.7 billion in 2009 sales), accounted for much of the military-based expenditures. However, numerous smaller companies, including FLIR Systems Inc. of Portland, Oregon, which had 2009 sales of $1.1 billion, served as contractors and subcontractors.

Research and Technology

As the twentieth century drew to a close, several optical products appeared on the market, keeping industry leaders in keen competition. On the verge of widespread product application were "switchable optical elements" (SOEs)--new devices that combined diffractive structures with electro-optical components. Potential commercial applications of SOEs included reading glasses that changed magnification degrees electronically, windows that redirected sunlight to the ceiling for more diffuse room light, camera lenses that zoomed from wide-angle to telescopic without moving parts, and sunglasses with lenses that darkened with the flip of a small switch located in the frame.

Night-vision goggles continued to be an important product for the U.S. military, and ITT Corp. of White Plains, New York, remained the top supplier in the late 2000s and early 2010s. In 2009, the company was awarded a $9.13 million contract with the U.S. Army for delivery of AN/PVS-14 night-vision monocular devices. . According to the company, 80 percent of AN/PVS-14s went to the U.S. Air Force, with the remainder destined for use by the U.S. Army and U.S. Navy. ITT nabbed a $72 million contract the same year for its Aviator's Night Vision Imaging Systems (AN/AVS-6), used by U.S. Air Army pilots, and a $43 million contract for its Enhanced Night Vision Goggle (ENVG). ITT began testing its Digital Enhanced Night Vision Goggle (ENVG-D) in 2009, stating that the technology "replaces the standard image intensification tube with a new digital sensor, the MicroChannel Plate Complimentary Metal-Oxide Semiconductor (MCPCMOS)," which "provides outstanding image intensified video, enabling digital fusion with thermal infrared video."

On the forefront of telescopic technology was the linear tracking of stellar/heavenly bodies, replacing traditional tape encoders. In 1998 the first Heidenhain LIDA 105C exposed linear encoder was supplied to an 8m Gemini telescope on the top of Mauna Kea, Hawaii (Gemini North); the second was added later to another 8m Gemini in Cerro Pachon, Chile (Gemini South). Projects in the works in 2010 included the addition of two near-infrared spectographs and a Gemini Planet Imager (GPI). These systems allowed telescopes to pinpoint specific areas of the sky with extreme accuracy.

In efforts to miniaturize lenses for use in smaller camera devices such as cell phones, manufacturers invested in new technologies. In the mid-2000s, a new type of lens made of liquid was developed. The liquid lens functions as a droplet of water on an insulated surface to which an electric charge is applied--called electrowetting. Modification of the electrical charge can change the shape of the liquid lens, thus providing focus functions. French-based Varioptic contracted with phone maker Samsung of South Korea to develop liquid lenses in one of the first attempts to develop liquid lens. By 2010, liquid lenses were being used in a variety of applications. For example, in 2010, Microscan introduced the first barcode imager that used the technology.

Other miniaturization projects occurred in Germany at the Fraunhofer Institute for Applied Optics and Precision Engineering, where a lens using an array of light-sensitive diodes, similar to the structure of an insect's eye, was developed.

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