Taiwan-based VCSEL (vertical cavity surface emitting laser) device providers, including Visual Photonics Epitaxy (VPEC), Epistar, Advanced Wirelss Semiconductor (AWSC) and Global Communication Semiconductors, are bracing for strong sales in 2018 as more and more smartphone vendors are incorporating 3D sensors into their new models for the coming year, according to industry sources.

Not only Taiwan-based firms but also international VCSEL chip providers such as Lumentum Holdings, Finisar, Princeton Optronics and Heptagon are likely to enhance their presence in the segment, said the sources.

Finisar is overhauling and also ramping up the capacity of its plant in Sherman, Texas, using an advance payment of US$390 million from Apple, indicated the sources, noting that the new capacity is expected to become available in the second half of 2018.

With the availability of the new VCSEL capacity from Finisar in addition to current supplies from Lumentum, Apple is expected to broaden the adoption of its TrueDepth 3D facial recognition technology beyond the iPhone X into other devices such as large-size iPad or enhancing its deployment in the AR sector, commented the sources.

More mobile and IT device providers are expected to follow Apple's steps to adopt VCSEL-based 3D sensor systems for their new gadgets in the coming years, said the sources.

The number of smartphones incorporated with VCSEL chips is likely to reach 240 million units in 2019, according to an industry estimate.

Furthermore, the global VCSEL market is expected to grow at a CAGR of 17.3% to reach US$3.12 billion by 2022 as a result of capacity ramps of related suppliers, said the sources, citing data from market research firms.