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Market Overview

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Terahertz radiation, also known as THz radiation, is a form of electromagnetic radiation that falls within the frequency range from the high-end of the microwave band to the lower end of the far-infrared region on the electromagnetic spectrum. It is measured in terahertz units, abbreviated as THz, which represents one trillion hertz. The frequency of terahertz radiation is indicative of the range that lies between infrared, ultraviolet, and visible radiation.

The market for terahertz technologies is expected to reach USD 1,758 million over the next five years, showing a compound annual growth rate (CAGR) of 23.14% during the forecast period, compared to its current value of USD 621 million. Terahertz technology is an emerging and rapidly growing field with the potential to develop applications in various areas, ranging from passenger scanning at airports to large-scale digital data transfers. Significant advancements have been made in the scientific community, further fueling the progress of terahertz technology.

The terahertz frequency range, which spans from 0.1 THz to 3 THz, represents the last unexplored portion of the electromagnetic wave spectrum. Due to the technological and commercial challenges associated with this frequency range, it is often referred to as the terahertz gap in literature. However, the terahertz frequency range holds great promise for many applications.

Terahertz radiation possesses three distinct properties that drive the development of the terahertz industry. One major advantage of terahertz waves, particularly those within the sub-terahertz frequency range of 0.1 THz to 0.3 THz, is that many materials that block visible and infrared spectra appear transparent in the terahertz region.

Terahertz technology has shown promising potential in various fields, including communication, security inspection, and biomedicine. In neuroscience, for example, terahertz technology has been utilized to differentiate between benign and malignant brain tumors.

However, a significant challenge to the widespread adoption of terahertz technology lies in the lack of knowledge and awareness surrounding this technology. While the research community has made significant progress in harnessing its potential and identifying key applications, there is a need for greater awareness, particularly in developing regions, to drive market growth.

The outbreak of COVID-19 has contributed to the significant growth of the terahertz technology market. Its applications in healthcare, biomedicine, and security have become particularly relevant during this time. The global pandemic has spurred intense research and development activities in the healthcare sector, leading to increased demand for technologies capable of detecting the virus, thereby augmenting the growth of the terahertz technology market.

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Market Segmentation

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The market is segmented based on various factors, including technology, end user, and region.

Segmentation by Technology
Terahertz Imaging Systems-Active System and Passive System
Terahertz Spectroscopy Systems-Time Domain and Frequency Domain
Communication Systems

Segmentation by End User
Healthcare
Defense and Security
Telecommunications
Industrial
Food and Agriculture
Laboratories
Others

Segmentation by Region
North America- United States and Canada
Europe- United Kingdom, Germany, France, Spain, and Rest of Europe
Asia-Pacific- China, Japan, India, South Korea, and Rest of Asia-Pacific
Latin America
Middle East and Africa

The Terahertz Imaging Systems segment was the largest market in terms of value, with USD 1,188 million in 2028, compared to USD 339 million in 2022. It is projected to have a compound annual growth rate (CAGR) of 23.46% during the forecast period. Within the Imaging Systems category, Active Systems held the largest market share in 2022.

Terahertz waves have the ability to pass through various conventional dielectric materials like clothes, cardboard boxes, and plastics. The low photon energy and non-ionizing properties of terahertz waves make them well-suited for safety inspections of the human body. As a result, the use of terahertz imaging technologies holds great promise in the security inspection sector, including stations, airports, and other public locations. Active imaging, which requires both a THz source and a detector, offers the highest sensitivity and provides more detailed information about the objects being screened. Active systems utilize terahertz sources to illuminate the object and detect the reflected or scattered THz radiation using a detection system based on the heterodyne principle. This imaging mode relies on the backscattered THz radiation from the object and the detected signals depend on the object’s reflectivity.

In 2022, Defense and Security accounted for the largest market share of 32.67% and is expected to reach USD 555 million in 2028. On the other hand, Telecommunications is projected to have the highest CAGR of 27.13% during the forecast period.

The ability to identify hidden weapons and explosives worn on the body is critical in today’s security environments. Terahertz technology has gained increased interest for security and defense-related applications due to its capability to detect and identify objects hidden behind barriers. For example, dangerous non-metallic substances such as ceramic knives or plastic explosives can be detected using terahertz beams at airports or other security-critical locations. This is possible because terahertz waves can pass through clothes but not through the upper skin due to its water content. Additionally, traditional metal detection and X-ray bag scanning processes are time-consuming and challenging to implement in high-traffic areas like public transportation hubs. Therefore, there is a need for technological solutions that can perform security checks from a distance. Terahertz technology enables scanning of multiple individuals without requiring them to stop, providing a solution to these challenges.

The development of a new device that produces stronger and more easily directed output than terahertz waves contributes to technological innovation and product development across various industries. It assists in the advancement of industries and societies that utilize terahertz wave technology. There are numerous military applications for terahertz sensors, such as intelligence, surveillance, and reconnaissance (ISR), including detecting individuals behind enemy lines, target identification, and precision weapons guidance. In non-combat scenarios, terahertz technology can aid in the detection of plastic or minimal metal landmines on current or former battlefields. Currently, landmine detection often relies on analyzing soil temperature in three dimensions and applying software algorithms, which can be cumbersome and yield limited confidence. Terahertz spectroscopic imaging presents a logical alternative to this approach, as it has the ability to detect almost any material with relatively high confidence under suitable conditions. Field programmable gate array (FPGA) technology is utilized in this detection technique.

In 2022, the North American region accounted for the largest market share of 47.01% and is expected to reach USD 795 million in 2028. The Asia Pacific region is projected to have the highest CAGR of 24.93% during the forecast period.

The United States is a crucial market for terahertz technologies due to increasing homeland security concerns, investments in defense and research and development (R&D). Furthermore, stringent government regulations regarding safety and production in the aerospace industry, as well as growth in the automotive and aerospace sectors, are driving the demand for terahertz technologies in the US market. According to data from the US Department of Commerce, the US aerospace industry contributed USD 118.5 billion to the American economy through export sales. Over the next 20 years, it is estimated that the number of large commercial planes will grow at a rate of 3.5% per year, reaching 34,000 units with a total value of around USD 4.5 trillion. This increased demand from the aircraft industry is a significant driver for the growth of inspection systems based on terahertz technology. The US aerospace industry exports more than 60% of its production.

Canada is also expected to experience significant growth in demand for terahertz technology due to increased requirements for security screening equipment in various public places. Canadian airlines, for instance, screen passengers before they board flights bound for the country. Additionally, Canadian innovators are focusing on developing a wide range of technologically advanced products for domestic and global markets, thereby shaping the future of the terahertz technologies market.

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Competitive Landscape

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Key Companies Profiled in this report include Luna Innovations, Teravil Ltd, TeraView Limited, Toptica Photonics AG, HÜBNER GmbH & Co. KG, Advantest Corporation, BATOP GmbH, Terasense GP Inc., Microtech Instrument Inc., Menlo Systems GmbH, Gentec Electro-optics Inc., Bakman Technologies LLC.

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Recent Industry Developments

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In February 2023, TeraView Limited entered into a partnership with ACE Solution, a renowned provider of tailored test solutions for electrical components, devices, and system manufacturers. The objective of this collaboration was to introduce the TZ6000, a non-destructive tool for measuring the quality of wafers in the compound semiconductor industry. The TZ6000 incorporates TeraView’s TeraPulse Lx Technologies, ensuring advanced capabilities and accuracy in wafer measurement.

In August 2022, Advantest Corporation successfully acquired CREA, a power semiconductor test system company based in Italy. This strategic acquisition aimed to enhance Advantest’s core business solution portfolio and position the company to take advantage of the future growth opportunities in the power semiconductor tester market. By joining forces with CREA, Advantest strengthens its position in the industry and gains access to valuable resources and expertise.

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Key Questions Answered

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