IPG PHOTONICS ENTERS MERCHANT DIODE BUSINESS WITH BRIGHTEST, MOST POWERFUL LINE OF LASER DIODES

IPG Offers its Compact, 20W Fiber-Coupled Laser Diodes to OEMs for Printing, Medical, Dental, Industrial and Telecom Applications

OXFORD, MA., January 18, 2007 - IPG Photonics (NASDAQ: IPGP), the leading global manufacturer of high-power lasers and amplifiers for diverse applications in numerous markets, today announced that it is now selling the most powerful and highest brightness fiber-coupled   laser diodes on a merchant basis to OEM customers in a variety of industries.  Taking advantage of IPG's high volume production capacity and industry-leading quality control, IPG's laser diodes provide over 20 watts of ultra-reliable output power in a compact size, allowing original equipment manufacturers to lower their cost per watt and increase equipment lifetimes.

The company's packaged diode lasers can be used in a broad range of applications, including printing, medical, dental, industrial and laser pumping, telecommunications and defense. 

"We have developed and manufactured the world's finest diodes for use in our line of industrial fiber lasers," said Bill Shiner, IPG's Vice President-Industrial Markets.  "Now we are offering this same technology to OEMs for their applications.  Customers can benefit from our diode's unique high-power and performance at a lower cost-per-watt by leveraging IPG's high production volume and unequalled production capabilities.  With higher powers available, our PLD Series provides OEMs an alternative to low-power single emitters and inefficient diode bars with short lifecycles."

"The sale of diode lasers is a natural extension of our product line," said Dr. Valentin P. Gapontsev, IPG Photonics' Chief Executive Officer.  "IPG has sold diode laser systems for years and has recently sold a small number of diode lasers for a dental application.  With our three new multi-wafer MBE reactors put into production last year, expanded test station capacity up to 60,000 channels and higher yields, this is the ideal time to introduce the many advantages of IPG's unique and cost-effective diode lasers into the market."

Key features of IPG's packaged diode lasers include:

• Highest power available in a compact package (up to 20 watts or more).
• Highest brightness from a 100 micron (µm) fiber at 0.11 numerical aperture (NA), that is lowest in the industry.
• Superior electrical efficiency with 60% or greater in-fiber power efficiency from electrical to optical.
• Expanded wavelengths at 9XX nanometers (nm) allowing customers to select the optimal wavelength.
• Smallest and most efficient package, accommodating smaller devices or higher output devices because they take up less space.
• High reliability from telecom-grade single emitters that are put through the industry's most rigorous test program.
  
• Short delivery times.

IPG will display its laser diodes at booth 1119 at SPIE's Photonics West 2008, January 22-24 at the San Jose Convention Center, San Jose, California.

About IPG Photonics

IPG Photonics is the leading global manufacturer of high-performance fiber lasers and amplifiers for diverse applications in numerous markets, such as materials processing, communications, medical, and scientific and research.  Founded in 1990, IPG Photonics pioneered the development and commercialization of optical fiber-based lasers, a new generation of optical sources that combine the advantages of semiconductor diodes with the high amplification and precise beam qualities of specialty optical fibers.  Fiber lasers deliver superior performance, reliability and usability at a lower total cost of ownership compared with conventional lasers, allowing end-users to increase productivity and lower operating costs.  IPG has its headquarters in Oxford, Massachusetts, and has additional plants and offices throughout the world.  For more information, please visit www.ipgphotonics.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  These forward-looking statements represent IPG's current expectations and beliefs.  The forward-looking statements, which include those relating to the Company's entry into the merchant diode business, are subject to certain risks and uncertainties that could cause the actual results, performance or achievements to be materially different from those expressed, expected or implied by the forward-looking statements.  These risks and uncertainties are described in IPG's filings with the Securities and Exchange Commission.  IPG does not undertake to update forward-looking information contained herein or elsewhere to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking information.  You should not rely upon forward-looking statements as predictions of future events.  IPG cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur, nor does the Company undertake any obligation to update any forward-looking statements for any reason after the date of this press release.

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PR 2008-002