The paper "Laser Technology in Photonic Applications for Space" by Denis Guilhot and Pol Ribes-Pleguezuelo highlights some of the problems of lasers in space:
In the specific case of laser diodes, the indium used to package the laser chip could represent a risk in case of extreme temperatures ranges due to the indium creep behaviour that can lead to fatal device failure [135]. Moreover, high vacuum regimes can even cause changes in the chemical and physical properties of components due to dehydration [137]. Another common issue for the laser crystals and fibers is the photodarkening effect produced in optical components due to radiation absorption. Many studies have been performed on the effects of several types of radiation on various laser materials with different doping ratios [138,139], which photonic space engineers should check in order to select the best candidates for their assemblies. This issue can be easily solved by improving the components shielding, however, the increased thickness caused by the extra layers of material protecting the components increases the weight of the integrated device, and frequently its size and cost. For that reason, the components must be carefully selected for optimum match with the mission radiation budgets to ensure that the laser output maintains the required specifications over the long operational period of the mission without incurring in unnecessary cost caused by extra shielding.
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Both reliability and cost factors are important requirements that often greatly affect the design choice, the former also affecting the efficiency trade that needs to be made in terms of de-rating for lifetime.
The paper "Development of the Laser Altimeter (LIDAR) for Hayabusa2" by Mizuno et al. describes how the laser altimeter on the SELENE lunar orbiter failed, because the Laser Diode (LD) deteriorated:
It is known that the LD in a high-power quasi-continuous wave laser will deteriorate with the number oscillations, thus decreasing output; generally speaking, an LD’s useful lifetime is about ($10^{9}$) shots. In the case of the LALT on SELENE, however, laser power began to rapidly decrease at about ($10^{7}$) shots in orbit, even though the laser power was maintained over ($10^{8}$) shots in preflight tests. We attributed this to deterioration of LD output
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We needed to cope with several problems related to the laser. Namely, (1) its vulnerability to temperature change, (2) its vulnerability to mechanical stress, and (3) degradation of the LD. [...] Regarding problem (3), degradation of the LD, we were unable to identify the exact cause of the degradation.
In general, laser diodes are affected by temperature changes and radiation. Annealing at a higher temperature can fix defects in the crystal, but it doesn't always work: (from the same paper)
However, in thermal vacuum tests of the laser module, the output power of the laser decreased when the laser temperature was decreased to 10 °C or less. We also found a fault in which laser output did not recover even after returning to room temperature, due to degradation of the extinction ratio of the Pockels cells
