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Photonic technologies address new markets

04 May 2006

Delegates at last week's Photon Forum hear that key VC investments are being made in optical networking, biophotonics, photovoltaics, and displays and illumination.

The mood was optimistic at last week's Photon Forum event in Boston, US, -- and with good reason. Steve Eglash of Worldview Technology Partners, a venture capitalist firm based in Silicon Valley, said that VC funding for photonics companies grew by 17% in 2005 to reach $1.15 billion. At the same time, surviving start-ups from the telecoms bust have regrouped, and are now exploiting their novel optical technologies to develop products addressing a range of new markets.

One of the key trends identified by Eglash was a growing interest in the photovoltaic sector, which saw three of the largest IPOs in 2005 as well as a number of major VC investments (table 1). A near-term driver for investment in this market is the rocketing oil price, which is generating renewed interest in alternative energy sources. But Eglash contends that there is a clear long-term need for solar cells, with the total market predicted to double from $6 bn in 2006 to $12 bn in 2010.

Conventional solar cells based on monocrystalline silicon will continue to dominate the market over that timeframe, but Eglash believes that there is plenty of room for technical innovation. Indeed, most start-up companies are focusing their efforts on developing lighter, cheaper and more flexible solar-cell technologies. For example, Miasolé is exploiting a dual-magnetron sputtering technology originally developed for manufacturing hard disk drives to produce flexible solar cells made from thin films of copper-indium-gallium diselenide (CIGS).

Meanwhile, a number of other companies, including Konarka, Nanosolar and Orion Solar, are developing so-called dye-sensitive solar cells (DSCs), which exploit photochemical reactions in organic dye molecules to convert solar energy into electricity. DSCs are cheap and easy to produce, but more work is needed in materials and module design to improve the conversion efficiency of these devices.

Eglash also noted that VC funding is continuing to support small companies specializing in optical networking, although most of the investment is for later-stage financing rather than new start-ups. Most of the innovation in this sector has moved up the supply chain from components to the system and network levels, but some key photonic technologies are still being developed.

These include components that enable greater flexibility in the network, such as tunable lasers and reconfigurable optical add-drop multiplexers (ROADMs), although the market size for both types of device is likely to be fairly limited. Another key development area, which was highlighted by Fred Leonberger -- the former CTO of JDS Uniphase and now at the Massachusetts Institute of Technology -- lies in photonic integrated circuits, which promise to reduce the size and cost of transmission components while also delivering faster processing speeds.

According to Leonberger, a number of commercial devices already exploit some degree of integration. The most common are hybrid modules, which combine several components on the same substrate, for which key application areas include tunable lasers, ROADMs, modulators and low-cost transceivers for passive optical networks. A few companies are also pursuing monolithic integration of indium phosphide (InP) components on InP substrates, which delivers smaller sizes and reduced manufacturing costs but also limits design flexibility.

One the most ambitious examples is Infinera's optical platform for dense wavelength-division multiplexing, which incorporates an optical chip capable of processing data from 10 channels, each at a line rate of 10 Gbit/s. Infinera has also demonstrated an optical chip that can process 40 channels at 40 Gbit/s, yielding an overall capacity of 1.6 Tbit/s. While optical networks are unlikely to need that sort of capacity for at least a few years, this early demonstrator clearly shows the scalability than can be achieved with optical integration in InP.

However, Eglash cautioned that most component supply in the telecom sector has become commoditized, and opportunities are limited for optical device manufacturers aiming to sell innovative products at premium prices. As a result, some of the start-ups that originally developed photonic devices for the telecom market are now adapting their technologies for use in other markets. One of the most significant growth areas highlighted at the event was optical sensors for medical, industrial and military applications.

For example, Paul Larson, president of San Diego start-up Daylight Solutions, explained how his company has combined tunable lasers and packaging technology developed for telecom applications with advances in quantum cascade lasers to produce small, tunable laser sources operating in the mid-infrared. Most molecules show distinctive absorption signatures at these wavelengths, and portable instruments incorporating the miniaturized laser sources can be used to detect and identify small amounts of different molecular species.

The company's initial target application was homeland security, since the tunable laser system can detect the presence of explosive materials from a few feet away, and can also distinguish between different chemical weapons agents. But the company has seen more interest from the medical sector, where the technology can be used for non-invasive diagnosis and monitoring. In this case, the device is able to identify molecules in the breath that are known to be characteristic of particular medical conditions.

In a similar way, Axsun Technologies is now marketing a "spectral engine" that incorporates micromachined optical components within a package measuring just a few centimetres. According to Petro Kotidis, head of business development for the company, the laser source used in the engine offers tunability over a 300 nm range within the near-infrared part of the spectrum. When illuminated by radiation over this wavelength range, any substance yields a distinct spectral signature that can be used for quantitative chemical analysis.

Kotidis claims that the quality of information provided by the spectral engine matches that of conventional spectrometers, which are expensive, bulky, and must be used in a controlled laboratory environment. In contrast, the spectral engine can be used in portable instruments, with key applications including process monitoring for industrial and biotech manufacture, substance identification for security and military personnel in the field, and real-time monitoring of optical networks.

•   Photon Forum was held in Boston, Massachusetts, US on 25 - 26 April 2006.

Susan Curtis is Editor of Technology Tracking

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