Auto applications spur IPG Photonics

09 Nov 2007

In a quarter that delivered record financial results, the fiber laser specialist took delivery of another new MBE reactor to increase diode production.

IPG Photonics, the US company that mass-manufactures GaAs-based laser diodes for use in its own fiber laser products, has posted a sharp increase in profit for the third quarter of 2007.

Headquartered in Oxford, Massachusetts, IPG earned $8.6 million on sales of $47.9 million in the three months to September 30, 2007.

Those numbers represent a 32 per cent year-on-year jump in sales revenue and an impressive 80 per cent hike in bottom-line performance.

The improving financial picture is largely a result of increased customer acceptance of high-power fiber lasers for material processing applications – a technology where IPG has pretty much cornered the available market.

As CFO Tim Mammen explained in a conference call with investors, the company has now taken delivery of the second of three new MBE reactors from Veeco that it has purchased to keep pace with diode manufacturing requirements.

Mammen also noted that IPG had added capacity for diode burn-in and packaging, which had both approached capacity limitations in the latest quarter.

"We're seeing increasing traction at automotive integrators, for welding applications such as fuel injectors, tailored blanks and mufflers," Mammen said.

The versatility of the fiber laser platform, which can easily be scaled to appropriate powers for different applications, means that there is also increased interest from customers involved heavy industry, the military, and solar panel production.

Cutting, welding and annealing applications in shipbuilding are beginning to take off, while at the upcoming "FABTECH" welding industry show in Chicago, one of IPG's partners is set to demonstrate a two-robot system that can both cut and weld using a single fiber laser source.

The investment in newer MBE equipment is also improving chip production yields at IPG's diode laser fab, which should further improve the company’s financial performance in the future.

IPG's CEO Valentin Gapontsev added that the company, which has its roots in Gapontsev's Russian homeland, was also benefiting from a recovering optical telecoms market.

In the latest quarter, IPG saw strong demand for its fiber amplifier products for dense-wavelength division multiplexing (DWDM) applications, particularly in Russia, where the local service provider North West Telecom is upgrading a 5000 km network.