IPG strengthens IP protection as sales soar

04 Mar 2008

Revenues and income have reached record levels for the supplier of high-power fibre lasers, which has also purchased an extensive portfolio of patents from BT.

“High-power lasers in advanced applications are the key growth driver.”

Fourth-quarter revenues for IPG Photonics reached $55.1 million, a rise of 31% on the equivalent quarter in 2006, while full-year revenues rose by a similar amount to $188.7 million. As in previous quarters, growth was driven by sales of fibre lasers used for materials processing applications, which rose by 37% in Q4 to be worth $39.4 million. Net income for the year was up slightly to $29.9 million.

"The results show the traction that IPG lasers continue to experience," commented Tim Mannen, the company's chief financial officer, in a conference call. "Fibre lasers are the preferred laser for certain applications, and that momentum will continue building."

"High-power lasers in advanced applications are the key growth driver," said Valentin Gapontsev, chief executive officer and founder. "Materials processing applications contributed some 70% of the total Q4 revenues, with applications in general manufacturing, heavy industry and the solar sector."

One example of such market penetration is in the automotive sector, where Hyundai have started to use IPG lasers in the production line for the new Genesis model. "We are also making good progress with other automotive manufacturers, especially in Japan," commented Gapontsev.

To feed this growth, the company is continuing to ramp up production capacity for fibres, chip production and chip qualification, although the end of this process is now in sight. "2008 will see the conclusion of this expansion phase, with investment in new capacity dropping away after the second quarter." said Mannen.

Negative factors affecting the company were said to be continuing economic uncertainty in the US and seasonal light sales in Russia. Additional problems existed in Japan, where Mannen acknowledged that weaknesses in IPG's local sales systems had been addressed through personnel changes.

• IPG also announced that it has purchased a portfolio of more than 100 photonics patents from British Telecom. Covering pioneering research in photonics dating back to the 1990s, the patents are in the fields of optical fibre lasers and amplifiers, semiconductor devices, integrated optics, fibre gratings, high-speed systems and optical networking. Further details were not disclosed, although Gapontsev commented that early patents covering singlemode lasers were of particular note to IPG.

"These patents cover pioneering work by BT which is no longer relevant to their business, and with this purchase IPG's intellectual property portfolio is unparalleled in the fibre laser field," said Gapontsev, who also indicated that the acquired patents would help IPG defend itself against any forthcoming litigation in relation to the company's products.