Arasor holds on for laser TV take-off

23 May 2008

The Mitsubishi LaserVue could mark a turning point in the aspiring chipmaker’s fortunes, after optoelectronics supply deals in India put a big burden on its finances.

Australian optoelectronic company Arasor is continuing to refocus its business towards laser chip manufacture, despite losses forcing it into drastic cost cutting.

Arasor recorded a AUS$16.7 million ($15.6 million) loss on AUS$117 million revenue in 2007. Consequently at its 15 May AGM, the company said that it is "terminating" employees and consultants, closing down locations and exiting businesses to reverse this trend.

These moves are the latest results of a strategy that Arasor started in 2006 to expand upon its basic lithium niobate optics business.

The expansion has centered on an optoelectronics business that has been restricted to low-margin opportunities in Chinese and Indian wireless infrastructure. Limited profitability in this area has been worsened by a delay in the receipt of revenues from a customer in India.

Now the optics firm is increasingly pinning its hopes on laser displays, in advance of Mitsubishi Electric's US launch of its Laservue television, which is expected in the third quarter of 2008. "Laser beams provide the widest range of rich, complex colours, along with the most clarity and depth of field," Mitsubishi said in a statement.

Arasor has previously provided Mitsubishi's light engine suppliers with lasers made by Novalux, whose purchase Arasor completed on May 8. Former Novalux CEO William Mackenzie has replaced Simon Cao as CEO of Arasor, although Cao will remain executive chairman "to focus on global strategic initiatives".

The change of strategy is being aided by a AUS$1.5 million government grant to Arasor's Bandwidth Foundry subsidiary for the commercialisation of laser projection. Arasor says that the funds will help it make the most of the Novalux acquisition and its ongoing joint venture with ZTE International for laser displays.

That deal with the investment arm of the Chinese telecoms giant is aiming to establish a new company that will produce 6 million laser light sources and 2.6 million light engines annually by 2010.