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Toptica tailors diodes for science and industry

17 Jun 2002

Since emerging from parent company TuiLaser in 1998, Toptica Photonics has grown from a tiny start-up to a firm with 45 employees. Michael Hatcher visited Munich to discover how the company with two presidents has always stayed in the black.

From Opto & Laser Europe November 2001

On the outskirts of Germany's Bavarian capital Munich, in a small block within a business park, two employees share an office. Not exactly an unusual scenario, you might think, but Wilhelm Kaenders and Thomas Weber are no ordinary co-workers - the pair are joint presidents of Toptica Photonics, a manufacturer of customized diode-laser systems.

The unusual structure of the company is reflected in the way in which Kaenders and Weber each take responsibility for different projects. Kaenders is more academically inclined, and was a postdoctoral researcher at Hanover's Institute of Quantum Optics before joining Toptica. Weber, who holds a spectroscopy PhD, looks after the financial side of the operation and leads Toptica's efforts in the optical data-storage market.Toptica's marketing line - "Wherever light is not enough" - spells out the premise of the company. According to Kaenders, this essentially means taking a consumer laser diode from a supplier and turning it into a diode-laser tool useful for science, industry and medicine. "I'm always telling people that anything beyond a laser pointer is our responsibility. We take a blue laser from Nichia, for example, and give it singlemode, single-frequency operation, tunability and a high-quality wavefront."

On this basis, Toptica has been profitable since its inception. The company began life in 1995 at parent company TuiLaser, an excimer-laser specialist. TuiLaser's chiefs wanted to get a foothold in the emerging market of diode-laser systems and the Munich-based company had close ties with optics guru Ted Hänsch at the nearby Max-Planck Institute for Quantum Optics.

With Hänsch's help and backing from the Federal Ministry for Education and Research, the company took on a handful of engineering staff and began to develop diode-laser systems for atom cooling and trapping. This resulted in its first commercial product - a stabilized, tunable source with singlemode operation. Kaenders was lured over from Hanover to develop the system, which used a Littrow grating for tuning the output laser frequency.

In 1998 the fledgling company was spun out under the name TuiOptics. Last June, however, the company held a cocktail party at the Laser 2001 show to announce a new name that reflected its growing independence from TuiLaser: "We had already decided to change our corporate structure from a limited to a public company. This makes it easier to exchange shares and therefore easier for us give share options to our employees, who have contributed so much to our success. At the same time we thought we should change our name to reflect our progress. After a democratic vote by the workforce, we became Toptica."

Weber and Kaenders describe Toptica as a company with four "legs", by which they mean core business activities. The first leg, which accounts for around 50% of revenue, is from sales of tunable systems for research scientists in university labs - a direct spin-off from Hänsch's work.

The second leg (producing 20% of revenue) emerged when Masud Mansuripur, a world leader in the optical data storage research field at the University of Arizona, US, was looking for a company with which to commercialize his optical-disk testing equipment. During a conference, he found himself seated next to a physics professor from the University of Munich, who happened to know the founder of TuiLaser and told Mansuripur of Toptica's expertise.

Mansuripur contacted TuiLaser and the company subsequently developed a line of disk testers to be used for checking CD and DVD manufacture - a niche in the market that, says Weber, is currently unfilled by the large drive manufacturers.The third leg of the business, accounting for around 10% of revenue, is Toptica's distribution network. The network enables university researchers interested in commercial spin-offs of their laboratory work to launch new products without having to set up company themselves. "Either somebody can manufacture their own product 'brand' and use our distribution network, or, if they want to sell the product under the Toptica brand, we will take over its production and pay them a licence fee. We operate both ways," said Kaenders.

These three legs have each contributed to Toptica's steadily increasing revenues in the past. Weber and Kaenders are now hoping to start exploiting their technologies in an increasing range of applications. For the first time, they are looking to break into the medical and industrial sectors.

In general, according to Kaenders, the high-performance nature of Toptica's systems precludes their use in medical applications, because photodynamic therapy and fluorescence imaging do not require high beam quality or singlemode operation. However, he is now working with an Israeli firm on a customized diode-laser system that exploits high-value beam attributes to monitor the vitality of body tissues, with a view to aiding neurosurgery, organ transplantation and open heart surgery.

Along with Raman spectroscopy for process monitoring, the most promising candidate for industrial success looks to be violet systems for the printing industry. "There is an emerging philosophy in printing called computer-to-plate," said Weber. "The feeling is that two technologies will survive in the long run. One of these uses infrared sources and the other uses violet laser diodes. It just so happened that when we were working on violet sources for optical-disk testing a printing company came along and said 'We need the same thing!'."

Kaenders feels that violet sources have the advantage of being the cheaper technology compared with infrared, and says that within a year the prospects for such printing systems will become much clearer.

So will the printing market become as strong a leg as Toptica's existing three? "It's already a strong leg - it's just small," said Kanders. "It is a market that we can grow into without losing control of what we do."Keeping control of production and company growth is key to Toptica's business plan. Weber and Kaenders have deliberately avoided the telecoms bandwagon, notwithstanding a handful of systems that are used in testing applications. "We have a lot of basic products that are useful for telecoms, but as soon as you bring these to market you have to switch from producing 100-1000 units to at least 100 000 units per year, at a very low price. That's a jump that we are not willing to make," explained Weber. "We have always supported ourselves so far, and the telecoms trade would have forced us to give up that control."

Kaenders agreed: "We were very reluctant to ride the telecoms wave - we know about the problems involved. So far, the downturn hasn't affected us at all."

Conversely, the optical communications boom has been very beneficial to Toptica. To achieve the revenue growth demanded by investors wanting big returns, companies such as Spectra Diode Labs and New Focus have been forced to focus on their core business units. This has meant that they have largely dropped their endeavours in the scientific market, leaving the field clear for Toptica, which has a monopoly in some application areas. "Companies like New Focus have forgotten the traditional fields they once served," said Kaenders.

Weber says that any sectors that look likely to take off in the future will be dealt with cautiously: "The scientific field provides the real basis for the existence of our company and everything that comes in the future [for us] will be based on a scientific application. If something industrial like printing took off and we were asked to make 100 000 systems, we would spin off a subsidiary company to focus on that deal."

Meanwhile, all of Toptica's sectors are enjoying steady growth, and turnover is currently at about DEM 12 million. A three- or four-fold increase in turnover is planned by 2005. "If we wanted to become a billion dollar company the scientific market is not practical, but we could still become a 50 million dollar company and stick to this market," said Weber. Some 80% of Toptica's revenue is made outside of Germany and publicly funded applications account for the same proportion.

A large number of PhD-level scientists and engineers work at Toptica; around 25 of the 45-strong workforce fall into this category. A handful of PhD students can always be found pursuing projects at the company, and Weber says that many have joined the firm upon completion of their studies - a good sign of a happy workforce.

Hänsch has maintained his close links with Toptica - he is a member of its scientific advisory board, which meets annually to discuss developments in research and new applications for Toptica products.

Kaenders describes his own scientific backround as "absolutely crucial" to the company's successful start. Pointing across the office to where he and Weber sit, he said: "When I arrived from university, I put my wooden box full of address cards on that table and started calling my former colleagues to ask them if they wanted to buy a laser. That was the beginning of TuiOptics." The box is still there, and so are many of the contacts, providing a solid grounding for Toptica's future.

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