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17 Jun 2002
Is Singapore a good place to launch an optics company? This is a question that people at the recent US Photonics West exhibition asked Singapore's newest start-up DenseLight Semiconductors. Rebecca Pool visited Singapore to find out more.
In January of this year, a start-up called DenseLight won USD 30 million to commercialize its indium phosphide integrated circuits. Launched in May 2000, the already 100-strong company is selling a 1550 nm distributed feedback laser, a superluminescent diode and a high-performance gain chip. And more products will be announced at this year's US Optical Fiber Communication exhibition.
While this is perhaps unique given today's depressed economy, what is even more unique is that this multi-million dollar optics start-up is from Singapore. Siu-Chung Tam, DenseLight's proud chief executive said: "It is quite safe to claim that our company has attracted the single highest investment for any spin-out company from a Singapore university."
Strong on infrastructure
However he also admits that at the US exhibition Photonics West this year, he was asked many times if Singapore was the best place to launch a company. "The market is still US centric and we need to address this issue," he said. "We are currently looking into overseas offices and are looking forward to a US presence."
Hamish Bell of 3i, the venture capitalist that backed DenseLight, agrees that it is essential for any Asian company to expand to the US, but adds that US companies also need to cross the Pacific to Asia. "This works both ways," he said. "The demand for optics [in Singapore and Asia] is big; this is all about building a global network."
Poised for growth
Kelvin Ng is the sales director of Singapore optics company Zugo Technology, and also a keen proponent of setting up shop in Singapore. He too believes that photonics in Singapore is on the verge of great growth.
"I think Singapore is very close to being recognized as a key optics provider," said Ng. "[But] the Singapore market itself is small and products that are manufactured here cannot be supplied to Singapore that much. This is a big disadvantage compared with, say, China."
Ng believes that to continue attracting overseas investment into its optics industry, Singapore needs to build on its already strong infrastructure. "We must have more engineers and technicians to support the manufacturing operations," he said. "[Fortunately] the government has highlighted that photonics will help Singapore grow further and includes this [technology area] in its funding programme."
And this is a market opportunity that Zugo Technology has pounced on. As well as developing components for optical communications and laser systems, Zugo Technology also makes photonics education systems for training within research institutes. These self-contained packages contain all the components and optoelectronic instruments needed to experiment in areas from fundamental physical optics and lasing to optical waveguiding and network analysis.
"Education is a good start and the kits will be a big help in training," said Ng. "Once our government decides to do something, the whole nation is always supportive and committed to ensure its success." This could be good news for the optics industry, as the Singapore government has recently launched a number of optics-promoting projects, including the Singapore Centre of Photonics Excellence (SCOPE).
Government incentives
"SCOPE is a virtual platform for research and industry professionals to network," explained Gerald Goh, deputy director of Precision Engineering from Singapore's Economic Development Board (EDB), a government agency that helps to drive business and investment in Singapore. "Each research center has its own area of expertise and SCOPE allows companies to tap more easily into the research and development."
One such example is a NUS collaboration between a team of researchers at the Institute of Materials Research and the Center of Optoelectronics. This led to high-brightness blue light-emitting diodes and blue gallium nitride semiconductor lasers.
Soo Jin Chua, director of Optoelectronics at NUS has high hopes for optoelectronics in Singapore. "Singapore is strong in lenses - for example Avimo and II-VI make infrared optics here - but now we are moving into optoelectronics," he said.
Chua adds that an increasing number of overseas start-ups are using the facilities held at the various institutes. "We are more advanced than India and China and are well known for our manufacturing expertise," he said.
Other optics initiatives include the Start-up Enterprise Development Scheme, a USD 27 million fund to seed new start-ups, and the government has also supplied USD 100 million to the Singapore arm of 3i's Asia Pacific technology fund.
But Singapore isn't just about new companies. More established optics companies that have already set up a base in Singapore include electronics giants Agilent of the US, Hoya, Japan and US telecoms component maker Zolo Technologies. Technology provider, Perkin Elmer has its Asian headquarters, and research and development in Singapore, but farms out its manufacturing to cheaper neighbouring countries. The EDB believes this is a good model for any company coming to Singapore.
"We don't have the lower [production] costs of China, but we have technology and intellectual property protection," said Goh. "We believe Singapore offers value to investors and as we become more of a technology nucleus, it makes sense to keep your research and development, and product development here."
Stability costs
However as with most things in life, expertise is not cheap. Singapore's high level of research and development infrastructure does come at a cost but on the other hand the country offers a high standard of living with financial and political stability.
And what's more, the country is well-placed to serve the entire, rapidly emerging Asian optics market, a quality that EDB believes is crucial to Singapore's future as a "technology hub".
"For a Singapore-based company, being located outside the US is not a disadvantage as the optics industry is very globalized already," added Goh. "The US was the early adopter of dense-wavelength division multiplexing technology and the market is already saturating. The Asian market is focused on the future, and we will see strong growth as it moves forwards."
Author
Rebecca Pool is news editor of Optics.org and Opto & Laser Europe magazine.
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