28 Sep 2010
Optical component maker targets infrared applications as it moves from niche markets to become a high-volume manufacturer.
Lens producer LightPath Technologies is beginning to see the results of a huge increase in manufacturing capacity aimed at penetrating commercial applications.
The company, which is based in Orlando, Florida, produces most of its optical devices at a facility in Shanghai. In recent months, its sales of precision-molded aspheres and optical assemblies in China have more than doubled, after the company began targeting applications in medical equipment, industrial laser tools and telecommunications.
LightPath’s more traditional market has been defense, but as director of marketing Ray Pini explains, the company’s expansion plan has been central to opening up those new market segments:
“Laser targeting and tracking are good examples of the type of high-volume applications that are now open to LightPath,” said Pini. “[We] have spent the past three years revamping our molding technology and using new glasses that have allowed us to reduce our manufacturing costs by an order of magnitude. The production volumes and price targets for markets that were previously out of reach are now open to us.”
New lens material
One of the key developments has been the development of a process that uses novel chalcogenide glass. The moldable material is seen as a good replacement for germanium-based infrared lenses, which are commonly used in thermal imaging, but which cannot be molded.
While thermal imaging is the key infrared application, others now emerging include optics for quantum cascade laser (QCL) systems, gas spectroscopy and infrared countermeasures. LightPath has also recently completed a Phase II Small Business Innovation Research (SBIR) contract awarded by the US Navy, under which it developed a production process for large-diameter infrared optics. “The commercial impact of this program is that we have expanded the available markets for both our infrared optics and larger-diameter visible aspheres for imaging and laser delivery systems,” Pini added.
Traditionally, the company’s aspheric lenses have been limited to visible and near-infrared wavelengths, but the recent advances mean that lenses covering wavelengths all the way up to 14 µm in the long-wave infrared can now be produced. Traditionally, optical components operating at such long wavelengths have relied on diamond-turning to produce individual optics, but the precision-molding approach is believed to significantly reduce the number of lenses required in a thermal imaging system.
IR cost reduction
“Demand for infrared imaging systems has been growing significantly, based on the steep decline in prices of infrared detectors,” explains the company. “These growing markets provide a unique opportunity for high-volume, molded infrared aspheres, [and] LightPath’s aspheric molding process is an enabling technology for the cost reduction of infrared imaging systems.”
With its capacity expansion program completed, Pini says that LightPath is currently operating at about half of the maximum capacity available at its Shanghai facility: “As our business grows, we have room for expansion without the need for much capital investment.”
To put that figure into context, prior to the recent expansion LightPath produced about 300,000 lenses per year, supplying to key customers such as AMS Technologies, Thorlabs and Edmund Optics. In its 2010 fiscal year, which ended on June 30, the company shipped some 1.2 million lenses – translating into total revenues of $9.3 million, up from $7.2 million in fiscal 2009.
Pini says that LightPath has enough capacity to ship more than three million lenses as its commercial traction grows, and expects significant revenue growth as those commercial applications really begin to kick in. According to a recent report produced by Cohen Independent Research Group, which LightPath commissioned at a cost of $7500, the company’s annual sales revenues should increase to just over $36 million by 2015, with margins improving as the spare capacity at the Shanghai facility becomes fully utilized.
The Cohen report also values LightPath’s common stock – currently trading at around $3.00 on the Nasdaq Capital Market – at close to $5.60, assuming that LightPath meets its revenue and margin targets.
LightPath CEO Jim Gaynor summed up the progress being made after the company announced its fiscal 2010 results last month. “LightPath is continuing its transition from a low-volume, niche market supplier, to a high-volume manufacturer of optical components.”
“In the short term, we remain cautiously optimistic. Over the long term, we anticipate strong top- and bottom-line growth.”