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LightPath aims to break infrared optics cost barrier

04 Apr 2012

Orlando-headquartered company expects to reduce optics cost by 40%, driving expansion in both defense and commercial markets.

Optical component maker LightPath Technologies is to focus on a specific set of products and industries with what it sees as large growth potential, as it continues to develop its manufacturing process to cut the cost of infrared optics.

Those key products and target application areas include: molded infrared optics for thermal imaging, security and surveillance; optics for industrial and medical lasers; and optical assemblies for fiber-optic light management.

CEO Jim Gaynor said in a company statement outlining the future strategy: “We are in a position now to leverage the manufacturing technology and optical expertise we’ve developed over the past twenty years into a specific set of significant growth applications and industries.”

“Applications of infrared and thermal imaging technology have grown dramatically over the last ten years into various markets including industrial inspection, automotive safety, chemical and biological sensing and security and surveillance,” he added.

Strategic shift
LightPath is undergoing a major strategic shift – switching from low-volume, high-cost applications to become a high-volume, low-cost supplier, and also moving up the optics value chain by focusing on assemblies as well as individual components.

Gaynor sees the cost of infrared optics as one of the major reasons holding up more extensive applications growth, and thinks that LightPath’s proprietary designs, combined with a low-cost manufacturing facility in Shanghai, can make the difference.

“Cost is now a major barrier to further expansion into mission-critical defense and high-volume commercial applications,” claims the CEO. “LightPath has a process that when completely developed will reduce optics cost by 35-40% or more. This should have a significant impact on the market and our business.”

LightPath believes that the infrared market is now worth close to $5 billion annually, and it is seeing a number of customized applications that suggest future growth potential make their way through the product development pipeline.

Brian Soller, the company’s VP of corporate development, identifies optics for medical devices and laser rangefinders as two examples where this may happen, but defense applications remain the workhorse of the infrared industry.

According to research by the analyst company Frost & Sullivan, US spending on unmanned systems equipped with infrared sensors should reach $3.6 billion next year – with 90% of that total relating to the fast-growing market for unmanned aerial vehicles (UAVs), also known as drones.

But commercial applications are also emerging, for example driver assistance technology in cars, and this is another target market for LightPath.

Shanghai capacity
The company can retain an interest in the US defense sector thanks to its base in Florida, but the vast majority of its products are now manufactured off-shore at a 16,000 ft2 facility in the Jiading Industrial Zone near Shanghai in China.

The idea is that lower-cost, precision-molded chalcogenide optics can displace more traditional diamond-turned germanium components. According to LightPath, while it can be cheaper to produce diamond–turned lenses in low quantities, when it comes to production runs of 1000 or greater the precision-molding approach becomes much more cost-effective.

With systems providers looking to develop infrared cameras at a price point in the range of $500, the existing infrared optics technology makes up a huge part of the bill of materials – LightPath estimates this cost to be at least $200, and says that this could be reduced drastically with its high-volume process and available capacity in Shanghai.

Sales growth
In February, the company reported that sales grew 13% to $5.4 million in the first half of fiscal 2012, compared with the prior year – largely thanks to a 50% jump in unit volumes of its precision-molded optics made in China, which accounted for more than three-quarters of its revenues.

Although high-volume commercial applications are likely to be the key to LightPath’s planned sales growth, the US defense sector remains hugely important to the company. But this is an area that also stands to benefit from lower-cost infrared technology. Last month, LightPath agreed a $1.1 million research and development contract with Raytheon Vision Systems, in support of a Defense Advanced Research Projects Agency (DARPA) project to develop a wafer-scale, “camera-on-a-chip” manufacturing process for low-cost thermal imaging.

“The lower-cost infrared optics that should result from our work on [this] project may not only enhance our warfighters’ capabilities, but could open significant new market and application opportunities in thermal imaging for LightPath,” observed Gaynor at the time.

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