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Editorial: Conference Report on OFC/NFOEC by Lee Johnson
... Lee Johnson attended OFC in California early this month, which this year joined forces with NFOEC as the optical marketplace continues to dramatically 'consolidate.' Lee, who was formerly with both TriQuint and Emcore, is especially knowledgeable in the field and has recently relocated in Hilton Head, South Carolina. We...
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Quantum Dots Boost Silicon Light-Emitting Capability--Long Way to Go Before Competitive
CompoundSemi News StaffMarch 21, 2005...Susumu Fukatsu and his University of Tokyo Colleagues have demonstrated a silicon-based LED that uses strained quantum dots made of Gallium Antimonide (GaSb) to boost its ability to emit light, according to an Optics.org article. The device reportedly achieved an external quantum efficiency of 0.3%. Content continues for LIGHTimes SecondPage members... Veeco Projects Growth and Announces Status of Corrective Actions
Scott McMahanMarch 17, 2005...In a quarterly conference call Edward H. Braun, chairman and CEO of Veeco said that they should have about a two percent increase in revenue per quarter over the next three quarters despite the likely decline in the LED and wireless equipment sales resulting from market saturation in 2005. Mr. Braun reported, “Revenues increased in all our core markets, with particular strength in LED, wireless, data storage and semiconductor.” Mr Braun added, “Our 2005 focus is to improve our profitability across our Process Equipment and Metrology product lines and to position Veeco for what we currently believe are strong growth opportunities in 2006 and beyond.”
Veeco announced their completion of the internal investigation of improper accounting at their TurboDisc business unit. Jeferson Wells, a firm retained by Veeco’s audit committee, reported the findings. According to Veeco, “Conclusions reached during the investigation included that the improper entries were made by a single individual at TurboDisc whose employment had been terminated prior to the commencement of the investigation.” The company said that the investigation, that began after an internal audit found improper accounting, focused on, “the value of inventory, accounts payable and certain liabilities, as well as certain revenue transactions of TurboDisc.” Mr Braun added, “Actions have been taken to resolve these accounting issues, including the completion of an independent review, appropriate staffing changes, and transitioning TurboDisc to Veeco's SAP accounting system."
He said, that they expanded the investigation into, “other parts of the company in certain areas just as a precaution and found nothing to warrant any further examination or expansion of the search.” Mr. Braun explained, “Its only limited to one individual, and one site, and he is very much contained…No motive was found; there was no provable embezzlement. No assets left the building. Nobody seems to have individually prospered because of this. No one was coerced by management or the company to follow this incorrect accounting. We have found the problem, we have fixed the problem.”
In related news, Veeco appointed Richard Wissenbach as Senior Vice President, General Manager for its Compound Semiconductor/Epitaxial Process Equipment Group, which includes the TurboDisc MOCVD operation in Somerset, New Jersey USA and its MBE operations in St. Paul, Minnesota.
Company News Release
AXT Appoints New CEO
CompoundSemi News StaffMarch 17, 2005...The AXT Board of Directors has appointed Philip C. S. Yin PhD. as their chief executive officer effective March 28th. The company, of Freemont, California USA, a producer of compound semiconductor substrates for the fiber optics and communications industries, says that it will grow in 2005. Don Tatzin will step down as interim CEO to serve on the the Board of Directors. The company chairman, Jesse Chen said, “We believe that AXT is poised for growth during 2005 and Phil's track record of increasing sales and customer satisfaction in his previous positions will accelerate our improvement." Dr. Yin has a distinguished career as an executive in the compound semiconductor and semiconductor industries and most recently served as general manager for North America of AIXTRON Inc., a leading manufacturer of MOCVD equipment used in the compound semiconductor industry. In other company news, as part of the company's ongoing effort to reduce its cost structure and bring capacity in line with current market demand, AXT on March 11th reduced their manufacturing workforce at their Beijing, China facility by 100 workers or about 15%. More on Northrop Grumman's Role in the DARPA Wide Bandgap Initiative
CompoundSemi News StaffMarch 16, 2005...As follow-on to our initial coverage,
Northrop Grumman's award from DARPA for work on the new Wide
Bandgap Semiconductor Initiative is in Phase II. This was clarified for us by
Dwight Streit, VP of Foundation Technologies, at the company's Space Technology
sector in Redondo Beach, California USA. Setting the record straight, Dwight pointed
out that the company is indeed still in the same merchant foundry business
as TRW was during DARPA's original GaAs MIMIC Program. (Ref:
March 14 editorial, The Long Awaited DARPA GaN Awards). Dwight served
as TRW's principal in that earlier program. Currently, NG continues to providing
merchant GaAs foundry services as well as InP services through its Velocium
arm (which still exists as constructed by TRW, which was scaled down when
NG purchased TRW). According to Dwight, NG will additionally offer GaN foundry
services when the new GaN on SiC lines reach X-band production capability. Dwight
indeed agreed that this was the long-awaited GaN awards, and reminded us that
the program actually began with Phase 1 and that this current award round to
three teams, TriQuint, Northrop Grumman and Raytheon (and Raytheon may not actually
be the prime in that program) is actually Phase II.
The old MIMIC Program actually
started with a Phase 0 that included TriQuint and virtually everyone else in
the compound semi field at the time, and the field was whittled down to Raytheon+TI and TRW+Westinghouse.
Dwight pointed out that the historic tie-ins are especially interesting. The
Redondo Beach Space Technology campus, (which is huge) is where the original
Space Technology Laboratories was located; It was launched the day after
Sputnik was launched in 1957. Starting at Ramo and Wooldridge, Thompson became
involved when the first ICBM contracts were let and the company became Thompson,
Ramo and Wooldridge (TRW). Another tie in is that TRW was teamed with Westinghouse
Baltimore for MIMIC, and Westinghouse Baltimore was acquired by Northrop Grumman,
so the internal NG team for the WGB program is really a reuniting of the old
MIMIC TRW+Westinghouse team, with some of the same people involved. NG is also
purposely not yet revealing the names of all their suppliers and partners. Deep UV LEDs Reach Major Milestone in Water Purification
Jo Ann McDonaldMarch 15, 2005...A team of incredible USA scientists and engineers have succeeded in demonstrating an LED-based flow-through UV water purification module.
The technology has made major strides, but it still has not reached the realms of commercial feasibility for an ultraviolet LED-based
solution for water purification and a replacement of mercury vapor lamp purification technology. The team consists of especially
talented people from Sensor Electronic
Technology, Inc. (SET) in Columbia, South Carolina, the Photonics
and Microelectronics Lab at the University of South Carolina (USC) in Colombia,
South Carolina, and Hydro-Photon Inc. (HPI) of Blue Hill, Maine. SET is headed
by Remis Gaska and Michael Shur,
USC is headed by Asif
Khan, and HPI is headed by Miles Maiden. HPI is the creator and seller of
a popular product called the "Steripen"
that purifies water using mercury vapor lamp technology that currently sells
for $149 and is used primarily by outdoor adventurers and travelers to places
where the drinking water is questionable. HPI's next generation product will
use an array of UV-LEDs, be significantly smaller and more compact, last longer,
and sell for under $50.
The commercial application has been helping drive DARPA's SUVOS
program, which is under the direction of Col. John Carrano, seen pictured
third down on the right at our Blue
2003 conference where he presented the first results of the SUVOS. SET is the
leading commercial supplier of deep UV LEDs with wavelength ranging from 255
to 340 nm and is the only commercial supplier of 265 nm to 320 nm LEDs
which are the wavelengths required for efficient water purification. Working under
a contract with the Office of Naval Research (ONR) and the support of the SUVOS
program, HPI has developed a bench-level prototype flow-through treatment
chamber that incorporates 10 of the SET/USC 280 nanometer devices. The aluminum
treatment chamber (a half cylinder with a volume of approximately 4 cubic centimeters)
was fabricated to maximize UV reflectance and heat sink capacity. Commentary on the
progress and potential of UV LEDs is included in our March
15 McDonald Report LIGHTimes editorial.
Content continues for LIGHTimes SecondPage members... Our news features are reported
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The
McDonald Report
Commentary & Perspective...
March 21, 2005...Lee Johnson attended OFC in California early this month, which this year
joined forces with NFOEC as the optical marketplace continues to dramatically
'consolidate.' Lee, who was formerly with both TriQuint and Emcore, is especially
knowledgeable in the field and has recently relocated in Hilton Head, South
Carolina. We thank him for covering the meet for us, and if you'd like to contact
him directly, Lee's new email address is: ljohnso503@earthlink.net... JMcD
Network Investments Are Driving Demand for Optical Components
a Guest Editorial by Lee Johnson
During the combined Optical Fiber Communication Conference and Exposition (OFC)
and National Fiber Optic Engineers Conference (NFOEC) in Anaheim, California
USA, the (appx.) 13,500 attendees (down from last year's 15,000) saw evidence of continuing industry consolidations and a stabilizing
revenue trend for optical communications products. The take away from this year's
conference, given the backdrop of new service offerings by the carriers, is
that network investments will open selected revenue opportunities for the optical
components industry. The opportunities are driven by the Telco and Cable MSO
"triple-play" service offerings, FTTX access network deployments by
Verizon, SBC, and BellSouth and the move to a converged 10G transport rate.
The OFC/NFOEC 2005 event marked the consolidation of the two primary technical
conferences serving the optical communications industry. OFC, which began in
1975 focused on the components and sub-systems. NFOEC was hosted by the then
newly formed Regional Bell Operating Companies (RBOCs) in 1985, following the
deregulation of the telecom industry, with the primary focus on the network
and systems direction. Exhibitors this year numbered 650, up slightly from 640.
The official attendee count is not yet available, but the sense on the floor
was that the attendance was similar to that of the 2004 conference.
When looking for market direction in optical component and systems, fiber demand
can be used as a proxy for future demand. Corning reported a 30% growth in North
America optical fiber revenues for 2004, driven largely by the FTTX builds.
Additionally, the service provider wireline capex for 2004 and 2005 has finally
stabilized and optical component revenues are up 20% over 2004. However, the financial profitability of the optical component suppliers
is still lacking, due in large part to operating at capacities less than 20%.
The key market opportunities presented during the conference for optical components
and subsystems are driven by the carrier spending to enable "triple-play"
service offerings in the access network and the support the Internet Protocol
(IP) network evolution. The "triple-play" access products include
single-fiber transceivers with two and three wavelengths, components for both
IP and RF overlay video solutions and passive splitters. These transceivers
contain both active and passive optical components, and many exhibitors, anxiously
presented their unique component and subsystem solutions during the presentations
and exhibits.
The second key product opportunity highlighted by the conference speakers and
exhibitors is the 10Gb/s transceiver. Since at the 10Gb/s data rate, both SONET
and Ethernet protocols can be transported utilizing low cost transceivers, the
volumes will provide significant growth opportunities with common solutions
across most of the new network applications. While these opportunities are real
and starting to ramp, two of the top five optical component suppliers are currently
generating negative gross margins and are consuming cash at unsustainable rates.
Consolidation is evident at all levels of the communications food chain, starting
at the top, with SBC acquiring AT&T and Verizon and Qwest pursuing MCI.
It is expected that fewer large carriers will exercise their pricing power and
will soon force consolidation among the equipment OEMs. In summary, while there
are new revenue growth opportunities for FTTX and 10Gb/s transceivers, there
are also too many suppliers for the crowded optical component market.
If you have questions about the
solid state lighting and compound semiconductor industries or have news
or views to share, I'm Jo Ann McDonald, Editor of LIGHTimes and CompoundSemi News.
Feel free to contact me directly, anytime. 
My direct tel at the ranch is
+1-325-463-5345
From time to time Jo Ann may comment on companies in which she holds a
modest investment - be sure to read
her disclosure at some point in time... |
