Friday, December 16, 2011

Is the U.S. wired Internet infrastructure weak? Revisited.

Tom Hausken
Optical Networking Research
Strategies Unlimited
It's time to weigh in on a pet peeve of mine. The topic is the state of high-speed Internet in the U.S., in a December 4 essay in the New York Times. My peeve is that once again the U.S. wireline infrastructure is portrayed as somehow way behind, whereas a reasonable analysis presents a very different picture. For a large country, the U.S. actually has a very strong and affordable infrastructure.

The author has a point. There is a digital divide in the U.S. and in the world. It's increasingly important to treat broadband access as a necessary service for all citizens. National averages overlook that large groups of people are left out.

The problem is how the point gets twisted along the way. The way the author explains it is like fingernails on a blackboard to me. I've complained in this blog before (here and here) and I can't let this one go too.

For example, the U.S. is portrayed as 12th in the OECD economies. That's per capita. Iceland is number 5. It has 110,000 people. You get the idea. The OECD aggregates across the whole U.S., while smaller countries will almost certainly show up in the wings of the distribution. We should compare tiny Iceland with, say, a successful regional provider in the U.S., not the entire U.S. In fact, larger countries like Germany and France are passing us up. That is important. Let's say it.

The author points out that even Portugal and Russia are upgrading to optical fiber. That's because their infrastructures were so bad in the first place. The U.S. is rewiring with fiber, but it's a big country, DSL is working pretty well, and someone has to pay for upgrading to fiber. A too-rapid deployment would recreate something on the scale of the Telecom Bubble of the late 1990s. We know how that turned out.

Broadband is also portrayed as a monopoly, yet residential users can choose from the wireline provider, cable provider, and even wireless providers. Competition is good, but we've come a long way.

The author says the providers should sell access to their networks to competitors, to reduce prices. But the problem is that everyone wants the high-end customers. There's a reason that underserved neighborhoods are underserved. There's less profit there.

Having worked in telecom policy in Washington, it is an ongoing process to improve broadband access to underserved groups. It's messy, because there is the FCC and Congress, 50 state regulators, municipal governments, and the courts. And it's "inside baseball"; pretty boring stuff if you're not a lawyer.

The author is right, we should be striving for broader broadband access.I guess it's just something about how she said it.

Friday, December 9, 2011

The top 10 laser suppliers: some tight races, but a good year for all

Tom Hausken
Optical Networking Research
Strategies Unlimited
Now that 2011 is coming to a close we can estimate who are the leading laser suppliers for the year. Once again it looks like Trumpf and Coherent are neck and neck for Number 1, with over $800 million each. Rofin and Cymer are in a close race for 3rd and 4th places, with nearly $600 million each. IPG will roll in 5th, but this year with over $450 million in fiber laser sales. IPG's 2011 revenues would have put it at #1 as recently as 2009.

These players are familiar names. Cymer dropped out of the short list in the recession, but is back again. The order changes depending on the exposure of companies to different sectors. Trumpf and Rofin are highly exposed to heavy manufacturing, while Coherent is more diversified. Cymer is basically a one-product company.

I can't really know how the year will end up, of course. But three quarters are finished, and so far it looks like the fourth quarter is behaving as expected. Only the floods in Thailand have created surprises, but that's confined to telecom components, hard drive manufacturers, and the like.

I also can't really know what Trumpf is up to. And a lot of revenues for a company like Rofin-Sinar are really system sales, revenues that would not be counted if it were a company like Trumpf or Newport.

And then there are the telecom transceiver manufacturers. Finisar, JDS Uniphase, Oclaro, and others are all very strong in that segment, and Finisar is closing in on $800 million itself. With the companies above, and a couple others, that rounds out a list of the top 10.

It's also interesting that the Top 10 make up over 50% of all laser sales worldwide.

But I don't want to give too much away. There will be more on 2011 and 2012 at January's Laser Focus World Marketplace Seminar and our upcoming market report.

Tuesday, December 6, 2011

Solar farms: the newest crop in the desert southwest

Gail Overton
Senior Editor
Laser Focus World

In the dusty little corner of the planet--the lower Mojave desert--that I call home, it's time to start raiding the just-picked lettuce and broccoli fields for the abundant leftovers. Broccoli soup, wilted lettuce, and wedge salads will be commonplace at my house for the next few months; after all, I live just next door to Yuma, AZ, the winter lettuce capital of the world. But sprouting from the ground with concrete footers and rows of metal posts rather than green shoots are fields of silicon, steel, and glass structures that are harnessing the sunlight to power our homes rather than fill our stomachs. The latest crop in the desert southwest today is not a vegetable.

Utility scale solar photovoltaic and concentrating solar power (CSP) installations in southern California and Arizona are the latest cash crop. The small town of Gila Bend, AZ is home to three separate solar farms, most located/to be located on former agricultural fields to fast-track environmental assessments (tortoises must be moved!).

One of the largest solar fields in Gila Bend is the 280 MW Solana Solar Project, which is using CSP technology from Abengoa Solar (Sevilla, Spain). The image above, courtesy Gunther Portfolio, shows the support structures being "planted" for Abengoa's proprietary parabolic trough technology. Parabolic mirrors focus the sun on a heat transfer fluid that can reach 735 degrees Fahrenheit. The hot fluid transfers its energy to water to create steam that runs conventional steam turbines. Large "thermos-like" buildings containing the molten salt hat transfer fluid are located next to the steam boilers. At select times, instead of immediately creating steam, the heat transfer fluid will heat the molten salt. Electricity can be created immediately, or from heat energy that was created up to six hours earlier--a real benefit when the sun is not shining. The YouTube "marketing" video below gives a decent overview of the Solana Solar Project:

Another solar field in California that will also use Abengoa Solar equipment is the 280 MW Mojave Solar Project--currently underway thanks to a $1.2 billion dollar loan guarantee from the U.S. Department of Energy, which comprises the bulk of the overall $1.6 billion total investment for the San Bernardino County installation. Yes, a government loan guarantee is resulting in actual hardware and actual energy generation; it’s a shame that the Solyndra scandal is getting all the headlines.

In addition to CSP-based solar farms, photovoltaic (PV) panels from First Solar (Tempe, AZ) will comprise the 550 MW Desert Sunlight Project near Desert Center, CA (operational by Q1 2015) and the 290 MW Agua Caliente Solar Project near Dateland, CA. First Solar continues to be one of the most profitable thin-film PV manufacturers, with its cadmium telluride (CdTe) recipe competing against conventional crystalline silicon PV modules. Another alternative is solar thermal power, which will be implemented in the 392 MW Ivanpah project by BrightSource (Oakland, CA).

Sadly, solar energy still accounts for less than 1% of all the energy sources used worldwide today. But rather than dwelling on this fact, I'd rather remain optimistic that renewable energy will be the savior of our planet. Scientists are improving the optical-to-electrical energy conversion efficiency parameters daily, and solar energy is available TODAY unlike some other yet-to-be-proven energy methods such as laser fission/fusion via the National Ignition Facility. As huge swaths of arid desert land lay fallow due to lack of water and cheaper produce from Mexico and South America, why not plant a solar farm instead?