Monday, February 4, 2013

Lasers & Photonics Marketplace Seminar at Photonics West -- specific markets

Continued from today's earlier blog on the morning's presentations for the Lasers & Photonics Marketplace Seminar . . .

OCT market
Eric Swanson of OCT News spoke on the OCT (optical coherence tomography) market.  The field began in the late 1980s; now there are on the order of 50 companies.

Patents play a big role in OCT; there are more than 1000 issued OCT patents -- it is difficult to get fundamental patents now. Worldwide government funding for OCT has reached $1B, with $300M cumulative NIH funding. Cardiovasulare OCT revenue is 1/3 that of opthalmic OCT, but growing.  There have been $300M in acquisitions, but no OCT company has gone public yet.

For a more complete summary of this OCT market talk, go to BioOptics World's wonderful blog, BioOptics WorldView.

Challenges in mergers and acquisitions
The first (rhetorical) question from presenter Robert Mandra (RSM Advisors) was," Is now a good time to sell?"  He notes that the quantity of laser and optics deals over the last fifteen years have been relatively constant per year (with a few outliers).  His second question: "What are photonics acquirers looking for?"

The photonics industry is very fragmented (as we all know).  Many optical materials architectures; very precise alignment is often required.  Manufacturing these diverse devices and systems is quite a challenge (as we all also know).  Many, many diverse end markets also complicate design and marketing.  By comparison, the semiconductor industry is straightforward and easier for potential acquirers to get comfortable with!

Robert notes that this diversity makes it hard to find a match; the devil is in the details.  His approach and advice: just proceed one step at a time, do a fundamental, honest assessment of your specific business.  Figure out what leverage you can offer your potential acquirer.  In particular, you must make a special effort to educate any potantial acquirers, especially if they are from outside the optical industry.

New model for innovation and spinoffs
Jason Eichenholz, CEO of Open Photonics (OPI), notes that we are still in the "vacuum tube" era of photonics.  There are technical innovators who have great technology but not a clue how to commercialize them; then there are the innovators who know the markets; how to bring them together?  (This is the raison d'etre of OPI, a photonics-only accelerator company.)  Crowd-sourcing, key to open innovation, is intended to allow companies (as they grow) to use external as well as internal ideas; the result could be the discovery of entirely new markets.

In addition, your internal ideas and technology could be useful to others (licensing, etc.).  The "Photonics Horizons" program has a phase I (proof of concept, $10K from OPI, "no strings attached," IP stays with inventor) and, for phase I winners, a phase II (up to $100K, IP transfer arranged as part of the phase II proposal); both phases are peer-reviewed by tech and business experts, notes Jason. Corporate engagement comes in two versions: tier I sponsorship ($275k/year) and tier II ($65k/year).

Opportunities in fiber lasers
Valentin Gapontsev, founder of IPG Photonics, has advanced the field of fiber lasers like no other.  IPG received the Forbes award in 2012 as the 9th fastest-growing company in the U.S. on total return (Apple was 8th).  IPG currently has 2300 employees worldwide.

Fiber lasers currently have a majority market share in the high-power, metal marking, and microprocessing sectors and are still gaining, says Gapontsev.  The fiber-laser market is projected to grow from $588M in 2011 to $1,365M in 2016.  High-power CW fiber lasers that emit to power levels of 100 kW, or single-mode power levels to 10 kW, are gaining worldwide acceptance for automotive, aerospace, oil and gas, nuclear, and metal manufacturing.  Mean time to failure has been pushed to greater than 10 years.  China is the biggest market for nanosecond-range pulsed fiber lasers.

Optical components for ultrafast lasers
Ruediger Paschotta (RP Photonics Consulting GmbH) notes that limited choice of solid-state ultrafast optical gain materials leads to tradeoffs, for example between pulse duraction and output power -- top viable materials include Ti:sapphire and Yb- and Nd- doped glasses, or for ultrafast fiber lasers, Yb, Er, or Tm doping.  However, none comes with universal advantages. Fibers have a tradeoff between high doping concentrations for short length, and nonlinear effects. (Nonlinearity is the bane of ultrafast fiber lasers.) 

A solution to nonlinearities is CPA (chirped pulse amplification), but this leads to complexity and more components.  Pulse energy in fibers can be boosted by lowering the pulse repetition rate, but nonlinear effects get worse (those dastardly nonlinearities again). Detailed characterization for doped active fibers is important, but often neglected.  Passive fibers (photonic crystal and other) are also often integrated into fiber laser systems, used as CPA elements etc. as well as power delivery; the important point is that these systems have complex and interlocking properties that demand high R&D expertise, so find the best people you can.  Also, a good relationship with top fiber manufacturers will stand you in good stead.

Mid-IR and quantum-cascade lasers
Petros Kotidis, CEO of Block Engineering, talks about taking the quantum-cascade laser (QCL) to the next level in practice, in the form of widely tunable devices that, in instrumentation, access very large portions of the spectroscopic "fingerprint" region for organic materials.  Markets for this type of hardware are opening up in the areas of food production and monitoring, pharmaceuticals, gas sensing, battlefield detection of improvised explosive devices (IEDs, for example in a vehicle or buried under earth), and characterization of lubricants, to name only a few.

Standoff detection (up to 3 ft away) via handheld QCL-based spectrometers will be the driver for many of these applications, which require easy portability as well as accuracy and tunability.  Micro- to nanoscale contaminants, coatings, and biological films are common targets.  Cleaning verification of pharmaceutical vessels (allowing quicker turnaround between batches) is an early example of this technology put into practice.

White-light supercontinuum fiber lasers
Wilhelm Kaenders (Toptica) describes such devices as "broad as a lamp, bright as a laser."  In this case, nonlinearities in an ultrafast fiber laser are your friend, rather than your enemy -- as they result in the white light produced by supercontinuum lasers (in fact, highly nonlinear fibers are one important approach).

Nanosecond, picosecond, and femtosecond seed-pulse devices exist.  Application spaces include biological imaging, industrial imaging, and laboratory use.  These devices are becoming more important in the biological imaging market -- linear and nonlinear fluorescence microscopy, ophthalmology, flow cytometry, etc.  In just one use, a supercontinuum laser plus tunable filter equals a versatile, bright tunable source for microscopy.

Femtosecond fiber lasers can produce spectrally coherent supercontinua. Much lower spectral and amplitude noise are the result, as well as more-efficient nonlinear frequency conversion.  Frequency combs with 300 kHz individual comb lines are possible. Broadband interference is another effect, which can be exploited to form a spatial or temporal meter.  Simplicity is another advantage for supercontinuum-laser-produced frequency combs, eliminating the conventional pre-existing room-sized setup and replacing it with a small box.

Ultrahigh-brightness direct-diode industrial lasers
Parviz Tayebati, president of TeraDiode, delved into laser cutting and laser welding/brazing as accomplished by direct-diode lasers (high-power systems that channel laser-diode light as effeciently as possible into fibers for delivery to the workspace). Power ranges from 500 W up to 4 kW for laser cutting (an application driven primarily by the automotive and aerospace industries).

Wavelength beam combination of many laser diodes produces a beam quality as good as that of a single sourceat up to kilowatt levels for cutting and welding.  For example, a 600 W device uses nine diode bar modules, diodes and optical components are assembled semi-automatically (measurement-based and software-guided).  All this light is then channeled into a fiber.

For higher powers (up to 6 kW), polarization beam combining and sometimes a dichroic combination of two disparate already-combined wavelength ranges is done.  The resulting beam-parameter product out of the fiber is around 4 mm-mrad. Such devices are capable of displacing fiber and disk lasers for some applications, as ultrahigh efficiency is possible due to the removal of the conventional two-step diode pumped gain material setup.

And that's it for now -- a brief summary of the 2013 Lasers & Photonics Marketplace Seminar.  Of course, to get the other 99% you have to attend the seminar . . . but, for those who missed out, there's always next year.

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