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Scottish Start-up Takes A Hybrid Approach (Company Profile)

The fledgling company Kamelian has gathered venture capital and technical enthusiasm for its novel approach to next-generation optical networks. Peter Gwynne reports.
The spelling may be idiosyncratic but Kamelian s business has developed smoothly enough to satisfy the most critical analysts. Since it was founded last July in Glasgow, Scotland, the optoelectronic component manufacturer has raised close to $20 million in venture capital. The firm has also hired more than 20 people, and has hatched plans for a manufacturing and engineering development facility in England. All this has happened without the company sending a single product out of the door, but that day is coming. "We ll start providing engineering samples in the next few months and we hope to start taking orders on the back of them," says Kamelian s chief executive officer Paul May. "We will have a semiconductor optical amplifier [SOA] on the market by the end of this year." The company sees its future in integrated optical chips for next-generation optical networks. It will develop and manufacture its SOAs from indium phosphide, with the objective of integrating those active chips with other vendors passive devices, notably arrayed waveguide gratings (AWGs). The integration will produce products for dynamic functions such as switching, the conversion of wavelengths and signal regeneration. The products promise to satisfy the demands of systems integrators such as Alcatel, Lucent, Marconi and Nortel for components with higher functionality for their networking equipment. Analysts forecast that this niche of the optoelectronics market will be worth at least $10 billion by 2003. The early bird Kamelian hopes to claim a good slice of that market by introducing its new technology early. "We feel we ve put our stake in the ground," says May. "No other start-ups have become visible doing IIIVs and combining them with passive components." To stay ahead of the game Kamelian has ambitious plans for growth. It intends to expand to 80100 staff by the end of this year. "It s pretty aggressive but manageable growth," May asserts. The venture capital to enable that growth comes from two main sources. An infusion of $1.5 million from 3i Group, a major European investor in growing businesses, helped to set up the company, and last December the same venture capital firm added another $8 million. "Kamelian is a very exciting business with superb technology, an outstanding management team and the potential to become a key player in a fast-growing market," explains Andrew Dawson, an investment director with 3i s Scottish Division. At about the same time Lightspeed Venture Partners, an American venture capital company that concentrates on optical products and systems, contributed $8.5 million. "We were attracted to Kamelian because of its platform technology," says Chris Schaepe, a founding general partner of Lightspeed. "It has the potential to enable the key building-blocks of next-generation optical networks supporting intelligent wavelength provisioning and management." Cutting the complexity Kamelian s technology strategy uses SOAs, which are effectively laser diodes operating below threshold, to amplify, switch or convert optical signals to different wavelengths. These active optical chips offer greater functionality than passive chips that require no electrical power. But May does admit, "Going all active would be very complex." Kamelian s hybrid approach reduces that complexity while maximizing the benefits from its active chips (see ). Hybrids envisioned by the company include reconfigurable wavelength adddrop multiplexers, which selectively pass or drop wavelength channels, permitting data to be added to any vacant channel; wavelength converters that transform data on an input channel from an input to an output wavelength; and 2R regeneration that amplifies and reshapes data pulses on a single channel. May foresees three potential markets for these products. First are the long-haul providers of communications networks, such as Nortel and Lucent. Next come providers of metro services around cities. Finally, he says, "Last-mile access is a market for us, but in the future when costs come down." (see ) Challenges to overcome The start-up faces a number of challenges as it tries to establish itself as a major player in optoelectronics. One is getting products to market. "There s a lot of interest but we haven t signed anyone up yet," May concedes. "We re being cautious until we get the product ready." The company also faces a technical difficulty in funneling light between thick cores of optical fibers and narrow waveguides in its chips, although May asserts that it has that problem under control. The company s location in an incubator in the West of Scotland Science Park in Glasgow should help it to meet the challenges. The park is run by Compound Semiconductor Technologies (CST), an optoelectronics company founded in 1998 by Glasgow University, Strathclyde University and three regional funding groups. CST offers optoelectronic IIIV foundry services that can significantly reduce the time, cost and risk of developing new products (see Compound Semiconductor Sept/Oct 2000, p26). Kamelian has already used CST s facilities to establish its manufacturing process. The company now has plans to establish its own manufacturing facility in Oxford, home to England s oldest university and in recent years a center for technology start-ups. The 25 000 sq.ft plant is scheduled to start up before June and to move to full production by late summer. "We ll be growing our own material and manufacturing it at Oxford," explains May. "But CST will allow us to continue to use its site as the effective pilot plant for new technologies." The Oxford facility will also help with corporate recruiting. "We will have two centers of possible recruitment," May explains. "Scotland is very strong in producing optoelectronic engineers out of the universities. And we have already had situations in which being in Oxford helped us to get the right people." Kamelian s staff certainly have some impressive rsums. May helped to found Cambridge Display Technology, while chief operating office Tim Bestwick was previously director of technology strategy for Bookham Technologies, a producer of passive chips. David Sibbald, who set up a network software business that he sold to Cisco Systems last year, is Kamelian s non-executive director. And Ivan Andonovic acts as both the chief technical officer of Kamelian and the professor of broadband networks at nearby Strathclyde University, the source of the company s underlying technology. One last question: where does "Kamelian" come from? "Some of our future products will change signals from one optical channel at a particular wavelength to another, like a chameleon," May explains. "The real spelling of chameleon is a bit difficult for some people. Kamelian had some significance and was a relatively meaningful name."
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