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Bookham spreads wings with VCSEL acquisition

A stock deal that could eventually be valued at $8 million sees VCSEL producer Avalon Photonics set to come under the wing of Bookham.

Optoelectronic chip manufacturer Bookham is to broaden its device portfolio with the acquisition of Zurich-based Avalon Photonics.

The all-stock deal signed by the two is worth an initial $5.5 million, a figure that could rise by a further $2.5 million if the acquired business hits certain revenue and production milestones over the next two years.

Bookham told compoundsemiconductor.net that manufacturing will be transferred from Avalon's own facilities to both of Bookham's chip fabs. The US company makes InP-based optoelectronic devices at its Caswell, UK, facility, while it has a high-power GaAs laser fab local to Avalon in Zurich.

The Swiss company specializes in 850 nm VCSELs, arrays and subassemblies, and production of the VCSEL chips will be the initial focus of the manufacturing switch.

Through the acquisition, Bookham hopes to further diversify its applications base beyond that of telecommunications: "This [VCSEL] technology will extend our product offerings in the datacom and sensing markets, areas we believe offer good growth opportunities," said Bookham CEO Giorgio Anania.

Adding another chip technology to its portfoilo should also help improve Bookham's fab utilization rate.

Although a relatively small-scale VCSEL producer in comparison with rivals such as Advanced Optical Components or Avago Technologies, Avalon's technology has some proprietary features that allow single-spatial-mode operation.

The company was set up as a spin-off of the Swiss Center for Electronics and Microtechnology at the height of the telecom boom and received venture backing from Intel among others (see related story).

The mythical-sounding company name has nothing to do with Avalon s chip technology or revenues, however. According to the firm, it only arose after a photo shoot to show off its VCSELs was arranged back in the heady days of 2000: "We produced fog so that the the laser beam was visible, and it reminded us of the Arthurian legend The Mists of Avalon by Marion Bradley," said Avalon s Karlheinz Gulden back in 2001.

In the past, Avalon has also developed some longer-wavelength VCSELs. Bookham will not focus on these more exotic devices initially, but has not ruled out the possibility of moving them into volume production at a later stage.

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