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GCS Foundry Deal Signals Shifting Opto Strategies

The move towards an outsourced business model for optoelectronic wafer fabrication gathers momentum as Xponent Photonics and Global Communication Semiconductors sign a manufacturing agreement.

In a strategic move that highlights an accelerating shift towards outsourced wafer processing of optical telecommunication devices, Xponent Photonics has established a foundry deal with Global Communication Semiconductors (GCS).

GCS, which is better known as a high-end GaAs wafer foundry that, among other things, makes RF components for US military applications, will manufacture optoelectronic devices using proprietary laser and PIN photodiode processes developed by both Xponent and GCS.

GCS told compoundsemiconductor.net that both GaAs- and InP-based wafers would be manufactured for Xponent. Although GCS would not reveal details of the number of wafer starts required, the company described the Xponent deal as being a multi-million dollar business annually.

Xponent chief executive Jeff Rittichier said, "With the completion of the GCS transfer in late winter, Xponent will be the world s only completely fabless volume producer of optical components."

Trend towards outsourcing

Although the optical components boom of the late-1990s saw a lot of companies build their own wafer fabs to make proprietary III-V optoelectronic chips, the subsequent bust has convinced many of the remaining firms that the best solution is now one based on an outsourced foundry model.

The recent deal between Swedish tunable laser designer Syntune and the opto foundry CyOptics (see related story) has already highlighted this trend, and now GCS will be able to increase its fab utilization with Xponent s processes.

"Our business in optoelectronic device processing is growing very quickly," said GCS s Simon Yu. He added that although optoelectronic wafers only account for a very small percentage of the foundry s overall volumes, revenue from these applications were worth more than 20 percent of its sales.

Yu added that he expected more companies to follow the strategy taken by Syntune and Xponent.

"We are confident that Xponent will benefit from our 4-inch high-volume wafer manufacturing capabilities to stay ahead of market competition," said Jerry Curtis, CEO of the Torrance, CA, pure-play foundry.

Xponent s technology is based on an approach called "surface mount photonics", also known as SMP.

According to the Monrovia, CA, company, using SMP means that its extended-reach Fabry-Perot lasers and photodetectors can be manufactured without the need for any manual processing steps.

Features of SMP processing include wafer-scale test and burn-in, passive alignment on flip-chip die bonders, and a simple encapsulation step instead of hermetic packaging.

Fiber-to-the-premises boom

Xponent is targeting the fiber-to-the-premises (FTTP) sector of the optical communications market with its components.

This growing market sector has also received a significant boost with the news that the UK s incumbent carrier BT is to use a new optical telecommunication system from Nortel in its 21st Century Network.

Nortel s Provider Backbone Transport - the technology that BT will deploy - is a new system that brings the ultra-high bandwidth of an optical system closer to the local Ethernet connections that are typically used by companies and individuals.

The result should lead to a boost in demand for optoelectronic chips based on III-V materials used in the optical systems, such as those developed by Xponent.

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