3S Photonics Goes Back To Its Roots
Visiting 3S Photonics site on the outskirts of Paris, it s easy to wonder if you ve come to the right place. Driving through the rural French villages, fields and market gardens, it s hard to believe they call it the "Optics Valley". Then, when the extensive Alcatel-Lucent site draws into view at Nozay, few employees are certain where to find the single 3S building hidden in the sprawl of its historical founder.
3S Photonics is the company emerging from the sale of Avanex s foundry and laser business to French entrepreneur Alexandre Krivine. The new company is pushing aggressively for profitability in the first year of business, a major departure from the captive but loss-making role it played for Avanex. The opportunity to achieve that goal arises partly from the new-found freedom to sell products to all transponder and transceiver makers, including Avanex s competitors.
Beyond this, Krivine is very clear in stating the key application that will move 3S s finances into the black. "Submarine. I have no doubt. This is the key growth market, the submarine market, and we are one of only two suppliers in the world."
Krivine s bold statement is backed up by 3S s chief operating officer, Didier Sauvage: "Today there are only two players, JDSU and us. Bookham has announced some [product] introductions, but it is not yet a player. Commercially speaking, for the moment, we are the top player. We know through the meetings that we have with customers like Alcatel-Lucent, NEC, Fujitsu and Tyco that the architecture we have is really working effectively. We are in a very strong position at this point."
3S originates from Alcatel Optronics, whose GaAs and InP fabs employed 400 people at the height of the internet boom. The consolidated fab at the Nozay site now employs 110 people, although the new company also inherits a partnership with the Thai packaging firm Fabrinet, which has 250 employees dedicated to 3S. Many staff at 3S date back to the establishment of Alcatel Optronics and would be forgiven for touting the potential of submarine lasers simply because they want to relive their former glory. Sauvage explains, however, that the time is right for a resurgence in this area, not just because it s what he and his colleagues know, but because of what 3S s customers say.
"If you look at the cycle, you had a huge investment in the year 2000 in the Atlantic side. For the moment there is no further investment there. Most of the investment is in the Pacific side, with 40,000–60,000 km of new links per year for the next three years. There are also submarine links between India and Singapore. In 2009–2010 Europe and the Atlantic will come back. This is clearly the message we are getting from customers like NEC and Alcatel-Lucent."
In Krivine, 3S has a CEO who calls himself a serial entrepreneur. 3S is the fourth company he has founded, having sold his previous ventures to a variety of communication stalwarts, including Alcatel. His vision for 3S holds true to his background, looking beyond the submarine business to help 3S introduce breakthrough technologies in the longer term.
Krivine s strategy is concentrated on increasing product sales, so much so that he is contemplating pulling 3S out of foundry service work. Instead, he feels the company needs different products to guarantee its future, but they have to be the right ones.
"We need to target new markets," said Krivine, "but of course we don t have much venture money, so we want to be sure that what we are doing is good, is market directed. We are looking toward the industrial laser market, defense and the medical market too."
To help it select new markets accurately, 3S has created a dedicated scientific advisory council gathered from French academic institutions and government centers, including the president of SFO, the French optics society.
The willingness of the academic community to help 3S is an example of the goodwill the company has gained by returning to French ownership and the potential of these relationships. Another illustration came when one representative of the national defense research body declared himself "touched" at the company s launch, a widely echoed feeling that is helping 3S to enter markets previously closed to Avanex.
"Now we re French, it s much easier with the defense department," said Krivine, who will work to bring the company s wider operations closer to home.
"We really want to develop the number of employees in Europe. We re trying to reduce the number of employees who are in Asia. We have started a program with the government and we ll focus on that."
"I m happy to have the opportunity to bring something back to France, and, to be blunt, keep this in the country, rather than have the technology go abroad."