GaAs diode firms pump up competition

Changes are afoot in the world of GaAs 980 nm pump laser diodes. One company says that its sales have grown so much that it has advanced to the top spot, while an upstart says that it is set to cut into this lead in 2009. Yet the overall market value is growing only modestly, and the world is experiencing the second recession in a decade. The first one had a catastrophic effect on the optoelectronics industry, so how can the sector host such grand ambitions?

One factor is that the major players in this market – Bookham, JDSU and Furukawa Electric – are now vying with a very vocal competitor, 3S Photonics. The company, also known as 3SP, says that it is taking business from its vertically integrated rivals and is ramping up its output. Surprised by the level of interest in its InP transmission lasers, the French fab began offering GaAs-based 980 nm pump lasers for the terrestrial market in mid 2008. Production is accelerating and is destined to be a key part of 3SP s plan to expand its revenue by 20% in 2009.

"JDSU and Bookham are also manufacturing optical amplifiers," explained 3SP s director of marketing, Yannick Bailly. "That causes problems for some of the customers." He believes that his company s ability to avoid such a conflict of interest provides it with a strong competitive opportunity. "The market is demanding alternative supply solutions," he said.

This marks the next stage in the ex-Alcatel and Avanex III-V fab s strategy. It is now expanding from the product lines that it started business with in June 2007, when 3SP was divested from Avanex. Then, its original aim was returning to profitability from its submarine pumps and transmission lasers.

Much of the company s revenue still comes from pump lasers for the submarine optical communication market, targeting major undersea backbone links. This comparatively stable sector is helping 3SP to weather the global economic storm. "We have very good visibility in the submarine market to the end of 2010," Bailly explained.

The high-reliability GaAs laser-diode technology that it uses in submarine pumps was crucial in developing its latest 980 nm products, and also enables 3SP to make uncooled terrestrial pumps. Although the French firm has recently entered this market, Bookham boasts that it still makes nearly all of the uncooled 980 nm pumps sold in the world today.

"That s been a really important product for us," explained Mark Ives, director of the line solution business that sells Bookham s pump lasers and amplifiers. "It s becoming increasingly important to amplifier designers. As more people deploy 40 and 100 Gbit/s communications there s a need for very small, low-cost, single-channel amplifiers."

Running without a thermoelectric cooler shrinks the package size of Bookham s products, and cuts energy consumption and running costs. The company s ridged-waveguide GaAs diode chips enable this advantage, ensuring that efficiency drops much less at higher temperatures than competing designs.

These chips, made in Bookham s Zurich, Switzerland, fab and packaged in Shenzhen, China, are set to reach new highs in power during 2009. By continuously improving its manufacturing processes, Ives says that the company will be able to change its diode binning strategy to include a record output product line. "The highest power today is 275 mW," Ives said, "and our intention is to launch a product that will offer rather more power than that."

Now, whereas 3S Photonics is moving from submarine pump lasers to uncooled terrestrial pumps, Bookham is making good a move in the other direction. It qualified production of its OceanBright 980 nm submarine pumps late in 2007 and has secured a long-term supply deal with key undersea amplifier maker Tyco. Ives says that strategic agreements are now in place with another major submarine player that will grow its market share in the sector.

As Bookham steps up its own expansion into 3SP s staple market, Ives is unperturbed by the French company s claims that vertical integration is a disadvantage. "Our customers value our technology and are compelled to work with us," he said. "Pumps are viewed as being such critical items in the amplifier that very often the customer that the manufacturer sells to will dictate which pump should be used."

Outside of the niche submarine and uncooled markets, Ives says that Bookham claimed several key terrestrial 980 nm pump design wins in 2008. The contribution of these extra sales and its uncooled products has helped pump revenue to increase by 30% year-on-year. "We believe that has positioned us as the market leader in terms of revenue for terrestrial pumps," Ives claimed.

This might surprise Milpitas, CA, pump laser manufacturer JDSU. "We continue to ship twice as much as our nearest competitor and four times as much as the next competitor," said Toby Strite, director of high-power laser marketing at the company.

"3S Photonics isn t even on our radar." He also claims that JDSU leads the way in submarine pump sales, thanks to technology bought from TriQuint. This market was one of the most badly affected by the technology crash at the turn of the century, and when sales began to flow again as recently as 2006, JDSU had a qualified pump laser ready to go.

He points out that, as important as Bookham considers uncooled diodes to be, JDSU believes that they only represent 5% of the total market for pump lasers. "We determined that this platform cannot compete on cost," Strite said. "The few dollars saved on the cooler are gobbled up by much larger costs of poor production yields and added testing requirements."

Instead of selling uncooled lasers, JDSU is producing pumps operating at 45 °C that keep manufacturing costs down. Strite says that maintaining a fixed but elevated temperature reduces testing and yield problems associated with uncooled diodes and allows the use of cheaper coolers. The firm will introduce 550 mW pumps from this line this year.

During 2009, JDSU will be continuing to lower the cost of packaging its 980 nm pumps, working to reduce the expense of manual processes like fiber alignment and soldering. "Optics for telecommunication, while a large market, is not large enough to automate," he pointed out. For this reason, JDSU s research in this market is now focused on packaging rather than chip development. "As long as 980 nm pump lasers have been around there s been an 80/20 split between the package and chip costs."

As for the French company seeking to cut into its market share, Strite s outlook is circumspect because 3S Photonics is also a supplier to JDSU. He points out that everybody is feeling the effects of the current economic climate and in the ultra-competitive optical communications market you need to take your advantages where you can.

"We are proud to have 3SP as one of our fiber-Bragg grating suppliers, despite their obvious desire to compete with our 980 nm product leadership," he said. "These are challenging times in which companies only succeed by partnering with the best available vendors. We don t have the luxury of considering whether our vendors covet our market position."   

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