Scotland: strength in depth
Scotland has a long history of optoelectronics-related research, originally for defence applications. For example, Barr and Stroud, founded in 1888, developed military optical systems, becoming Pilkington Optronics in 1988 then Thomson-CSF Optrosys in 1999 then, in 2001, Thales Optronics. But what became the largest concentration of opto-electronics research in the UK has also bred numerous commercial applications.
In 2002, Scotland had 12 universities involved in opto research, many with complementary centres of expertise: Edinburgh's Heriot-Watt (MEMS, nanotech, lasers, materials, mm-wave), Napier and Edinburgh (MEMS, microdisplays, sensors; home to the Scottish Microelectronics Centre), Glasgow's Strathclyde (MEMS, III-V materials, polymers, lasers, microdisplays; home to the Institute of Photonics and Kelvin Nanotechnology), Caledonian and Glasgow (nanotech, integrated opto ICs, III-V materials), St Andrews (polymers, lasers, mm-wave; home to the Photonics Innovation Centre and Ultra-fast Photonics Collaboration), Aberdeen, Dundee's Abertay and Dundee (displays, organometallics; home to the Advanced Materials Centre), and Paisley (home to the Thin Film Centre).
Together these employ 450 researchers, take half of UK opto research funding, and generate 500 graduates per year (half the UK total).
Scottish universities also have links with opto research institutions world-wide. Indeed, in November 2003 Glasgow will host the IEEE/LEOS annual conference — the first outside North America.
Scotland's electronics industry employs 41,000 people (including Europe's largest concentration of semiconductor manufacturing) plus 29,000 in the supply infrastructure — an ample base for opto R&D to be converted into manufacturing.
The Scottish Optoelectronics Association (SOA) was launched in 1994 to "stimulate the economic growth of Scotland through the knowledge, manufacture and application of optoelectronics". It is funded by over 85 members (companies, universities and research organisations), the European Regional Development Fund (ERDF) SME initiative for Lowland Scotland, and development agency Scottish Enterprise.
Scottish Enterprise aims is to develop Scotland's science/technology business creation and workforce to support the micro, opto, comms and information industries. Initiatives and support include:
- Proof of Concept (for university researchers to commercialise R&D);
- Enterprise Fellowships (to develop entrepreneurs);
- Qualifications (Photonics Eng Doc and MScs in Photonics and Displays).
Scottish Enterprise also has its own optoelectronics team, working closely with the SOA, which can: help new firms start up; advise on business development; help commercialisation of new products and services; help attract foreign investment and export services/products or ideas; advise on training and recruitment; help with access to funding; and advise and assist on locations and commercial property.
Indeed. each year several opto start-ups are created, many pioneering new optical communications components (see page opposite).
According to Dr Terry Christmas, responsible for optoelectronics in Scottish Enterprise's Microelectronics, Optoelectronics and Communications Technology (MOCT) team (and SOA vice chairman), opto activities in Scotland involve more than 60 companies and 4000 employees. According to the SOA and Scottish Enterprise, revenues rose from £150m in 1993 to £352m in 1997, £500m in 1998, £575m in 1999 and £600m in 2000 (out of a total £100bn global opto industry).
But with the telecoms industry in overcapacity, RHK says that global sales of optical components dropped by 40% last year while the SOA's estimate for 2001 sales is not much different from £600m. Christmas told Lightwave Europe that the target set in 2000 to grow this to £1.6bn by 2005 is now "unlikely". Defence and medical sectors offer better near-term opportunities. Nevertheless, he is "still confident" of the targets of £5.5bn in sales and over 10,000 employees by 2010.
Since it is more difficult for start-ups to raise capital for applied research as funds are concentrating on existing portfolios, Scottish Enterprise's latest project is the Advanced Packaging Initiative, to be based in West Lothian. Its vision is "to create an enabling institute for advanced system integrated packaging which provides manufacturable packaging solutions for the new emerging and converging electronics and optoelectronics industries". Additional funding from the ERDF was approved at the end of January. The aim of is to develop closer links with the customer base, says Christmas.
· In 1998 Kymata Ltd was spun out of Southampton and Glasgow universities to produce planar and MEMS-based passive optical components based on silica-on-silicon waveguides in Livingston. Shareholders included IBM, plus £120m from 3i, ACT, FNI and other VC companies, while BT licensed patents for DWDM component processing in exchange for a 13.79% stake. In January 2001 Kymata tripled production capacity, increasing staffing to 400.
Kymata was then bought for EUR134m by Alcatel Optronics, which gained "at least two years in time-to-market for planar products," said CEO Jean-Christophe Giroux — "a crucial step in our strategy of active/passive integration." That October it cut 90 jobs in Livingston. Nevertheless in September 2002, as part of a Strategic Refocus Plan, Alcatel consolidated to two manufacturing plants: Nozay (France) for actives and Livingston for passives, with both combining for hybrids.
· Photonic Materials was spun out of Strathclyde in 1999 to manufacture oxide crystals for DWDM applications. Funding of £14m came from 3i, Intel Capital, Royal Bank Ventures, Scottish Equity Partners and New Focus' founder Milton Chang with support from the Scottish Executive, Scottish Enterprise and the Royal Society of Edinburgh.
· The Crystal Consortium, based in Glasgow, was founded with £0.3m funding by Strathclyde, DERA (now QinetiQ) and Scottish Enterprise for opto, piezoelectric and scintillator crystal growth process development.
· Intense Photonics was spun out of Glasgow University in May 2000 by co-founders professor John Marsh (chief research officer) and Dr Craig Hamilton (chief strategy officer) with an exclusive license on impurity-free quantum well intermixing fabrication. In June 2001 £7.75m first-round funding came from 3i and ACT. In March 2002 Photonic Materials' board member Peter Bordui was made a non-executive director to identify application areas and build awareness of the technology.
That July Intense bought DuPont Photomasks (UK) Ltd for its plant at Hamilton International Technology Park, with capacity for several thousand integrated optical devices/month. Products are made from both gallium arsenide (980nm pump laser arrays for EDFAs and EDWAs, demonstrated at March 2001's OFC) and indium phosphide (lasers, receivers, electro-absorption modulator with integrated SOA).
In August 2001 Intense received an 18-month £450,000 Scottish Executive SpurPlus grant to develop a monolithic packet switch for all-optical networks and at ECOC 2001 demonstrated a prototype PIC building block.
Last October Intense closed a £11.25m series B round led by Cazenove Private Equity with a syndicate of 3i and ACT plus FNI, TTP Ventures and Alice Ventures, bringing total funding to £21.25m. While maintaining outsourced packaging and assembly for volume manufacture, in January Intense added 95m2 of cleanroom for extra life-test, assembly and packaging development for prototyping and product qualification.
Scottish Enterprise's CEO Robert Crawford said: "I am delighted to see a Scottish-based high-technology company continuing to invest and develop despite the highly challenging technology marketUScottish Enterprise Lanarkshire continues to support the company as it moves into a new and exciting phase of its development."
· Compound Semiconductor Technologies Ltd was formed in 1998 by Strathclyde, Glasgow and Scottish Enterprise in the West of Scotland Science Park for incubation of start-ups, technology transfer, and III-V opto foundry. In December 2001 it won USD5m second-round funding from a consortium led by European Digital Partners and including Intel.
CST's device library includes: 1550nm gain blocks, SOAs and lasers; 1310nm lasers; 980nm pump lasers; and 780nm and 635nm lasers. In January it expanded into devices involving multi-growth processes by launching customised 2.5–10Gbit/s DFB laser fabrication.
· Kamelian Ltd was founded in July 2000 by CEO Paul May, CTO Ivan Andonovic (broadband networks professor at Strathclyde University) and COO Tim Bestwick (ex-director of technology strategy for Bookham). About £1m from 3i enabled it to start design and prototyping of InP-based semiconductor optical amplifier products at CST. Six months later it raised £12.6m (£6.3m from 3i plus funds from the USA's Lightspeed Venture Partners) mostly for a £9m, 20,000ft2 facility near Oxford (which began full production in early 2002). Kamelian has since also agreed a £5.25m convertible debt financing with Goldman Sachs.
At last March's OFC 2002 Kamelian launched commercial products — 1550nm Optical Pre-Amplifiers and Optical Power Boosters in 14-pin butterfly packages — compatible with the multi-source agreement between Kamelian, Alcatel Optronics and JDS Uniphase. At September's ECOC 2002 it launched a 4-channel 1550nm SOA array and 1310nm SOA.
"Future products will integrate gain with other functionalities," said May. A collaboration has combined high-gain, low-noise SOAs with the InP-based waveguide-integrated ultra-fast photodiode of Berlin's u2t Photonics to demonstrate a 40Gbit/s receiver, eliminating TIAs.
· In 1998, aided by a SMART award, Heriot-Watt spun out Terahertz Photonics Ltd in Livingston for liquid-phase deposition of silica and polymer waveguide materials for planar lightwave circuits. Scottish Equity Partners and ADD Partners provided £3m in VC funding in August 2000, followed by £6m in January 2001 to scale processing in a new plant, boosted by a Spurplus award of £450,000 from the Scottish Executive Enterprise & Lifelong Learning Department (SEELLD) plus a £105,000 SMART award. However, in late 2001 Terahertz refocused from selling devices to licensing materials and process technology.
In March 2002 Terahertz unveiled its SOLICA process, the first single-step sol-gel process for 10µm-thick layers and the first for silica-on-silicon PLCs. Being in the liquid regime also enables a wider range of dopants for more compact devices with more features. In July it extended its Truemode polymer for optical components to emerging backplane applications by revealing its Truemode BACKPLANE polymer, compatible with PCB making.
In August Terahertz opened its plant in Livingston. But in late November, after difficulties raising further funding, it said it was closing its optical device division, selling its specialist coatings division and cutting 13 of its 36 staff to focus on developing its remaining PLC materials division.
· In September 2002 Helia Photonics Ltd was founded by TeraHertz co-founder Dr Gerald Buller (CTO) and David Hamilton (CEO) — both ex-Heriot-Watt — with investment from Pergola International and Robert Samuel allowing it to buy Terahertz's coatings division and settle in Livingston. General managers include Paisley graduate Caspar Clark (Coatings) and St Andrews/Heriot-Watt graduate Dr Stuart Fancey (Devices).
Helia can take samples from the processed wafer level and offer cleaving, coating, characterisation and sorting from prototype to pre-production volumes and beyond (batches of >10,000) for laser makers.
· Founded in February 2002 in Bellshill by chief scientist Charles Ironside (Glasgow professor of Quantum Electronics) and CTO Dr Simon Hicks (ex-COO of Kelvin Nanotechnology), Essient Photonics' low-voltage resonant tunnelling diode technology is based on eight years' research at Glasgow. Early-stage support came from Scottish Enterprise and first-round funding of US$7m was led by Pond Venture Partners.
At September's NFOEC 2002 Essient announced its first product, the ultra-low-power InP-based EA-MDA-10G (Electro Absorption Modulator-Detector with Integrated Amplification at 10Gbit/s) and in December it appointed Ken Jones (ex-general manager of Vitesse's Advanced Transmission Division) as president, CEO and board member.