July in Tokyo is hot and humid, with the sky close and gray. It frequently rains. The weather must have been similar when Commodore Perry and his fleet of four warships sailed into Tokyo Bay in July 1853 and demanded that Japan be opened to foreign business. Within a few years, the ruling Tokugawa feudal state had collapsed, the emperor and a new government were in control, and after 250 years of near-complete isolation, trade with the outside world resumed.
Since then, and especially in the past 50 years, Japan has built an advanced economy by understanding market directions and customer needs. These facts were on my mind when I attended two July conferences on optoelectronics: InterOpto 2003, organised by the Japanese Optoelectronic Industry and Technology Development Association, and the Fiber Optic Forum, co-sponsored by WDM Solutions and Nikkei Electronics magazines.
At first glance, the omens were not favorable for a successful InterOpto, held as usual in the massive Makuhari Messe in the Tokyo suburb of Chiba. The global recession in high tech had combined with structural problems in the Japanese economy and fear of SARS to lower expectations. Indeed, attendance—i.e., the combined total of exhibitors and attendees on each day of the four-day event—declined to 15,500 from 19,300 last year. Exhibitors numbered 277, on par with last year, but the vast exhibit hall seemed sparsely populated. Still, the mood and number of new products on display showed an optoelectronics industry that is continually reevaluating and recasting itself in response to global competition, especially from China, and in anticipation of better times.
Perhaps the fact that the Tokyo stock market has been rising recently inspired the optimism. More likely the companies were adjusting to the slow telecommunications market and offering products aimed at new markets, including access and home networking, advanced metrology, and manufacturing.
As an export-driven economy, the recurrent questions from many Japanese exhibitors were, "When will bandwidth demand pick up in the United States and when will fibre to the home (FTTH) occur?" The Japanese FTTH market is quite hot, with between 300,000 and 400,000 subscribers already on board and fierce competition for service delivery between communications companies such as NTT and electric power utilities like Tokyo Electric Power Co., which takes advantage of its power-line infrastructure to deliver FTTH. Hoping to reap sales from FTTH by providing high-speed home and facility networking, FujiFilm Group was exhibiting its graded-index plastic optical fibre, Lumistar, along with a line of vertical-cavity surface-emitting lasers (VCSELs) for Gigabit Ethernet systems and an optical interface link to large flat-panel displays.
Other multinational corporations have continued to develop niche products outside their well-established product lines. The Nikon optical elements R&D section, for example, was exhibiting new thin-film filters for gain-flattening, edge, and CWDM applications (see Figure). Similarly, the ceramic R&D section of Toto has developed a new line of optical components based on its ceramic ferrules, which are also incorporated into optical products from other companies.
The Optical Comb Institute displayed its first product, the BK-SM625C ultra-precise, wide-span optical comb generator, which is based on direct phase modulation of light by a Fabry-Perot electro-optic modulator. The all-passive-component design measures optical frequency with very high accuracy and could help shift metrology standards from wavelength to direct optical frequency measurements. The company has been "incubated" at the Tokyo Institute of Technology and has delivered the technology to several telecom research labs and even a microwave astronomy facility.
Design and manufacturing issues for next-generation products were the focus of the Fiber Optic Forum, which drew over 120 engineers and managers. The single-most asked question at the forum—and by several multinational companies I visited in the Tokyo region—was, "Which form-factor design will win out and when?"
The question of whether 300-pin, XENPAK, XFP, or another design will rule is critical to the planning of these companies. It was addressed at the forum by Tom Hausken, director of optical communications components at Strategies Unlimited, a research group of PennWell. He sees a definite migration toward XFP for 10-Gbit/sec systems, but the pace is impossible to specify and the 300-pin form factor is clearly dominant now.
After 150 years, Japanese manufacturing companies lead the world by repeatedly asking these types of questions, developing high-value products, and taking the long view of their market positions. ..