"Diversify or die"
Bookham Technology established itself as a specialist in the development of silicon-based integrated optical components. So why did it purchase Marconi Optical Components, a company with interests in more esoteric materials such as gallium arsenide and indium phosphide?
Silicon has been a successful integration platform for communications applications. The material offers functionality, reliability, manufacturability, devices of compact size and low power consumption, the ability to be customised and, above all, flexibility.
Bookham Technology was the first company to commercially manufacture integrated optical components based on silicon. Communications-related functions, such as signal generation, detection, routing and control, are now available on a single chip. This enables exploitation of volume production methods, speeding up what has traditionally been a manual process. Under the name ASOC, Bookham's approach enables network providers to build systems with advanced optical processing capabilities to meet the demands of internet traffic.
The optical industry has great influence over how the fibre-optic communications network develops. It can be a brutal industry; if there are too many component suppliers, particularly at a time when economic growth is slowing, then companies will fall by the wayside. The challenge is no longer solely to provide the components to support the growth of bandwidth. The key is to deliver bandwidth at the right price, in the right place and at the right time. There are several steps towards this goal.
Increasingly the integration and functionality of optical components seems to be the first step. The industry is demanding customisable products, so device makers are beginning to offer one-stop shops, producing not just components but a range of customised optical sub-systems. The words "diversify or die" come to mind.
In the industry as a whole, there will be a lot of turmoil over the next few months, with both winners and losers. The key is to provide what customers want, i.e. fewer suppliers with more relevance, offering cost reduction and a broad portfolio.
Today's customer-led market guided Bookham, at the end of 2001, towards its acquisition of Marconi's optical components business (MOC), in recognition that optical network manufacturers are increasingly demanding complete modular solutions, rather than discrete components.
The acquisition enhanced the position for fully integrated modular solutions, presenting two jigsaw pieces which slotted neatly together: MOC's expertise in active optical components; and Bookham's ability in integration and passive optical components. The requirement for fully integrated sub-systems incorporating active and passive components can now be realised. Bookham needed to broaden its product range; MOC was able to offer broad III-V semiconductor capability to deliver cost and size reduction with improved performance, greatly enhancing next-generation integration.
For Bookham this means three disruptive technologies that deliver intrinsic cost reduction, and a product portfolio ranging from the access layer of the network through to metro, high-speed and long-haul applications. MOC's products included fixed and tunable lasers, high-speed gallium arsenide modulators, transmitters, receivers and erbium-doped fibre amplifiers (EDFAs). Combining these with silicon-based optical components enables true end-to-end solutions throughout the network, taking integration to another level. The acquisition of MOC was therefore not a change in direction, but an acceleration from single components towards fully integrated systems. Bookham's new capabilities in automated mass production of both gallium arsenide and indium phosphide optical ICs complements its existing investment in silicon optical circuits.
The recent slowdown in the global economy will not ease the pressure in the optical components industry for technological advancement and innovative answers. The industry still demands fast and timely solutions. Using silicon as a platform, integrating functions on a single chip was the first step towards meeting customer needs.
The next step - using gallium arsenide and indium phosphide - brings these integrated components into systems, providing customers with a higher level of integration. The vision for the future is still a little foggy, but as long as solutions cut time, cost and complexity, they have great potential to be the next industry standard.
Giorgio Anania, President and CEO
Bookham Technology Giorgio.Anania@bookham.com