Firms Working in Optics Technology Play to the Southland’s Strengths
A new company in Long Beach, D-Star Technologies, is installing laser equipment to produce light-wave amplifiers for Internet networks--and is quietly demonstrating why Southern California will continue to develop industries based on human ingenuity and the advances of science.
This month D-Star begins shipping its amplifiers to customers, yet already demand is outrunning the firm’s ability to meet it.
Other Southern California companies are involved in construction of a broadband Internet network based on light waves--including Agere Systems in Irwindale (formerly Lucent Technologies’ microelectronics division), Newport Corp. in Irvine, Optical Micro Machines in San Diego and Integrated Micromachines in Monrovia. They too are being forced to work overtime to keep up with changing technology and demand for their products.
Many will appear next month at Optix 2001: Toward the Photonic Internet, a Pasadena conference that will bring together 50 fledgling companies, scientists from local universities--including UC Santa Barbara and Caltech--and venture capital investors from all over.
The budding optics industry is the kind of industrial innovation that is scarcely noticed amid debates and prognostications about the slowing economy.
“The optics industry is attracting phenomenal amounts of venture and private equity investment even as public stock markets downgrade optical Internet companies,” says Richard Shaffer, head of Technologic Partners, a New York-based consulting firm that is putting on the Pasadena conference. “There is a decoupling of public and private markets.”
It is also the kind of industry that highlights Southern California’s advantages--its educational institutions, diverse industrial capabilities and availability of skilled labor.
D-Star embodies those advantages. The company owes its existence, and its present name, to Dmitry Starodubov, a 30-year-old physicist who came from the Russian Academy of Sciences to do postdoctoral work at USC five years ago. There he teamed with Jack Feinberg, professor of physics and electrical engineering, and together they perfected a new method of working with lasers and optical cables that allows light waves to carry more information faster and more efficiently.
In 1998 they formed a company with the aid of a $500,000 small-business grant from the U.S. Air Force. And last year they received a $5-million investment from Redpoint Ventures, which allowed them to buy eight laser systems--production tables in which lasers are mounted on cylinders of nitrogen (supplied by Newport of Irvine) to impress holograms on glass fibers so that multiple light waves, each differentiated, can carry greater amounts of data.
The optical amplifier D-Star produces is one component of systems still evolving that will facilitate the Internet of tomorrow, in which industrial processes and medical diagnoses--or more romantically, family visits--will be carried out on the Internet.
It is the dream of Starodubov and his colleagues that the optical component industry of today will evolve like the semiconductor industry over the last 30 years, going from simple integrated circuits to computers-on-a-chip that today power cellular telephones, laptop computers and thousands of other devices.
And it’s more than a dream. The early products of optical manufacturing, such as D-Star’s first product, are expensive--the amplifiers shipped in lots of thousands to customers such as Agere, SDL Corp. of San Jose and the London-based firm Marconi will cost $500 to $650 apiece, reports Andre de Fusco, D-Star’s chief executive, who came to the new company from a stint as CEO of ACT Networks of Camarillo. “But prices will come down as manufacturing becomes automated, as it did in semiconductors,” De Fusco says.
The focus on manufacturing is one reason optics is not a mere “dot-com” phenomenon, Shaffer says. “It’s a real industry that demands great scientific and technological know-how and manufacturing ability,” he says. “The applications for optical networks are known; the only question remaining is whether these companies can scale up the manufacturing.”
That reliance on technical know-how and manufacturing ability makes optics an ideal industry for Southern California, which has pioneered military aircraft, space exploration and so many other technical industries.
This region’s companies were pioneers of optical electronics for aerospace--including Rockwell in Anaheim, TRW Inc. of Redondo Beach, Ford Aerospace in Newport Beach and Hughes Aircraft. Fittingly, the laser itself was invented at Hughes in 1961.
And just as the region’s academic prowess contributed to its preeminence in aerospace, so today optical technology is a subject of research at UC Santa Barbara’s Optical Switching Center and at UCLA, Caltech, UC San Diego and USC.
In fact, USC’s optical computing department has spawned two other Redpoint-backed companies in addition to D-Star, venture capitalist Brad Jones of Redpoint Ventures reports. One of those firms, Multilink Corp., which is now based in Somerset, N.J., also received investment from TRW.
The legacy of aerospace also gives the area a supply of technically knowledgeable employees, says De Fusco of D-Star. The company, which has 18 employees, hopes to hire 80 more this year, from technicians who start at $13 an hour to engineers with doctorates.
Innovation and pioneering will not entirely protect Southern California from the effects of widely predicted slowdowns in the U.S. and global economies.
But seeds of future industrial strength are being planted in the work going on in university laboratories and newly opened factories.
“We do not see a slowdown in optical component growth,” says James Jungjohann, an investment banker with CIBC World Markets who has raised investments for several firms in this area. “We are still in the first innings of this optical wave--as photons replace electrons in the networks.”
Technology waves, a Southern California tradition.
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James Flanigan can be reached at jim.flanigan@latimes.com.
