When NanoOpto met SpectraSwitch, optical component sparks flew

SOMERSET, N.J., March 26, 2003 — A new device, structured like a square Oreo cookie, balances the power of laser beams shining through an optical fiber.

But the partnership between NanoOpto Inc. and SpectraSwitch Inc. that produced their new variable optical attenuator (VOA) has a “you’ve-got-chocolate-in-my-peanut-butter” quality to it.

The two young companies came together through a mixture of chance, opportunity and timing. Moreover, their collaboration suggests that to survive, small tech startups must be willing to work with each other in new ways.

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First, what is it? A VOA is a component in optical networks that operates like a dimmer switch for laser light. To prevent multiple laser beams in an optical fiber from interfering with each other, the intensity of all the light streams, measured in decibels, must be equalized.

Bill Zakowski, NanoOpto’s director of business development, explained that hundreds of thousands of such VOA devices costing as much as $200 each serve this power-leveling function in optical networks as stand-alone units. Currently, VOA devices have many parts that are typically assembled by technicians using tweezers and magnifying glasses.

NanoOpto uses a nanoimprinting process to make optical components such as polarizing filters useful in VOA applications. SpectraSwitch, based in Santa Rosa, Calif., has been working with advanced liquid crystal technologies for use in optical systems since 1996.

With the collapse of the telecom market and demand for the optical switches SpectraSwitch was developing, the company was seeking new applications for its specialized LCD technology. While simpler LCD technology used in PDAs or laptop screens produce contrast ratios of about 400:1, optical systems require the 40,000:1 contrast ratio that SpectraSwitch’s liquid crystal wafers offers.

Before joining NanoOpto last year as vice president of marketing and sales, Hubert Kostal had worked at SpectraSwitch and was the first to suggest how the LCD wafer and nanopolarizer could complement each other. “He was the glue that got us going,” said NanoOpto Chief Executive Barry Weinbaum.

The two companies quickly formed an alliance to co-develop and co-market a VOA that integrated the two technologies. The resulting product, the Lambda Processor, was introduced Tuesday at the Optical Fiber Communication Conference and Exhibition in Atlanta.

According to Weinbaum, the new VOA device is the product of two silicon wafer-based, high-volume processes that will enable it to be less expensive than existing products. The VOA is also small (5 mm x 3 mm) and thin (1.4 mm thick) enough to be integrated inside an optical laser. Moreover, the device has no moving parts to wear out and should be able to tolerate extreme temperatures or high humidity.

The partners said they have already distributed product samples to prospective customers.

SpectraSwitch Chief Executive Lindsay Austin said that economic necessity was a mother of the Lambda Processor’s invention. Austin decided that with the telecom market stuck in limbo, his company needed to focus on next-generation product development to be ready when the industry rebounded.

The personal connection through Kostal enabled the two companies to develop a relationship that allowed them to move forward with a simple memo of understanding, rather than a laborious 500-page contract. “We’re more like a virtual joint venture than a formal one,” Austin noted. He said that a full-fledged joint venture would have created three corporate entities that would only slow the group’s goal of getting a product to market as quickly as possible.

The VOA device — a high-volume, relatively simple product with immediate market demand — is the first of what the companies think could become a family of nanotech/LCD hybrid components such as tunable filters.

As the product was developed, the companies agreed to share just enough about each other’s intellectual property to enable their engineers to understand how the technologies could come together. Today, NanoOpto’s polarizers are shipped while still on production wafer to SpectraSwitch’s fab for final dicing, assembly and testing.

Austin and Weinbaum, respective veterans of JDS Uniphase and Lucent, agreed that two startups working together was new and unusual, especially for a product meant to satisfy the tall demands of telecom equipment buyers. But they agreed that to succeed in today’s tough climate, they had to be open to new business relationships and willing to take some risks.

Through mutual due diligence, they also had to develop confidence in each other’s management, financial support, and underlying technology.

Peter Bernstein, president of Infonautics Consulting in Ramsey, N.J., has followed NanoOpto’s development and believes that the pragmatism underlying the companies’ collaboration is “a key driver of innovation today.”

“By dramatically reducing the cost of the VOA and making them easily mass-producible with high performance, [NanoOpto and SpectraSwitch] have shown that small company collaboration can yield impressive results,” he said. Bernstein added that such creative business partnerships should help “hasten the day broadband connections to the home will become affordable and commonplace.”


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