|
Don't Worry—Q1 is Usually a Down Quarter
In the Northern Hemisphere, the first calendar quarter—January through March—also matches the celestial winter. For optics and photonics companies it's also typically a "down" quarter—a decline from the previous quarter. This is especially important to keep in mind this year. What may seem as an inauspicious beginning of a down year may just be the usual Q1 seasonal cycle.
The figure shows the Q4-to-Q1 revenue growth or decline for the companies that OIDA tracks, grouped into 8 sectors. The figure shows data for the past five winters, up to the winter of 2017-2018. They all show declines from quarter to quarter, with only a few exceptions. Some of it may be explained as a seasonal cycle associated with consumer holiday spending and end-of-year capital spending by companies that have fiscal years aligned with the calendar year. But the pattern is surprisingly consistent across all the sectors.
|
 Source: OIDA (2019), from company reports.
|
Recent stock market performance has been jittery, suggesting that Wall Street sees risk ahead, regardless of the actual performance in past quarters (see, for example, the November OIDA newsletter). Economists caution that there isn't underlying strength in the economy. China's growth is slowing. The threat of a trade war adds substantial risk. But we can also point to record low unemployment in the U.S., and innovation in multiple sectors that can drive growth in photonics (such as flexible displays, 5G networks, driverless cars, and directed energy). And the world may be in a low-growth mode for the indefinite future, but that's better than no-growth.
We all know that past performance is not necessarily an indicator of future behavior; this year could be different. But if 2019 is a typical year, we can expect revenues to decline in Q1. The question is whether it declines more or less than usual. It is still early in the year. We have the rest of 2019 to indicate where our industry is headed.
Top
OIDA's Position on Defining "Emerging Technologies" for U.S. Export Control
|
|
On 19 November 2018, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) published an advance notice of proposed rulemaking seeking public comments on a draft list of technologies that may be subject to additional export controls. This list serves both for export control and review of transactions to foreign ownership of and investment into U.S. companies. We recently reported on new rules regarding this review by CFIUS, the Committee on Foreign Investment in the U.S.
|
The notice (available here) sought comments regarding criteria for defining and identifying emerging technologies, specifically those currently subject to the Export Administration Regulations (EAR), but controlled only to certain classes of countries. The draft list of technologies is quite long, with many of the technology categories overlapping with optics and photonics. Examples include computer vision, quantum encryption, quantum sensing, quantum computing, additive manufacturing, and faceprint technologies, to name a few. The extended deadline for comments closed on 10 January 2019 (see here).
The Commerce Department is not seeking to expand jurisdiction over technologies not currently subject to the EAR, or to alter existing controls already described in the Commerce Control List (CCL). Also, it is treating emerging and foundational technologies as two separate types of technology. It will issue a separate notice regarding identification of foundational technologies that may be important to U.S. national security, for review in early 2019.
The Commerce Department received over 200 responses, including one from OSA that noted OIDA's unique position to participate in a more complete evaluation of the optical technologies listed in the notice (see here). OSA also signed a joint comment that addressed quantum technologies, with several other organizations affiliated with the National Photonics Initiative (NPI, see here).
The Information Technology & Innovation Foundation (ITIF) response (here) expressed a common position, recommending that the government exercise caution to extend export controls to emerging technologies. The ITIF argues that the U.S. position in emerging technologies today is different from decades past, and expanding export controls too broadly would cut the U.S. off from important research and markets in an increasingly international ecosystem. The ITIF argues that the government should instead focus on the forced transfer of know-how through mercantilist policies. (See also the December OIDA newsletter for a related item on tighter rules on foreign ownership of U.S. companies, here.)
The Commerce Department will archive the responses, but it's not clear whether it will submit its own reply to the Treasury Department, which chairs CFIUS. The Treasury Department is not bound to closely regard the responses. (For more on the responses, see here.)
Dr. Greg Quarles represents OSA/OIDA and the optics and photonics community on the U.S. Commerce Department Sensors and Instrumentation Technical Advisory Committee (SITAC), and OIDA is monitoring this development. For questions, please contact Greg Quarles at gquarles@osa.org.
Top
How Do You Create a Photonics Supply Chain?
|
 Source: Vectorstock
|
The photonics industry loves to talk about technology, but not as much about how to manufacture it. Technologies like integrated photonics and quantum communications sound cutting-edge and cool. But developing the supply chains to make the products? Not so much. Yet, companies face these challenges all the time. Small companies often have difficulty finding suppliers who will accept their orders. Or if one does, it may be merely willing to manufacturer a part to a specification, but it won't work with the startup to design it for manufacturing.
|
So how does one go about creating a photonics supply chain? One approach is to find a foundry to fabricate wafers, other partners to assemble and test the parts, and you (or your company) design some of your own equipment, if necessary, to fill the gaps missing in the manufacturing process. This loosely describes the approach of Luxtera, one of the first integrated photonics manufacturers.
Aurrion's approach utilized a foundry and made the manufacturing process as compatible as possible with existing commercial manufacturing equipment. This requires some design compromises, but can save development time and money to get the product to market.
Other companies are more vertically integrated. Intel leveraged its existing silicon manufacturing infrastructure to enter the silicon photonics market, eliminating the need for an outside foundry.
Infinera committed early on to being its own InP integrated photonics chip manufacturer by bringing the best practices of silicon electronics manufacturing to InP chip manufacturing. It also chose to be vertically integrated from chip to system. Some companies brought their suppliers inside. Cisco announced in December that it would buy Luxtera in a $660 million deal. Cisco previously bought Lightwire in 2012 for $271 million. Juniper Networks acquired Aurrion in 2016 in a $165 million deal.
There are now many small companies entering the integrated photonics ecosystem looking to create new products. The right supply chain strategy will vary from company to company. OIDA will be discussing this supply chain challenge at an upcoming workshop on 3 March, collocated with OFC 2019 in San Diego. The workshop will be the ninth in a series organized with the university center CIAN on current issues in optical communications. See here for more information on the workshop.
Top
Welcome New OIDA Members
Top
Member Benefit of the Month: Business Development
OIDA Members receive discounted rates on exhibit registration at OSA Congresses & Topical meetings and OSA Frontiers in Optics. In addition, members receive 15% off print and digital ads in Optics and Photonics News.
With an OIDA membership, everyone in your company has access to premium benefits that will fuel success and establish connections with OSA's customers worldwide. Take advantage of your OIDA member benefits! Not a member? Contact oida@osa.org or call +1.202.416.1474
Top
Attend OIDA Executive Forum & Solve Your Network's Toughest Business Challenges while Increasing ROI
4 March 2019 at OFC, Hilton San Diego Bayfront Hotel, Indigo Ballroom, San Diego, CA, USA
Maximizing your technology investments and positioning your company for success is challenging when investments can take years to pay off. Attend OIDA Executive Forum and join industry leaders from top companies as key innovations are assessed and profitable business strategies are fully debated. Meet C-Level speakers from major companies like Apple, Windstream, Nokia, Arista Networks, Huawei, Finisar, Telecom Italia and more.
Meet top industry leaders including:
|
Keynote Presenter:
Ron "Buddy" Bayer,
Chief Network Officer, Windstream, USA
|
Shamim Akhtar,
Chief Optical & RF Network Infrastructure Architect, Apple
|
Basil Alwan,
Co-President of IP/Optical Networks, Nokia, USA
|
Lucy Lombardi,
Telecom Italia, Italy
|
View all the Speakers
Registration Includes:
Register now. Exclusive for OIDA Members: Buy 1 discounted registration and bring a customer or colleague for free!
Top
Final Program & Speakers Announced for OIDA Workshop on Manufacturing and Building the Supply Chain for Integrated Photonics
3 March 2019 at OFC, Hilton San Diego Bayfront Hotel, Indigo Ballroom, San Diego, CA, USA
Around the globe, advanced technological capabilities in integrated photonics have been established to address the massive commercial opportunities in communications, sensing and medical devices. This OIDA Workshop at OFC will examine these capabilities, which include component design, fabrication, packaging and testing. Invited speakers will discuss their first-hand experiences in establishing a manufacturing supply chain, the challenges they faced along the way and insights on emerging trends.
Learn about new opportunities. Network with the top experts in the field. Attend five presentation sessions, breakfast, lunch, poster display, and special evening networking event.
Speakers Include:
|
Keynote Presenter:
Peter De Dobbelaere,
Vice President of Engineering, Luxtera
|
Keynote Presenter:
Hong Hou,
Vice President, Data Center Group $amp General Manager, Silicon Photonics Division, Intel
|
Keynote Presenter:
Jan Vardaman,
President & Founder, TechSearch International, USA
|
This workshop will be critical for understanding the trends in manufacturing photonics, both in the technology and business models.
The workshop is not included in your OFC registration. Register for the workshop now.
Top
OFC Career Zone is Live — Employers and Job Seekers Create Your Account Now
The OFC Career Zone is where job seekers and employers from all areas of optical communications connect. Check out OFC Career Zone Online and create your account today!
Be sure to also participate in our Onsite OFC Career Zone Live at OFC, San Diego Convention Center, 5-7 March 2019.
Questions: contact careerzone@ofcconference.org or +1.202.416.1942
Top
PR Planning for OFC
The OFC PR Team is here to support you and your organization! We provide our exhibitors with public relations and social media information, opportunities including OFC First News (deadline 20 February) and the Breakfast Briefings program. Make sure to register your organization's PR and/or marketing contact to receive the OFC Exhibitor PR Newsletters, deadline reminders, media opportunities and the advanced pre-registered media and analyst list. We also offer the 2019 PR Toolkit that will walk you through the FREE PR opportunities available to exhibitors. Join us on social media today and stay in the loop on the latest conference updates, topics and trends. Follow us on Twitter @OFCConference (#OFC19), LinkedIn and YouTube.
Join Us at the OFC Reception for Media/Analysts & Exhibitor PR/Marketing Professionals: Tuesday, 5 March, 17:00-18:30, San Diego Convention Center, Room 5B. RSVP to OFC@wilkinson.associates.
Top
Amplify Your Sales — Become an OIDA Sponsor!
Through OIDA programs and events, industry leaders gain access to quality information, an unparalleled professional network, and countless opportunities for collaboration. A wide variety of sponsorship opportunities are available to provide optimum exposure for your company at each OIDA event. Raise your company's profile in front of these key customers by becoming a sponsor today.
Sponsorships offer different levels of exposure and include registration passes to the events. For detailed information on packages and pricing, please contact oida@osa.org or call +1.202.416.1474.
Top
Call for Nominations — Paul F. Forman Team Engineering Excellence Award
Nominations for the Paul F. Forman Team Engineering Excellence Award are due 10 July. This is a great opportunity to highlight the value and importance of engineer teams! The award recognizes technical achievements such as product engineering, process and software development, and patent development, as well as contributions to society such as engineering education, publication and management, and furthering public appreciation of optical engineering.
Top
Present Your Applied Industrial Optics Research on 8 — 10 July 2019
The OSA Applied Industrial Optics Topical Meeting (AIO) is where researchers and professionals from diverse backgrounds gather and discuss photonics research, technology development, and commercialization. Here, industry leaders can stay informed of the latest advances in photonics technology. AIO creates an engaging multi-disciplinary program that encourages the sharing of ideas and generates cross-pollination across fields. Through workshops, tutorials, and panel discussions, AIO grants unprecedented access to industry experts and insight into today's commercial climate. It offers a unique atmosphere that is both informative and interactive, providing a forum for tomorrow's photonics leaders to meet, collaborate, and innovate. Submit your research for consideration by 13 March 2019 (12:00 EDT / 17:00 GMT). Learn more.
Top
|
OIDA (OSA Industry Development Associates) Council
Thank you to the volunteers who oversee the programs and services available to the Industry Community.
|
• Claudio Mazzali,
Corning Research &
Development Corp, Chair
• Simin Cai,
Go!Foton, Chair Elect
• John Dexheimer,
LightWave Advisors, Inc.
|
• Turan Erdogan,
Plymouth Grating
Laboratory, Inc.
• Amy Eskilson,
Inrad Optics
• Christoph S. Harder,
SwissPhotonics
|
• Inge Kabert,
Thorlabs Inc.
• Frederick J. Leonberger,
EOvation Advisors LLC
• Debbie Wilson,
Lumentum Operations Inc.
|
|
|
|
|
