Pirelli SpA is back in the optical components business, preparing tunable devices expected to hit the market next year (see Pirelli Goes to ECOC).

The company exhibited at ECOC this week for the first time since the 2000 sale of its components operations to Cisco Systems Inc. (Nasdaq: CSCO) and Corning Inc. (NYSE: GLW). (See Cisco Completes Pirelli Purchase, Corning Expands Components Empire, and Corning Buys Cisco's Pirelli Share.)

Giorgio Grasso, CEO of Pirelli Labs, was responsible for the businesses sold and even went to Cisco briefly as part of the deals. Back at Pirelli Labs, he's taken charge of the company's next wave of photonics research, building his operation from scratch during the past 18 months. The photonics R&D group now numbers about 45 employees, based in Milan, Italy.

Pirelli's new research focuses on photonic crystals, which are able to bend light at sharp angles without causing huge losses (see Out of the Lab: The Hole Thing and Out of the Lab: Twisty Crystal). It's an area that's attracted a host of university researchers and a smattering of startups, such as Luxtera Inc., Mesophotonics Ltd., Photeon Technologies GmbH, and Silicon Optics Inc. Another startup, Galian Photonics, hung up its spurs early this year (see Headcount: Snow Day).

Pirelli plans to offer products that combine Pirelli Labs' photonic-crystal passive devices with other elements such as lasers.

Why get back into photonics? Like others, Pirelli sees promise for photonic crystals to make components smaller and cheaper: smaller, because the material permits bent waveguides; and cheaper, because the manufacturing involved uses equipment already sold to semiconductor makers.

Pirelli also has tight relations with Telecom Italia SpA (NYSE: TI), giving Pirelli Labs a sounding board for its ideas. "We are doing some work with Telecom Italia, to work out how the technology can enable new applications," Grasso says.

At ECOC, Pirelli presented a tunable laser expected to sample in November, with general availability in 2004. That's expected to be followed by a tunable OADM, due to sample in the second half of 2004. In a different market, Pirelli is also designing a triplexer for passive optical network (PON) termination; that product won't sample until the end of next year, Grasso says.

Pirelli demonstrated the tunable laser operating in the C-band, although it could also handle the L-band, Grasso says. Pirelli showed the laser staying within 100 MHz of its target frequency without the use of a feedback loop -- well within the 1GHz margin required for 25GHz DWDM spacing.

— Craig Matsumoto, Senior Editor, Light Reading