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Amplifier Startup Hires Ex-Sorrento Boss

Light Reading
News Analysis
Light Reading
4/30/2002

Optical subsystem startup Dowslake Microsystems has a new president -- Xin Cheng, 46, the former CEO of Sorrento Networks Corp. (Nasdaq: FIBR). And sources say the matchup could be significant in more ways than one (see Dowslake Names COO, Prez).

First off, there's Cheng himself, who by all accounts is a first-rate optical engineer with a distinguished pedigree in DWDM -- even though he generated plenty of controversy as a manager in his tenure at Sorrento (see Xin Cheng, Founder, Sorrento ). His engineering talent in the past has been overshadowed by his heavy-handed attempts to run the business side -- with less-than-stellar results at Sorrento.

Indeed, as CEO of Osicom and then Sorrento, Cheng was sometimes accused of micromanaging his staff and putting the kibosh on their efforts to spend big bucks on marketing the company's wares (see Cheng Out at Sorrento).

Then there's Dowslake, a startup geared to making modular subsystems for use in DWDM products, founded by Dan D. Yang, who's made her own mark in EDFA circles (see Dan Yang's Next Big POP?). The two long-time acquaintances plan to expand Dowslake's product lineup.

Cheng says he feels like he's home again. "I'm familiar with building up companies," he says. "And this company isn't even starting from scratch. They've created an impressive foundation in little over a year."

But don't expect lots of flash. Yang, who sold her amplifier company, AFC, to JDS Uniphase Corp. (Nasdaq: JDSU; Toronto: JDU) in 1999, says she's content to stay out of the spotlight these days. And Cheng is known to eschew trendy marketing in favor of a more nose-to-the-grindstone sales approach.

Cheng's engineering leadership has always drawn heaps of praise. Sorrento's DWDM system is widely thought to be a top-quality product, competing effectively against offerings from Nortel Networks Corp. (NYSE/Toronto: NT) and ONI Systems Inc. (Nasdaq: ONIS).

Cheng can take credit for playing a leading role in Sorrento's product development. He began work on Wavelength Division Multiplexing (WDM) in 1988, as a senior scientist and director of advanced technology for a now-defunct subsidiary of Amoco Oil called Meret Technology, which became part of Osicom Technologies, then Sorrento Networks in 2001 (see Osicom Becomes Sorrento). The group overseen by Cheng was responsible for what became Osicom's and then Sorrento's commercial DWDM systems, starting in 1997.

At Dowslake, Cheng faces technical challenges that are familiar. Among other things, the startup is making credit-card-sized amplifier modules that Yang says provide more efficient amplification in DWDM gear at a fraction of the cost of alternative Erbium Doped-Fiber Amplifiers (EDFAs) or Semiconductor Optical Amplifiers (SOAs) . "We have made an amplifier four times smaller than last year's EDFAs and ten times cheaper," she says.

Dowslake's amplifiers, called Amplets, amplify small groups of DWDM channels selectively. This approach, sometimes called banded amplification, amplifies DWDM channels in small bands, eliminating the need for dynamic gain equalization -- whereby some amplified channels need to be attenuated, which boosts power consumption. The approach has been adopted by a tiny handful of startups, including Gemfire Corp. (see Gemfire Demos Multiport EDFA).

Yang says Dowslake already has realized revenues from the sale of Amplets and other integrated amplifier modules (see Dowslake Makes a POP and Dowslake Pushes Plug-Ins). As a result, she says, the 25-person company won't need to seek funding to break even. It has scored $10.3 million to date, half of which remains in the bank.

"In some ways, the recession helps the market to reevaluate the methods that are used," Yang says. "So many companies were created because they had a great idea, but many weren't practical." OEMs are now more than ready to try cheaper solutions like Dowslake's, she says.

She's thrilled to have Cheng join her at Dowslake, saying he gave advice to her many times during her AFC days.

"I probably did give her advice," Cheng says. "It's a small industry. I talk to and give advice to a lot of people."

Cheng's no-nonsense philosophy seems to be a good match for Yang's approach. He too is undaunted by the current economic downturn: "Things were much worse for fiber optics in 1993, much worse than they are today. I'm not scared of challenges."

— Mary Jander, Senior Editor, Light Reading
http://www.lightreading.com

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