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Vinod Khosla is among those betting $25 million on automated interface card production
November 7, 2000
Cenix Inc. plans to announce this week that it has raised a total of $25.5 million from investors, including Cisco Systems Inc. (Nasdaq: CSCO) Kleiner Perkins Caufield & Byers (KP), and Dongah Elecomm, a Korean company.
Cenix, which employs 35 people, was founded by former Lucent Technologies Inc. (NYSE: LU) executives Anders Olsson, who is COO and CTO, and Mel Dixon, president and CEO. The company aims to develop an automated process for delivering integrated high-speed opto-electronic components, such as OC192 (10 Gbit/s) interface cards for systems manufacturers.
What drew the attention from big names such as Cisco and KP? Cenix aims to solve a large problem -- perhaps the largest bottleneck in the optical networking industry's supply chain. Interface cards, which provide a connection between fiber-optic telecom lines and the electronic brains of high-speed switches and routers, are in chronic short supply (see Components Shortage Delays Deliveries and Cisco's Optical Customers Face Delays). And most sources in the industry say the current manufacturing process, which requires most of these components to be integrated on a circuit board by hand, is painstaking and time-consuming.
Cenix officials say the company will be working with unnamed robotics companies to design automation into the manufacturing process. The company plans to shrink the functions of a typical OC192 interface card, which includes a number of electrical and optical components, down to the size of a credit card, providing more density for systems manufacturers. Current line cards are roughly 11 to 12 inches long.
"What's happening in the industry is these line cards are assembled from components, and the systems manufacturers do the design and integration themselves," says Olsson. "They want to buy it as a high-function module."
Other companies are working on using automation to deliver integrated components. For example, Axsun Technologies Inc. is developing multifunction optical modules using robotics, although it doesn't appear to be a direct competitor with Cenix. Both companies are in early stages.
"Everybody is emphasizing the theme of automation and integration," says Jim Lewis, vice president of Axsun. "Unbridled demand won't continue forever, and when it declines it's the people that can make high-performance stuff without armies of people that are going to do well."
The presence of Cisco and highly regarded KP partner Vinod Khosla, who championed Cenix (see The Top Ten Movers and Shakers in Optical Networking), may be a sign that automated production of optical modules is where the next wave of investment is going, now that hundreds of systems manufacturers have already been funded.
Cenix has its headquarters and manufacturing facilities in Allentown, Pa., and it will run a marketing office in Irvine, Calif.
-- R. Scott Raynovich, executive editor, Light Reading http://www.lightreading.com
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