Optical components

DigiLens Shrinks Another 50 Percent

Optical components firm DigiLens Inc. shut down its manufacturing facility last week, laying off half its staff of 40 as the company tries to secure the funding to carry on.

The move, following a 25 percent round of cuts just months ago (see Startups Make More Cuts), was prompted when DigiLens signed a contract to have a foundry provide it with wafers. The 20 employees let go were part of the manufacturing team. What's left are the experts in Fiber Bragg Gratings (FBGs), the real meat of DigiLens's technology.

The company's Sunnyvale, Calif., fabrication plant is now up for sale. It cost $25 million to build (although a press release from early 2002 says $35 million) and will probably go for "considerably less than that," CEO Jonathan Waldern says.

Outsourcing is commonplace in the semiconductor industry as a way to keep costs down. DigiLens chose to build its own manufacturing line because it required silicon oxynitride (SiON) wafers, which were relatively uncommon. But SiON manufacturing services are available, and DigiLens is at a point where it needs to trim costs.

"What's critical is to ensure our cost base is at a minimum," Waldern says. "We're in a reasonably manageable situation. For other fabs, the downturn happened so quickly, they had no room to maneuver."

Waldern wouldn't specify where DigiLens is getting its wafers, other than to say it's from a Silicon Valley source. DigiLens will receive SiON wafers from that source and will add its own "active cladding" layer, into which it etches its electrically switchable FBGs (see DigiLens Creates 'Liquid Gratings').

It helps that DigiLens doesn't rely on optical networking for survival. The company started off selling components to the display and imaging industries, which still represent 50 percent of its revenues, Waldern says.

But DigiLens officials do believe their networking products are on the verge of great things. The dynamic gain equalizer demonstrated at last year's OFC (see DigiLens Unveils Optical IC) has begun sampling and is drawing some revenues, Waldern says. DigiLens is also planning to sample a variable gain-flattening filter this quarter.

Separately, DigiLens continues to seek a lead investor for its current round of funding. The company secured $4 million with promises for another $11 million if an outside investor could be found, but that outside investor hasn't been pegged yet, Waldern says.

The funding announcement, in November, anticipated that the round would close in March 2003 (see DigiLens Grabs $4M). But naturally, company officials are anxious to find that outside investor. Waldern notes that there's "no contractual deadline, but as a going concern, we need to have investment in the company."

DigiLens's investors so far are Alta Partners, Amadeus Capital Partners, Apex Investment Partners, BCI Partners, Citigroup, Crescendo Ventures, Johnson & Johnson Development Corp., Keystone Venture Capital, Noro-Moseley, Science Applications International Corp. (SAIC), and Vision Capital.

— Craig Matsumoto, Senior Editor, Light Reading

digioutofwork 12/5/2012 | 12:53:55 AM
re: DigiLens Shrinks Another 50 Percent How can there be "meat" left if the engineering team that developed the technology in the first place was scattered into the winds? What lies must continue to raise more money?
kozeyekan 12/5/2012 | 12:53:19 AM
re: DigiLens Shrinks Another 50 Percent Not entirely true if you are aware of the history of the company. Times are hard for many companies and bitter accusations do nobody any good.
An ex-Digilenser.
not_a_brown_nose 12/5/2012 | 12:44:32 AM
re: DigiLens Shrinks Another 50 Percent Hello, I see you work in the Digilens PR department.

ItGÇÖs a shame that investment of such large sums ($40M) have not given a larger range of marketable products (is this accusation or reality?). I know that the engineers did their best to achieve results, worked beyond the call of duty in many cases, battling against a volatile and changeable management style. These engineers are the ones that loose out though (I don't think they're bitter, just "sh*t happens"). Investors have lost as well, significant sums, I remember seeing them walking around thinking there investment would grow as they listened to projected $10 a share earnings (they could be bitter). LetGÇÖs hope displays can save the company, itGÇÖs a shame the main displays man was laid-off last year. (If youGÇÖre out there, we hope your doing well and wish you good luck. Never did get the chance to say goodbye and tell you it was a pleasure working with you, hopefully our paths will cross again in the future, under more pleasurable circumstances).

Having said this good luck to the company. Its been an education and for some, a very profitable business model. I had a good time working for the company, learned a lot.
Where's my money 12/5/2012 | 12:27:05 AM
re: DigiLens Shrinks Another 50 Percent Yeah, I learned a lot as well...

However, a good portion of the lessons I would have prefered to have read about.

Unconfirmed word has it that DigiLens sent out another HEAVY pile of pink slips today. I wonder if there is anyone left at all.
Where's my money 12/5/2012 | 12:22:22 AM
re: DigiLens Shrinks Another 50 Percent Well it looks like my source of 11 days ago was accurate. I simply hope that DigiLens compensates the employees that worked to the bone until the end according to the contractual payment arrangement, (and as they compensated first and second round lay-off personal) without having to go to litigation.

See the article at http://www.lightreading.com/do... . Where is my money?
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