TeraXion Trots Out FBGs

A lot of companies can make fiber Bragg gratings (FBGs), but very few of them can churn out these components in quantity, according to TeraXion, Inc., a Quebec-based startup that claims to be one of the few that can meet the manufacturing challenges.

Tomorrow, TeraXion is due to open a new manufacturing facility, bringing its total operating space to 30,000 square feet. "We've established what we consider to be the minimum manufacturing capacity to make us interesting to large customers," says Martin Guy, TeraXion's CTO.

Also tomorrow, the startup plans to announce a loan warranty from Investissement Quebec to back an $8 million loan granted by a Canadian bank, the Movement Desjardins. This brings TeraXion's total funding in equity and loans to $25 million since it was founded in April 2000.

Top of the list of investors in TeraXion are strategic partner Sumitomo Corp. and a silicon valley-based bank, Robertson Stephens. The other investors are Business Development Bank of Canada, Innovatech Quebec, RBC Capital Partners, Wynnchurch Capital, and LBG Capital.

So what's got them so excited?

FBGs are essentially filters, created by shining ultraviolet light onto the core of an optical fiber. Basic FBGs can be used to break out one wavelength from a bunch of wavelengths in a DWDM system (see FBGs: Key to DWDM's Future?). More advanced filter shapes can be made that are suitable for tasks like Chromatic Dispersion and Polarization Mode Dispersion (PMD) and gain-flattening (making sure the gain is constant across different wavelengths) in Erbium Doped-Fiber Amplifiers (EDFAs). That's where TeraXion is focused.

"Using fancy software you can design just about whatever [filter] you want," says Guy. "The difficult part is turning a design into a product."

To be able to translate a design into a product, there are two important things, he says. The first is to have very high-quality phase masks -- silica plates with ultra-precise scratches on them. Light is shone through the mask to transfer the desired pattern into the core of a fiber positioned beneath it. TeraXion makes its own phase masks using a special writing technique that makes it possible to write very long gratings -- which equates to greatly improved accuracy, it claims (see TeraXion to Make Masks).

The second part of the equation is to be able to package the gratings effectively. "A bare grating isn't worth that much," says Guy. It's important to isolate the FBG from fluctuations in environmental conditions, he adds, noting that TeraXion does its own packaging as well.

Having all these competencies under one roof is what sets TeraXion apart from other FBG vendors, Guy contends.

In fact, competition in FBG technology is quite fierce. In the Quebec area alone there are several vendors, including Bragg Photonics Inc., which makes gratings and StockerYale Inc. (Nasdaq: STKR), which makes phase masks. Quebec is also home to Innovative Fibers, an FBG startup bought by Alcatel SA (NYSE: ALA; Paris: CGEP:PA) in June 2000 (see Alcatel Buys Fiber Filters). One reason this cluster exists in Quebec is because fiber Bragg gratings were invented there, by Ken Hill in 1978.

However, Guy says the main competition to his company's products comes from JDS Uniphase Inc. (Nasdaq: JDSU; Toronto: JDU), Australian vendor Redfern Photonics Pty Ltd., and Southampton Photonics Inc.

It's worth pointing out that Southampton Photonics doesn't use phase masks to make its gratings. Instead, it uses a direct-write technique, shining a laser beam directly on the fiber, and moving it to create the desired pattern. The company claims that this method speeds up production, since there is no wait to get the masks made (see Fiber Bragg Gratings on Speed).

In addition, a couple more startups targeting high-end FBGs have sprung up this year. These include the U.K.'s Indigo Photonics Ltd. and Denmark's Ibsen Photonics A/S (see Startup Brag(g)s About Its Gratings and Ibsen, Act II).

— Pauline Rigby, Senior Editor, Light Reading
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Milano 12/4/2012 | 7:31:35 PM
re: TeraXion Trots Out FBGs There is a difference between the technology (Bragg) and the applications.

For instance, pump stabilizers is an application for Bragg filters. That market has reached a state of price war and is probably worth about $10M.

Another market is the DWDM 50 GHz filters. ItGÇÖs a pretty large one but it is mainly dominated by CienaGÇÖs internal production.

And finally you can throw in GFF, CD compensators, etc. These are low revenue (for now) for FBG applications.

oeo2oo 12/4/2012 | 7:31:59 PM
re: TeraXion Trots Out FBGs If manufacturers are able to significantly lower the cost of FBGs then the use will explode. Take a look at the history of just about any electronic device, or semiconductors; with dropping prices unit volumes exploded.

The lower cost certainly does not make the technolgy look better, but it makes it more competitive. If FBGs are offered at one-quarter of the current cost, with the same functionality, then their use will increase.

As for the current market size, somewhere around $200 million seems plausible, down signifcantly from the peak, of course.

High performance FBGs, i.e., those used for DCMs, will still favor performance over price, at least for the near term.
LightBeating 12/4/2012 | 7:32:00 PM
re: TeraXion Trots Out FBGs Yeti,

I'm sorry but you've got it all wrong!

Is Ferrari a great car company?

Is Ford a great car company ? (well, it used to be, but it is much bigger than Ferrari)

Many people in this discussion seem to believe that price is not important, but that performance is all that matters. Yet the reason that personnal computers are so pervasive now is that they offer both performance AND price. And that was made possible only by breakthroughs in manufacturing. If one followed the philosophy of some of the participants in this discussion, computers would still cost a million dollars.

Performance no matter what the price is is no longer a valid approach to optical networking systems. If there is a lesson to be learned from this industry down turn, that's what it is.

In the same line of reasoning, I would say that you don't pull out a commodity into a next gen product, you make a next gen product into a commodity.

Only those FBG companies that understand that will survive in the long run. And I believe that is true for all optical components.

Now, don't get me wrong, I love FBG's! I just think they're way too expensive.

lightfax 12/4/2012 | 7:32:03 PM
re: TeraXion Trots Out FBGs Yeti:

I like your passion about FBGs. Don't you think a lot more research (modelling etc)is desired in FBG so as to comfirm its full-proof utility as far as its application in DWDM systems in concered? I know couple of commerical software (optiwave, Rsoft etc) does numerical simulation on FBG. Are these software are capable of model complex type of FBG such as sampled grating?

Your comments would be appreciated.

lightfax 12/4/2012 | 7:32:03 PM
re: TeraXion Trots Out FBGs So finally your are only left with one promising FBG based device "Dispersion Compensator". Don't such filter have got some limitations e.g., high insersion loss (in comparison with DCF), narrow usebale bandwidth and nonlinear nature of ripples group delay. For using such filter over C-band one need to write few meter long Chirped FBG (is it technologically possible to write such a long grating?? If yes then what about Athermal packaging of such along grating??)

I would be astonished to know if VC has invested $5M in Teraxion to pursue "dispersion compensation" as a product based on chirped-FBG.

Who are sampling such Dsipersion compenation filters workind at 10gig or 40gig.

lightfax 12/4/2012 | 7:32:03 PM
re: TeraXion Trots Out FBGs And that market just might get a bit larger as a few manufacturers are working to deliver FBGs at much, much lower costs than are presently


In your openion how big is the market for FBG products? I believe lowering the cost of product does not make a technology looks better. What is more improtent is the performance of the product.

oeo2oo 12/4/2012 | 7:32:04 PM
re: TeraXion Trots Out FBGs >Those of you who snub FBG's are missing out on a technology that may just improve your DWDM and amplifier products. They are here to stay and there is a large market here.

And that market just might get a bit larger as a few manufacturers are working to deliver FBGs at much, much lower costs than are presently available.
Ampman 12/4/2012 | 7:32:05 PM
re: TeraXion Trots Out FBGs I think there are a few things people should consider:

1) In this downturn I don't see too many companies expanding, yet TeraXion who are not even the leader in FBG's are growing.
2) FBG's are the leader in 50Ghz/25Ghz DWDM, TFF can't really do this yet.
3) Low dispersion and dispersion compensation gratings are a reality. (Even gratings for tunable dispersion compensators).
4) FBG's are able to do arbitrary gain flattening profiles for EDFA/Raman which competing technologies can't do.
5) The price of FBG's has fallen a great deal recently and are still competitive with TFF.

Those of you who snub FBG's are missing out on a technology that may just improve your DWDM and amplifier products. They are here to stay and there is a large market here.
HarveyMudd 12/4/2012 | 7:32:06 PM
re: TeraXion Trots Out FBGs First of all funding an FBG technology company by a Canadian Company is not a wilful activity. The Canadian VCs have not amassed so much as the crooked VCs in the US who also funded the development of old tecnologies (e.g., WFM). The American VCs have also funded the companies involved in the integration of various optical transport technologies ( eg, Mahi). The list of American VCs funding useless optical companies is rather long. The evils of American VCs is rather long anfg gruesome. Anyway, I do not think the issue is between Canadian and American VCs.

The use of gratings in ED optical amp-lifiers and semiconductor pump lasers is simply remarkable.

It should also be observed that a lot of canadian optical manufacturing companies are better than the US manufacturing companies.

yeti 12/4/2012 | 7:32:08 PM
re: TeraXion Trots Out FBGs LightBeating;

Here is a summary of your line of reasoning:

Cars are commodities
Ferraris are cars
Ferraris are commodities

By the way, the FBG process is a tech-platform, not a product. A tech-platform can be used to fabricate commodities AND next-gen products. Only those companies with a deep understanding of FBGs will be able to pull it from commodities to next-gen. Be careful not to confuse a technology and products. Is the CMOS process a commodity? It is used to fabricate 0.13 micron circuits as well as $50 memory chips.
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