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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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.
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.

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