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IPAG Bags $4.4M for 40-Gig Chips

Light Reading
News Analysis
Light Reading
9/25/2002

Innovative Processing AG (IPAG), a German startup with some interesting receiver technology, popped up on industrial radar screens yesterday when it announced a second round of funding (see IPAG Pockets Funding).

The round of €4.5 million (about US$4.4 million) was led by High Tech Private Equity, a venture capital (VC) firm whose main backers include industrial optics manufacturer Jenoptik AG. Agite! S.p.A. [Ed. note: Bless you!], which was an investor in IPAG's seed round, also increased its stake in the company.

In the beginning, IPAG was also backed by chip maker Multilink Technology Corp. (Nasdaq: MLTC) Multilink Invests in German Startup). Initially, Multilink saw this as a strategic investment through which it could dabble in front-end components as well as the chips that sit behind them. But the chipmaker has been forced to scale back its grand ideas (see Multilink Lays Off). IPAG officials say the company isn't affected by Multilink's strategy.

IPAG was spun out of Gerhard Mercator University, Duisburg. It plans to leverage indium phosphide technology to monolithically integrate detectors and electronic amplifiers on the same piece of material. This means module makers only need buy one component instead of two, and they don't need to worry about the complexities of connecting the two together.

The second and more important reason for the integration, says IPAG's founder and CEO Ralf Bertenburg, is that it allows the properties of the electrical connections between detector and receiver to be taken into account at the design stage. That translates into higher performance.

For starters, it makes it possible to produce higher-speed parts. IPAG is developing 40-Gbit/s components in the first instance, although its technology could also be used to make "drastically cheaper" 10-Gbit/s receivers, according to Bertenburg.

A related advantage is in the improved jitter characteristics of the device, meaning there are fewer errors in the received signals. Bertenburg boasts of less than 4 picoseconds of "group delay" time variation.

Other startups, such as Xindium Technologies Inc. and VSK Photonics Inc., have adopted similar approaches to making receivers (see Xindium Comes Out). But Berternburg claims, naturally, that IPAG's approach is the best.

Most competitors rely on transimpedance amplifiers (TIAs), he says, to amplify the electrical signal coming out of the detector. But TIAs have a problem -- they require a resistor in the feedback loop. At high frequencies, all resistor elements also show inductance, meaning that the circuit becomes sensitive to how fast the electronic signal changes. That results in "ringing" of the signal, and ultimately leads to more bit errors. In fact, it can lead to an "error floor", where the bit error rate remains constant, even though the input power of the optical signal increases.

IPAG uses something different, called a traveling wave amplifier (TWA). Without going into details, the effects of the changing signals are an integral part of the TWA design, so they don't result in ringing or error floors. (We'll have to take that on trust, Herr Bertenburg).

Xindium's CEO Cindana Turkatte didn't wish to get drawn into comparisons, saying merely that if what IPAG was doing was important, we'd all be hearing a lot more of them.

So far, things been pretty low key, however. IPAG apparently had a demonstrator receiver on show at the OFC conference earlier this year -- who saw it? The startup also claims to have started shipping samples.

IPAG is taking a long-term view. "Big vendors have given up on their indium phosphide activities because they need to see revenues in nine months," says Bertenburg. "Our focus is different. We can afford to wait 24 months. Meanwhile, we will generate smaller revenues from sample shipments, which will be enough for us to survive."

One thing that's helped IPAG get so far with so little is its fabrication facility, worth about €30 million, which was funded by the German government. The startup currently has about 18 employees, with no plans to expand significantly for the time being.

— Pauline Rigby, Senior Editor, Light Reading
www.lightreading.com

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