KSaria Changes Faces
What to do? For kSaria, the answer was to pack up its toys and go home. Since November, the company has acted as a contract manufacturer, using its home-grown machinery to produce pigtail attachments for others.
"Customers were telling us they didn't have the capex, and that the volume didn't justify the investment," says William Emkey, kSaria CTO. They did, however, show interest in using the equipment, prompting kSaria to start offering its own goods as a service.
kSaria officials will announce the change next week and will demonstrate its capabilities at the OFC Conference in March.
The company peaked at a headcount of 60 and now employs roughly 30, a combination of experts in robotics and components. Its first customers under the new model are getting ready for volume shipments within the next three months, Emkey says.
KSaria's specialty is the pigtail -- the strand of fiber optic cable sticking out of a completed optical module. Typically, the pigtail is attached by hand, a process that requires painstaking effort by human operators. And the process is slightly different from one product to another, a fact that's kept automation out of this sector for years.
"Standards did not exist, of any kind. We struggled so long with trying to get automated manufacturing in place. We're still using tweezers and microscopes," Emkey says.
In fact, he says customers were interested not in the speed of automation, but the price -- saving money on labor.
KSaria creates a software-based "recipe" for each product's pigtail requirements. Given this recipe, the machinery takes fiber from a spool, strips and cleans it, aligns it, and applies epoxy. A separate machine polishes the fiber. The whole process can take less than two minutes -- about the time it takes a technician to get the fiber off the spool.
KSaria will also work with its customers on the module design itself, making sure the product is crafted for easy manufacturability.
Naturally, other automation specialists have had to adjust as well. Cenix Inc., a subsystems vendor that created its own automated manufacturing, shut down and sold its main plant to CyOptics Inc. this month. And Axsun Technologies Inc. appears to be pursuing a contract-manufacturing model similar to kSaria's (see CyOptics Snaps Up Cenix Shards and Axsun Modulates With CyOptics).
LightLogic managed to stick to form, creating its own components with some homemade manufacturing innovations, but the company found shelter after being acquired by Intel Corp. (Nasdaq: INTC) (see Intel's 10-Gig Shopping Spree).
Axsun, Cenix, and LightLogic wanted to use automation to build their own products. KSaria was different -- it was founded to make only the equipment, just as Applied Materials Inc. (Nasdaq: AMAT) makes the equipment that Intel uses to build semiconductors.
So, if the components industry rises up, would kSaria go back to selling equipment?
"Our customers do ask -- should the volumes go up, would equipment be available? That's something we could do," Emkey says. "We'll look at that as the opportunities present themselves."
— Craig Matsumoto, Senior Editor, Light Reading