What could turn out to be a significant milestone in the development of 1550 nanometer vertical cavity surface emitting lasers (VCSELs) is being cooked up by Princeton Optronics Inc., a startup that’s planning to announce a $25 million second round of funding next Monday (August 21).

The startup is developing a tunable VCSEL that appears to compete head-on with Coretek -- the startup acquired by Nortel Networks Corp. (NYSE/Toronto: NT) in March 2000 for stock then worth $1.43 billion (see Nortel Gambles $1.43 Billion On Tunable Lasers).

Princeton Optronics says its device will deliver the same power as Coretek’s laser -- 20 milliwatts – and will have an equivalent tuning range. Its manufacturing costs, however, will be five times lower, according to Tim Hays, Princeton Optronics’ VP of marketing.

It’s tough to evaluate this claim, as developers of tunable lasers simply won’t say how much their products cost. In a session on tunable lasers at the Opticon 2001 conference yesterday, a bunch of executives from five manufacturers wouldn’t go further than saying that their products would cost up to 20 percent more than the equivalent fixed-wavelength lasers.

Parvis Tayebati, Coretek’s founder, says it's tough to comment on Princeton's claims without having more details. "On the face of it, it looks like a structure that's more difficult to manufacture, so I don't know how it could be cheaper," he says. "If they can do it, I'll have to congratulate them."

It's also worth noting that the cost of manufacturing the laser itself typically represents only a small fraction of the overall cost of the unit sold to customers. Packaging typically represents the bulk of the cost -- around 80 percent according to Tayebati -- which suggests that Princeton's fivefold reduction doesn't refer to the price paid by customers.

Tayebati also contends that Princeton itself won't have a clear idea of its costs until it starts shipping samples.

Princeton says that it’s been developing its tunable VCSEL for six or seven years and will ship first samples in the next few weeks.

Like Coretek, Princeton achieves relatively high powers by pumping light from a second laser into the VCSEL’s cavity -- although Princeton uses a second, high-power 980 nm VCSEL to do this, while Coretek uses a 1310 nm edge emitting laser.

A great deal of the startup's intellectual property lies in the production of the 980 nm laser, says Hays.

Also like Coretek, Princeton Optronics tunes its laser using MEMS (micro-electro-mechanical systems). But instead of being integrated, the MEMS device is a separate part, which forms an external cavity.

"The critical step is getting the pump, the cavity, and the fiber all aligned," says Princeton's Hays. Right now, this process has to be done “actively” -- adjusting the alignment to optimize performance in an iterative process, with the laser actually operating. However, Princeton hopes to be able to move to “passive” alignment, where the elements are automatically placed in the optimum position first time, without the laser operating.

Of course Coretek isn't the only competition to be reckoned with. New Focus Inc. (Nasdaq: NUFO), Iolon Inc., and Blue Sky Research all claim to have external cavity laser designs that reach 20mW of output power (see New Focus, New Laser, Corning Backs Laser Startup, and Blue Sky Scores Four in a Row).

"In the case of New Focus, we think our five-times [cost] advantage is more like eight times," says Hays. He also points out that New Focus is dependent on a supplier for its laser chip, whereas Princeton Optronics has no supply issues. It buys in wafers -- a commodity -- and then does its own processing and dicing.

At lower powers, Princeton’s competition includes another startup that’s recently unveiled a 1550 nm tunable VCSEL development, Applied Optoelectronics Inc. (AOI) (see Startup Makes Waves in VCSEL Market).

Princeton Optronics’ second round of financing, to be announced on Monday, is led by Stockholm-based Investor AB. It also includes St. Paul Venture Capital and Technology Venture Partners LP, which joined forces with first-round investors Intel Capital and Novak Biddle Venture Partners.

Princeton Optronics shouldn’t be confused with Princeton Lightwave Inc. (PLI), a developer of distributed feedback lasers.

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