PLI has 70 employees currently, 40 in engineering, with a plan to increase total employees to 90 by the end of 2001. The company raised $28 million in its first found of funding in May 2000 and is presently seeking an additional round. The first round investors were Morgenthaler, US Venture Partners and Venrock who own the majority of PLI's shares, with the rest split between PLI itself and Sarnoff Corp.

Facilities
PLI's initial headquarters and manufacturing facility consists of 90,000 square feet, with on site expansion capacity to 150,000 square feet, and is located in Cranbury, New Jersey. This facility is considered to be sufficient for many years. The factory, designed for low cost high volume automated production, opened on August 1st 2001. While fully self-sufficient at this time, PLI is eventually looking to outsource some of its packaging.

Intellectual property
PLI was spun out of Sarnoff Corporation with 27 patents in lasers, detectors, modulators, SOAs and integration technology. Since then PLI has accumulated IPR to the extent that it now has 65 patents filed or pending. At the moment PLI does not import technology from any other companies, but that is something "we are always open to".

Sales channel
PLI does have customers outside the U.S., and is currently developing a European distributor. The company notes that development of next generation products requires close relationships between PLI and its customers' engineers, and they "prefer to maintain close ties".

Pump lasers

PLI believes it offers the highest power pump laser modules available on the market currently. The aim is to produce 300 mW and 400 mW modules in the fourth quarter of this year, and sample 500 mW modules in that same timeframe.

Significantly, a 1-Watt output has been demonstrated in the lab at several different wavelengths for Raman amplification. PLI explained that this power level has a number of advantages. The raw power allows fewer pumps to be employed, thus reducing the cost of the overall amplifier design. Alternatively, if such a large amount of power is not needed, the headroom can be used to reduce design constraints.

In addition, with devices that offer much higher power levels, the power versus drive current characteristic tends to be linear over a broader range of power. PLI believes this to be particularly important for amplifier designers, who work according to how the laser performs at both the beginning and end of its life. Dr. York explained "as the laser degrades over time, you have to drive in more current to get the same amount of power out. If the pump characteristic is 'rolling over', it is more difficult to predict the control parameters for a given output power, and significantly more current may be needed, which increases the power consumption and the cost. Hence a linear characteristic results in cost savings."

Dr. York believes that customers are already asking for 0.5 - 1-Watt lasers. As PLI is de-rating its devices to get to 200 mW, these devices ought to demonstrate very good reliability.

Competition in the pump laser market
Dr. York was unequivocal in mentioning Furukawa as the main competitor for 1480/14xx pumps, though she also views Excelight (the Sumitomo spin-off), Corning and JSDU/SDL as possible competitors. However Dr. York was not clear whether all of these suppliers actually have high power products on the market at present. She cited Furukawa as having a 70-80% market share. PLI aims to grab a significant share of the total market over the next two years.

However, Dr. York believes that PLI has a major advantage over Furukawa with its high power level devices: "When we tell customers that we have 300 mW and 400 mW modules, we are told these power levels are not readily available."

PLI claims to be working with most of the Tier 1 users of pump lasers, and because these potential customers have allocated time and resources to work with PLI, Dr. York views this as a clear indication that the company has something which cannot be found elsewhere.

Also, Dr. York noted that PLI's package design provides greater power stability than the industry standard. Right now each pump laser has to be profiled for control within the network, which adds significant cost. Increased power stability eliminates or reduces this requirement. The packaging is designed by PLI itself, as it believes that for the performance levels offered, the company's own expertise is necessary.

With regard to SDL, Dr. York mentioned that over the past 10 years, two commercial centres for high power lasers were federally funded by the US government, of which Sarnoff, from which Princeton Lightwave originated, was one, and SDL another.

"Our understanding is that SDL was essentially paid by the government to focus on 980 nm, while Sarnoff was paid to focus on the 1480/1500 nm range. This is probably one of the reasons why SDL has been dominant in the former, and this is also why we believe we will be dominant in the highest power 1480/14xx range. We have ten years and more than $70 million of funding behind us to develop that technology and put it into product."

Commenting on why PLI is so much later than SDL, which has been dominating the 980 nm market for some years, Dr. York mentioned that Sarnoff used to be the corporate research centre for RCA. "About 5 years ago it changed its business model to one which would incubate and spin-off companies, so it is a relatively recent phenomenon for Sarnoff to spin-out a company that was actually meant to produce a product. The model took some time to evolve."

In any case, Dr. York believes that for this particular product range, it would have been a mistake for PLI to have been spun-off earlier than it was, since the products are designed to complement next-generation networks and would have been too early for the market.

While no official announcement has yet been made concerning orders, PLI cites Corvis, Corning, Lucent, Alcatel, Pirelli, Nortel and other major long haul players as the kind of customers that would have an interest in PLI high power pumps and other advanced products.

Tunable lasers

PLI regards its approach with tunable lasers as making the "engine" behind the external cavity laser. PLI provides an Indium Phosphide-based semiconductor chip-on-carrier device that module manufacturers can integrate in an external cavity laser to make a network source laser. PLI describes the chip-on-carrier device as being the result of a "highly simplified manufacturing architecture".

"We make modules for pump lasers and DFB lasers, but as time moves on, the differentiation between what you think of as 14-pin butterfly package and the chip-on-carrier is going to disappear, and more value is going to be added at the chip level. Optical sub-assemblies are going to become very important."

Dr. York noted that while its own customers, and its customers' customers, strive for higher levels of integration, they will want an optical sub-assembly that fits into the package that they have designed.

"We want, for example, in the future to integrate a tunable laser and a modulator, but we would probably still look for external customers to package that."

Potential customers for this product are companies like New Focus, iolon, Blue Sky Research, and so on. Dr. York believes that there are currently hardly any competitors to PLI in this segment, the only one coming to mind being NEL.

High power DFB

PLI's pump and tunable lasers are further ahead in terms of customer opportunities, with the high power DFB being a somewhat more recent development. PLI believes that Agere's entry in the market has given credence to the concept.

"Prior to a couple of months ago, nobody had announced a product higher than 80 mW. We announced 340 mW, and then Agere followed that with a press release for a 280 mW DFB. We are pleased with that announcement as customers prefer to have multiple suppliers."

One of the reasons for this, PLI believes, is that Sarnoff had invested an estimated $70 million, over a ten-year period, into laser technology development. This has allowed PLI to further develop and prototype its three product families and build an industry-leading, high volume manufacturing facility to move product into the market. PLI had about $2 million in sales last year as a result of this approach.

A further success factor, Dr. York says, is that the team has been working together for many years and is more or less intact from the days at Sarnoff.

In terms of risks, Dr. York noted: "we are currently shipping prototypes, and we are embarking on official qualifications for the products, and this is a hurdle we certainly need to pass in order to establish market credibility."

The company is also looking to supply low-power DFBs for access and data communication applications, which it intends to carry out with partners already having a presence in that area because of the ultra-low cost packaging required.

Additionally, PLI is giving consideration to the future potential of tunable gain components, or what PLI calls the Broadband GainChip, and, is developing advanced integration technology based on an InP platform.