Archive for '2011'

    Is the U.S. wired Internet infrastructure weak? Revisited.

    December 15, 2011 3:17 PM by Tom Hausken
    It’s time to weigh in on a pet peeve of mine. The topic is the state of high-speed Internet in the U.S., in a December 4 essay in the New York Times. My peeve is that once again the U.S. wireline infrastructure is portrayed as somehow way behind, whereas a reasonable analysis presents a very different picture. For a large country, the U.S. actually has a very strong and affordable infrastructure.

    It’s the author has a point. There is a digital divide in the U.S. and in the world. It’s increasingly important to treat broadband access as a necessary service for all citizens. National averages overlook that large groups people are left out.

    The problem is how the point gets twisted along the way. The way the author explains it is like fingernails on a blackboard to me. I've complained in this blog before (here and here) and I can't let this one go too.

    For example, the U.S. is portrayed as 12th in the OECD economies. That's per capita. Iceland is number 5. It has 110,000 people. You get the idea. The OECD aggregates across the whole U.S., while smaller countries will almost certainly show up in the wings of the distribution. We should compare tiny Iceland with, say, a successful regional provider in the U.S., not the entire U.S. In fact, larger countries like Germany and France are passing us up. That is important. Let's say it.

    The author points out that even Portugal and Russia are upgrading to optical fiber. That’s because their infrastructures were so bad in the first place. The U.S. is rewiring with fiber, but it’s a big country, DSL is working pretty well, and someone has to pay for upgrading to fiber. A too-rapid deployment would recreate something on the scale of the Telecom Bubble of the late 1990s. We know how that turned out.

    Broadband is also portrayed as a monopoly, yet residential users can choose from the wireline provider, cable provider, and even wireless providers. Competition is good, but we’ve come a long way.

    The author says the providers should sell access to their networks to competitors, to reduce prices. But the problem is that everyone wants the high-end customers. There’s a reason that underserved neighborhoods are underserved. There’s less profit there.

    Having worked in telecom policy in Washington, it is an ongoing process to improve broadband access to underserved groups. It’s messy, because there is the FCC and Congress, 50 state regulators, municipal governments, and the courts. And it’s “inside baseball”; pretty boring stuff if you’re not a lawyer.

    The author is right, we should be striving for broader broadband access.I guess it’s just something about how she said it.

    The Top 10 laser suppliers: some tight races but a good year for all

    November 29, 2011 5:47 PM by Tom Hausken
    Now that 2011 is coming to a close we can estimate who are the leading laser suppliers for the year. Once again it looks like Trumpf and Coherent are neck and neck for Number 1, with over $800 million each. Rofin and Cymer are in a close race for 3rd and 4th places, with nearly $600 million each.  IPG will roll in 5th, but this year with over $450 million in fiber laser sales. IPG's 2011 revenues would have put it at #1 as recently as 2009.

    These players are familiar names. Cymer dropped out of the short list in the recession, but is back again. The order changes depending on the exposure of companies to different sectors. Trumpf and Rofin are highly exposed to heavy manufacturing, while Coherent is more diversified. Cymer is basically a one-product company.

    I can't really know how the year will end up, of course. But three quarters are finished, and so far it looks like the fourth quarter is behaving as expected. Only the floods in Thailand have created surprises, but that's confined to telecom components, hard drive manufacturers, and the like.

    I also can't really know what Trumpf is up to. And a lot of revenues for a company like Rofin-Sinar are really system sales, revenues that would not be counted if it were a company like Trumpf or Newport.

    And then there are the telecom transceiver manufacturers. Finisar , JDS Uniphase , Oclaro , and others are all very strong in that segment, and Finisar is closing in on $800 million itself. With the companies above, and a couple others, that rounds out a list of the top 10.

    It's also interesting that the Top 10 make up over 50% of all laser sales worldwide.

    But I don't want to give too much away. There will be more on 2011 and 2012 at January's Laser Focus World Marketplace Seminar and our upcoming market report .

    Is U.S. manufacturing growing or shrinking?

    November 18, 2011 6:46 PM by Tom Hausken
    Here’s a little known fact: U.S. manufacturing has actually been growing as an economic output in the U.S. for at least 60 years. Here’s another: China is now the largest manufacturing nation. So there you are: U.S. manufacturing has been growing, but China is now #1.

    If you don’t believe me, here are two charts , published in the New York Times (Sept. 11, 2011). The chart on the right shows overall output, growing steadily over decades with only brief setbacks. Whether the trend will continue upward, or represents the end of an era, depends on whether you’re an optimist or a pessimist .


    We’re used to hearing that U.S. manufacturing is declining, but the chart on the left shows that it’s only declining as a share of overall economic output. Other sectors are simply growing more quickly. The U.S. is producing more output in information-intensive industries (such as finance) and less in labor-intensive industries (such as manufacturing). Even the manufacturing tends to be more information-intensive. The U.S. is strong in things like jet engines and pharmaceuticals, whereas for sneakers you think of Asia.

    There are issues , to be sure. Most importantly, growth in output does not necessarily mean growth in jobs, and a country needs jobs for its people. Also, China’s manufacturing output is growing much faster than the U.S. Much of that was done by making the pie bigger, but some was done by taking share from other countries. The gains in share are not just in sneakers, but in things like laptop computers (Lenovo) and telecom switches (Huawei).

    This is obviously a complex topic--just ask anyone at your next cocktail party or Occupy Wall Street event. And to be precise, manufacturing output did decline during the down years of recessions, when the whole economy slowed.

    Just the same, it might cheer some of you as we enter the winter to know that U.S. manufacturing has been growing for nearly all of the last 60 years, and more.

    Kodak exits opto and ends an era

    November 11, 2011 5:37 PM by Tom Hausken
    It seems like the end of an era: Kodak is selling its CCD operations and its image sensor patents. It had been making CCDs since 1975, one of the early companies to make them, but waited until 1989 to sell them externally. Kodak had a number of firsts, including the first megapixel sensor, in 1986.

    Then CMOS image sensors took off.CMOS sensors were conceived early on, but the lithography was too poor at the time. Omnivision and others brought it to life in the 1990s. Kodak tried several times to break into that product line, but it never worked out. Kodak teamed with Motorola in 1997 on CMOS image sensors. In 2004 it acquired National Semiconductor’s CMOS image sensor operation, for about $10 million in cash. Kodak even had deals with IBM and TSMC to manufacture the sensors, and some clever technology. But it wasn't enough.  

    In our 1997 market report, we estimated that Kodak was the leading producer of image sensors outside of Japan, with $38 million in sales and under 6% market share. By the time of our