Novalux sets sights on new markets

SUNNYVALE, CA-It has been a tough couple of years for Novalux, a company founded in 1998 to develop semiconductor laser products based on the proprietary Novalux Extended Cavity Surface Emitting Laser (NECSEL) technology.

Nov 1st, 2004

SUNNYVALE, CA-It has been a tough couple of years for Novalux, a company founded in 1998 to develop semiconductor laser products based on the proprietary Novalux Extended Cavity Surface Emitting Laser (NECSEL) technology. After going through a voluntary Chapter 11 reorganization in 2003, the company turned away from the telecom market and focused its product-development efforts on bioinstrumentation-along with numerous other laser companies.

Now Novalux is facing another challenging transition. In mid-October rumors began surfacing that the company had laid off most of its employees and was about to go under. But according to Jean-Michel Pelaprat, chairman of the board and now interim CEO, while some people have been let go and CEO Jeff Cannon has resigned, Novalux is still a viable business. In fact, although Novalux has temporarily stopped selling the Protera laser to address some technical issues with that product, the company is also in the process of hiring a new CEO and a new business development manager, with an eye toward moving aggressively into some new markets within the next year.

“In the last few months we found some problems with the Protera lifetimes, so we chose to temporarily pull back from the market to address these problems and better support our customers,” Pelaprat said. “But the structure of the company has not changed. We are still working to bring to market products based on the Protera and to bring our NECSEL arrays to larger markets, particularly displays, graphic arts, and sensing.”

Pelaprat says that the fundamental NECSEL devices are very reliable; the issues with the Protera lie primarily in parts of its packaging. Thus Novalux is working to improve the product design. In fact, while the company has scaled back its manufacturing operations for the time being, its engineering staff remains intact. According to Pelaprat, Novalux still has 30 employees and expects to be back selling the Protera laser in a few months.

“The Protera has many benefits, particularly in its manufacturing cost structure, that give us an advantage,” he said. “But we had to make a choice: should we continue to ship products we know have the potential to fail, or pull back and fix the problems?”

In addition to addressing the packaging and lifetime issues, Novalux is putting much emphasis on gearing the NECSEL arrays for consumer display applications, particularly rear-projection TV. According to Pelaprat, the potential for the company’s NECSEL technology to compete with lamp-based projectors in this market is accelerating, which in turn is attracting new funding. He said the company recently received a two-year, multimillion-dollar DARPA contract (through the Super High Efficiency Diode program) in support of the array development, and the company is reportedly working with some partners in the display industry. In addition, in October Novalux received another large round of funding from existing investors and several new investors, according to Pelaprat.

“From a performance standpoint, the display applications are less demanding than bioinstrumentation,” he said. “The key issue is really the cost and the reliability. We need to make these products simple so they can be produced in volume at low cost. And one of our core strengths is semiconductor manufacturing.”

-Kathy Kincade

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