SAN JOSE, CA--Oclaro has had big news to announce this year. First, on April 27, the company came into being when Bookham and Avanex Corporation merged, creating the “Oclaro” name as a combination of “optical” and “clarity.” Next, on June 3, Oclaro closed a deal with Newport Corporation (Irvine, CA) to exchange strategic assets, in which Oclaro acquired the Newport Spectra Physics (S-P) high-power laser diodes business in Tucson, AZ, along with $3 million in cash, in exchange for Oclaro’s Advanced Photonics Solutions division.
Now, Oclaro is sorting out the results, in particular by integrating the former S-P diodes business with its own high-performance optical-components, modules, and systems business.
The transaction with Newport was completed on July 4th, 2010, according to Yves LeMaitre, executive VP of Advanced Photonics Solutions at Oclaro. At that time approximately 80 employees from the former Spectra-Physics High Power Laser Diodes business joined Oclaro, says LeMaitre; the vast majority of these employees are located in Tucson and cover a broad array of functions such as engineering, manufacturing, sales, product management, marketing, and administrative support.
As for how Oclaro plans to bring the former S-P business into the fold, “our first priority is ‘customer continuity,’” says LeMaitre. In the early stages of an acquisition, avoiding disruption to the customer business is key, LeMaitre notes, as well as increasing the quality of the customer experience. “Our team is focused on these goals,” he adds. “Obviously, as the business becomes more integrated, Oclaro’s goal is to provide our customers with the best of both worlds. To give two concrete examples, our wafer fabs in Europe use proprietary processes and run at higher utilization, enabling us to produce lower-cost solutions while still improving reliability. Also, the high efficiency of our fiber-coupled packages designed in Tucson can be further leveraged by the variety of high-power chips that were already available in Oclaro.”
Avoiding market limitations
One of the key challenges of the laser-diode market is that most diode suppliers are also vertically integrated and design and manufacture diode-pumped laser systems. As LeMaitre explains, this inherently limits the size of the addressable market as, for obvious reasons, companies prefer not to buy from their direct competition. Because the market at the laser-system level remains fragmented, it is increasingly difficult for any laser manufacturer to reach the critical mass necessary to afford the R&D and manufacturing investment required to sustain a technology leadership position.
However, with the combination of products and technologies coming from Newport and ex-Bookham, Oclaro is uniquely positioned to establish and sustain a dominant position as the leading merchant supplier of high-power laser diodes, according to LeMaitre. “Our sales, marketing, and product-engineering teams located in Tucson and San Jose will now be able to address, in a ‘nonthreatening’ way, the large U.S.-based OEMs for diode-pumped laser systems,” he says. “The proximity of our Tucson design center to the end customers will also enable us to keep our innovation and technology roadmap well-aligned with our U.S. customer base.”
Spectra-Physics has been around since 1961; the name is a respected one, a fact of which LeMaitre is well-aware. “The newly acquired product lines enable Oclaro to establish a significant presence in the medical laser market, as well as a leading position into the diode-pumped solid-state laser market, with Spectra-Physics as a reference tier-one customer,” he says. “The acquisition also further strengthens the company portfolio of diode solutions for fiber lasers, direct-diode lasers, and graphic-arts systems. The vast array of technologies developed in Tucson around 8xx nm chips, bars, fiber coupling, and leading high-power packaging solutions is complementary to the Oclaro legacy in reliability, brightness, and power around both 8xx and 9xx nm products.”