Spectra Physics says: Thank God, we're a laser business

June 7, 2001
Now that last year's 50 to 100% growth rates in telecom seem to have disappeared, perspective can be hard to come by. But the point for Spectra-Physics, and many other optoelectronic companies that have started separate business units to pursue still impressive telecom opportunities, is to keep the rest of their business in perspective at the same time.

MOUNTAIN VIEW, CA--The last few months in telecom have been rocky as very hot market expectations suddenly cooled off. From the broader perspective of the optoelectronic industry and related hi-tech industries, such as semiconductors, the telecom downturn can be seen as part of a readjustment process among many business factors. For example, when Spectra-Physics Lasers reported results on April 25 for the first quarter of 2001, revenue growth was 39% over six markets. But the company also announced 140 layoffs from its Passive Telecommunications Group, in Oroville, CA, which amounted to 11% of the total Spectra-Physics workforce.

"Our headcount in Oroville was tripled last year," said Patrick Edsell, president, chairman and CEO of Spectra-Physics. "So we had to bring it back some, but it is still a lot more than it was a year ago. Part of the problem is that everybody has to keep everything in perspective."

Now that last year's 50 to 100% growth rates in telecom seem to have disappeared, perspective can be hard to come by. But the point for Spectra-Physics, and many other optoelectronic companies that have started separate business units to pursue still impressive telecom opportunities, is to keep the rest of their business in perspective at the same time.

"Anytime you go after a market like the telecom market, it's very risky," Edsell said. "And no matter what happens this year, we expect our telecom business to grow by a lot over last year. So putting it in a different business unit it does two things. When markets are growing very rapidly it lets you focus resources. And it also lets you, if the growth isn't what you expected, manage weaker business situations by themselves without impacting the rest of the company."

The growth at Spectra-Physics was mostly being driven by shifting technology, Edsell said. "We're seeing not only new applications, but we're seeing semiconductor lasers replacing conventional lasers, and we don't have a huge position in a lot of the OEM conventional laser markets, so it's all growth to us." Telecom contributed 7% to net sales this quarter as opposed to 1% in the same period last year and 9% in the previous quarter. But even with high percentage growth in telecom over last year, it has not yet become a major dollar contributor in the overall company mix.

So despite a strong fundamental belief that the telecom market will still at least double in size this year, Edsell emphasized the importance of balancing his company's telecom efforts with maintaining their current market share as one of the world's top two laser companies. "We sort of walk around today saying 'thank God we're a laser business,'" he said. "And that's reflective of our results. Our laser business continues strong. We see a lot of opportunities there and we expect that business to continue to grow."

Hassaun A. Jones-Bey, senior editor, Laser Focus World

Source: Optoelectronics Industry Report (MAY 2000)

Sponsored Recommendations

Request a free Micro 3D Printed sample part

April 11, 2024
The best way to understand the part quality we can achieve is by seeing it first-hand. Request a free 3D printed high-precision sample part.

How to Tune Servo Systems: The Basics

April 10, 2024
Learn how to tune a servo system using frequency-based tools to meet system specifications by watching our webinar!

Motion Scan and Data Collection Methods for Electro-Optic System Testing

April 10, 2024
Learn how different scanning patterns and approaches can be used in measuring an electro-optic sensor performance, by reading our whitepaper here!

How Precision Motion Systems are Shaping the Future of Semiconductor Manufacturing

March 28, 2024
This article highlights the pivotal role precision motion systems play in supporting the latest semiconductor manufacturing trends.

Voice your opinion!

To join the conversation, and become an exclusive member of Laser Focus World, create an account today!