Jim Hjartarson, ceo, OneChip Photonics

RR: In March 2009, you raised $19.5million. How difficult is it nowadays for an optical component firm to receive VC funding? JH: Clearly, the VC community, given the current macroeconomic environment, is being selective about the new investments it makes in the technology market in general and the photonics market in particular. However, if you can demonstrate that you have a unique approach to a problem that has not yet been solved – and there is a large, untapped market opportunity – VCs will be interested. RR: What is it about your company's business plan that secured the investment? JH: We believe OneChip Photonics has three fundamental advantages that resulted in our securing our initial two rounds of funding. The first is a truly breakthrough approach and technology that will remove the cost and performance barriers that have been impeding the ubiquitous deployment of Fibre-to-the-Home (FTTH) and enable new business and consumer broadband applications. Then there is a large, untapped market. Ovum estimates that the FTTx optical transceiver market will grow from $387m by the end of 2009 to $594m by the end of 2013. OneChip also is poised to introduce photonics integration into other high volume business and consumer markets, where our Photonic Integrated Circuit (PIC) technology can reduce costs and improve performance. These markets could be orders of magnitude larger than the FTTx optical transceiver market. Finally, we have a seasoned and successful management team. OneChip has attracted top talent – from industry leading companies such as MetroPhotonics, Bookham, Catena Networks, Fiberxon, Nortel and Teknovus – who have successful track records of designing, manufacturing, marketing and selling transceivers, PICs and mass market broadband access solutions. The passive optical networking (PON) transceiver market faces considerable pricing pressures. Companies use TO cans and manual labor or more sophisticated hybrid integration where the laser and photodetectors are dropped onto a common platform to meet various PON transceiver specifications. RR: Why is OneChip pursuing InP based monolithic integration and why will such an approach be cheaper than a hybrid platform that can address several PON standards? JH: Most current FTTH transceiver providers base their transceivers on either discrete optics or planar lightwave circuit (PLC) designs. These designs offer low levels of integration and require assembly from multiple parts. There is little technical differentiation among them and vendors must compete on the basis of who can assemble the parts in a slightly cheaper fashion. And there is little opportunity to further reduce such costs. While more integrated than fully discrete optics based designs, PLC designs still require discrete active components and the assembly of as many as 10 parts. Great care must be taken during the manufacturing process to align all parts of the transceiver correctly. And while packaging can be non hermetic, these parts can fall out of alignment through thermal or mechanical stress. PLC designs also have proven to be an expensive alternative. For all these reasons, the PON system vendors with which OneChip has engaged have indicated that they are not interested in deploying PLC based designs. OneChip is integrating all the functions required for an optical transceiver onto one InP based chip. All active and passive components – including the distributed feedback laser (dfb), optically preamplified detector (opad), wavelength splitter, spot size converter and various elements of passive waveguide circuitry – are integrated in one epitaxial growth step, without regrowth or post growth modification of the epitaxial material. With respect to transmit performance, OneChip's single frequency dfb laser will offer a superior performance – more suitable for longer reach and higher bit rate applications – than competing Fabry-Perot lasers. With respect to receive performance, the opad is a higher gain bandwidth solution than competing avalanche photodiodes. It is also lower cost and does not require a high voltage power source. RR: Several companies have explored integrated PON solutions and have either dismissed the idea or have come to market with impressive integrated designs, only to fail. Why are you confident OneChip will fare better? JH: As noted earlier, PLC designs still require discrete active components and the assembly of as many as 10 parts, using a glass substrate. This results in poor yields and high costs. OneChip is integrating the active and passive functions required for an optical transceiver onto an InP based chip. This enables us to achieve low cost, high performance, high yields and high quality. RR: If integrated PON is a good idea why, in OneChip's opinion, have silicon photonics startups so far ignored this market? JH: 'Silicon photonics' designs face the inherent limitation that a laser cannot be implemented in silicon. Therefore, separate optical and electrical devices must be grown with different processes and then assembled. In addition, system and service providers need to be cognisant of the inherent performance limitations with transceivers built from discrete parts. While short reach EPON transceivers already have been optimised down to less than $15, these implementations can only meet low end performance requirements. Networks would require a switch to more costly transceivers to support longer range EPON, 2.5G EPON, GPON or 10G PON. Because most service providers are looking to reap the payback benefits of their investments in fibre installations/retrofits over the shortest possible timeframes, it doesn't make sense to risk adding the high cost of a forklift changeover of transceiver technology at some point during the payback period. RR: PON, with its high volumes, has always been viewed as the first likely market for PICs. What will be the second? JH: OneChip recognises that optical communications is becoming economically and technologically mandatory in areas outside of traditional telecommunications, such as optical interconnections in data centres and other short to ultra short reach broadband optical networks. OneChip is poised to introduce photonics integration into these and other high volume business and consumer markets, where our breakthrough PIC technology can reduce costs and improve performance.