Member News - October 2015

Industry Member News

08 October, 2015

OSA Corporate Member Newsletter
In this Issue:

OSA Focuses on Export Control
OSA is continuing a strong effort to influence the Obama Administration's proposed changes to export control regulations. This much is clear: the Administration is proposing to substitute a much larger set of pages of regulations to replace the existing regulations. Also clear is that the impact would be substantial to many companies, and may not come until long after the rules are written. What's not clear, however, is whether we have identified all the consequences. Besides identifying objectionable sections, OSA is also urging a longer review.

In early May, the Obama Administration released proposed rules updating the International Traffic in Arms Regulations (ITAR), which controls the export and import of defense-related articles - specifically Category XII of the U.S. Munitions List. The proposed rule will also affect the Commerce Control List. Category XII includes optics, photonic laser commodities and components. These changes are part of the Obama Administration's export control reform initiative. Category XII, arguably one of the most difficult sections, was saved until the end of the process. Once the rules were issued, OSA kicked into high gear in letting our members know about the rules and the chilling impact, if implemented, on our industry. A public comment period was held and there were an overwhelming number of responses to the department of Commerce and the State Department rule.

Meanwhile, OSA organized efforts on Capitol Hill. Along with our partner SPIE, we visited over 25 Congressional offices educating them about the optics and photonics industry and the proposed rules. We requested that Congressional offices weigh in with the Administration and urge for a rewrite of the rules. Senator Chuck Schumer (D-NY) a strong champion of optics and photonics did just that and contacted the Departments of Defense, Commerce and State. On the West Coast, Congressman Mike Honda (D-CA), organized a group of California House members and also urged for a rewrite.

There will likely be a second proposed rule either this fall or early next year in which industry will once again need to weigh in with the Administration. We will certainly keep you updated on any changes through our OIDA alerts and newsletter. In the meantime, if your company will be severely impacted by the May proposed rules, we would like to hear from you. Please contact Laura Kolton, Government Relations Director at 202.416.1499.

OSA Industry Development Committee

Thank you to the volunteers who oversee the programs and services available to the Industry Community.
 • Jean-Michel Pelaprat,
    Figulus, Chair

 • Allan Ashmead,

 • Henrik Skov
    Ibsen Photonics

 • Simin Cai,

 • John Dexheimer,
    Lightwave Advisors

 • James Fisher,

 • Alex Fong,
    Gooch & Housego

 • Steve Grubb,

 • Fred Leonberger,
    Technologies, LLC

 • Claudio Mazzali,
    Corning, Inc.

 • Mike Mielke,

 • Jerry Rawls,

 • Martin Seifert,

 • Costel Subran,
    Opton Laser

 • Christoph Harder,
    Harder and Partner,
Biophotonics Funding in Tight Budgets
We reported last month that the U.S. National Institutes of Health (NIH) funds about $100 million in R&D in biophotonics. That's the good news. Other good news is that biophotonics appears to be growing in use as a tool within NIH, according to searches on key words in grant proposals that show a strong upward trend.

The bad news is that U.S. funding of NIH overall is declining in constant (adjusted, real) dollars. The chart shows funding of NIH and the (much smaller) Department of Defense medical research programs. Not shown for the period are programs in the Department of Energy and the National Science Foundation. (For more information see the June issue of the OIDA Market Update.) And it now seems unlikely that Congress will reverse this trend anytime soon.

Source: AAAS (2015)

The European Commission has budgeted EUR 7.5 billion over 7 years for the Health, Demographic Change and Well Being Work Programme within the Horizon 2020 budget—amounting to a fraction of the U.S. NIH budget. There are other programs budgeted within Horizon 2020, such as the Innovative Medicines Initiative, the Human Brain Project, an industrial leadership program in biotechnology, and the Food for Life European Technology Platform. And of course, member countries also fund their own national programs. It's unclear how this adds up, and OIDA is investigating biomedical spending in Europe and Asia.

More importantly, however: where is public and private funding going and is it going to the right places? OIDA will be exploring the allocation of funding in a series of meetings, beginning with a Town Hall Forum in San Jose on October 21. We hope to see you there.

The Audacity of Customers
It's tough being the supplier. At a recent industry event, a speaker for a major customer of photonics components said he had a theory that the industry was underinvesting in 100G technology because of the lingering of the Telecom Bubble. He didn't use the word "trauma," but he confirmed privately that was what he meant.

Never mind that the Telecom Bubble was the largest speculative bubble in financial history, in absolute terms. Or that placing bets on 100G standards can quickly go wrong, as the whims of the market shift or new standards too-quickly supercede old ones. Wrong investment decisions aren't necessarily career-ending, but they can certainly send a career on a detour. Suppliers struggle to be profitable, even as customers like Google, Facebook, and others enjoy ~20% net profit margins. Recent announcements of Finisar's cost-cutting and Avago's sale of optics product lines to FoxconnM (more details here) highlight the difficulty for component suppliers.

It bears repeating: suppliers in the optical communication sector invest about 15% of their revenues into R&D, but most of it goes toward existing product lines—expensive qualifications for new modifications and so on. Only about 10-30% of R&D investments go to higher risk ventures. That amounts to about 2-3% of revenues. Finisar is the largest independent supplier in our industry at about $1 billion in revenue, so that's only $20-30 million per year. And all of the other companies (and captive operations like those of Cisco and IBM) are smaller than Finisar.

Source: OIDA
That may seem like a lot of money, but the legacy investments of the Telecom Bubble are almost exhausted. The next product generation will require fresh investment, and this time it won't be cheap. For example, it takes $200-300 million and many years to develop integrated photonics at a commercial, for-profit level. Faced with that, companies must partner with other companies—perhaps in Asia—or try to extend their existing investment and eventually exit the business.

Customers can make good partners, but they must be willing to bear some of the risk. Meanwhile, there is a new generation of engineers and managers doing great things in our industry. Let's hope they understand this and don't forget the mistakes of the past.

RSVP Now for OSA's Free Town Hall Forum on Biophotonics
Wednesday, 21 October 2015, 6:00 - 8:00 P.M., San Jose, CA, USA

Please join us for an open town-hall meeting, where thought leaders debate and share perspectives that are critical to the rapidly expanding biophotonics market.

Questions to be discussed include:
  • What is the enabling technology that has the most market traction?
  • What are the challenges and opportunities among photonics technologies today?
  • Where is the best potential for funding?
Learn more about the event and see the speakers here.

This event's new, interactive format will prioritize key findings for future use by the community. Happy hour drinks and snacks are complimentary.

RSVP now by emailing Jessica Pagonis at

To submit your questions and topics for discussion email Tom Hausken, Senior Industry Advisor, OSA, at

Unique Career Opportunity for Scientists - Help Shape Federal Science Policy!
Looking for a way to combine your interest in policy with your science background? Become an OSA Congressional Fellow! OSA hosts two fellowships - one jointly with the Materials Research Society and the other with SPIE. The program is a unique opportunity for scientists and engineers to gain experience in public policy and help influence decision makers. Congressional Fellows spend one year on Capitol Hill working as special legislative assistants on the staff of a member of Congress or Congressional Committee. Applicants must have a Ph.D. by September 1, 2016 to be eligible; mid- and late-career applicants are encouraged to apply as well. A competitive salary and a health insurance/travel stipend are provided. For more information on requirements and how to apply, visit the OSA Congressional Fellowships webpage. The application deadline is Friday, January 8, 2016.

Congratulations to the Logic Analysis Tool Team - 2015 Paul F. Forman Team Engineering Excellence Award Winners
The Logic Analysis Tool (LAT) Team will receive the award during the plenary session at OSA's Annual Meeting, Frontiers in Optics (FiO), which takes place 18-22 October in San Jose, California, USA. The group included researchers and scientists from - MIT, Photon Spot, Inc., DCG Systems and IBM, and was led by Dr. Euan Ramsay of DCG Systems. The team developed an optics-based LAT that detects the time resolved emission of light from switching transistors within integrated circuits, operating down to .5V, thus creating a new tool for device analysis in advanced process technologies. Learn more about the 2015 Paul F. Forman Team Engineering Excellence Award Winners.

NPI Promotes Photonics and Competiveness to Congress
On September 10, 13 members of the National Photonics Initiative (NPI), including seven OSA members, visited 36 Congressional offices on Capitol Hill to highlight the importance of optics and photonics. The group focused on workforce development, competiveness and export control issues. To learn more about these subjects and how policy affects industry, please visit the NPI website. If you would like to receive email updates about upcoming advocacy activities that OSA is hosting or participating in, please join the OSA Optics Legislative Network.

OIDA Workshop on State of the Art Integrated Photonics
3 November, OSA's Office in Washington D.C., USA
Attend and learn about the opportunities—and limits—of commercializing integrated photonics. This must-attend workshop will answer the following questions:
  • Where is the limit of discrete photonics?
  • Where is manufacturing economical and where is it not?
  • How is this threshold different for different applications?
  • What is the role of integrated photonics in the data center?
  • What is the future for commercialization of integrated photonic sensors?
Register today. Learn more.

Enter the Your Company's Technology in the OSA Enabled by Optics Contest — Submission Deadline: 5 November 2015
You know the extraordinary impact optics technology has played in making technological advances and the critical role it plays in everyday life. This is your chance to explain how your technology has impacted our world. Provide a creative narrative on how your technology has impacted Society.

What You Will Win: A lot of publicity including an OSA produced video featuring your company and the specific technology highlighted in your entry.

Read more and check out the video about last year's winner. Share your story, explain the impact, and win the contest!

Call for Nominations: Berthold Leibinger Innovation Prize for Outstanding Innovations in Applied Laser Technology
Applications and nominations are being accepted through December 31st for the Berthold Leibinger Innovationspreis,honoring implemented inventions or technical development in applied laser technology. The ninth call for the innovation prize falls during the UNESCO's International Year of Light. Eligible to apply or to be nominated are individuals and project groups worldwide with innovations whose main development efforts and market potential lies in the application or generating of laser light.

Closing date: 31 December 2015
Prize money: First prize: 30.000 €, Second prize: 20.000 €, Third prize: 10.000 €

Learn More and Submit Your Application Today

New Applied Optics Engineering and Laboratory Notes Now Online
Applied Optics now publishes articles called Engineering and Laboratory Notes (E&L Notes). These articles are intended to give engineers and technicians a venue to highlight laboratory techniques and hands-on skills required for the design, analysis, fabrication, integration, alignment, and measurement of optical components and systems.

Check out these recently published E&L Notes: Want to publish an E&L Note? Submit your manuscript today! If you aren't yet ready to submit, read this editorial by the E&L Notes Editor Brian Monacelli to learn more.

Sponsor the OSA Centennial Celebration & Connect with 270,000 Industry Leaders All Year Long!
The Optical Society is celebrating its 100th Anniversary in 2016, and we are inviting your company to be part of our festivities. Choose one of our three Centennial Sponsorship options and your company will be highlighted in a year-long calendar of special events and programs that will provide you with high visibility in the optics and photonics market. To learn more contact Centennial Sponsorships at +1 (202) 416.1957. A sponsorship opportunity like this happens only once every 100 years!

Looking for another way to participate in this historic celebration? We're launching a social media photo campaign titled, I Am #OSA100 Proud. We invite all optics and photonics professionals to use Twitter and Facebook to show their pride by posting a creative message that says: I Am #OSA100 Proud. The goal is to capture photos of industry members, students, and scientists in the lab, office, classroom or other setting demonstrating OSA pride and excitement for 100 years. Tweet your photo or email Your photos will be added to The Optical Society's Facebook album and posted on The Optical Society's Twitter account. You will be #OSA100 famous!

Want to get even more insight and access to great discussions about optics and photonics?
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