Read About LIDAR SPACs, the Talent Shortage, Special Events, New Reports, and Other Noteworthy News, Opinions & Opportunities
In this Issue:
About Those LIDAR SPACs
Recently, you may have noticed that several companies making LIDAR systems were listed on publicly-traded stock markets, specifically the NASDAQ and New York Stock Exchange. Already five companies have gone public in this manner since a year ago, with two more expected soon (Aeye and Quanergy). In addition, three other companies have announced plans to go public in other optics-based products: Rockley Photonics (in integrated photonics), IonQ (in quantum computing), and Velo3D (laser-based additive manufacturing). They are all using SPACs—special purpose acquisition companies—as the route to enter the public stock market (see here and here).
The number of companies using SPACs has surged in the last year as a way of going through a "side door" to a public listing. First, a SPAC—also known as a blank check company—is formed from cash and listed on the market. It then looks for a company to buy and partners to co-fund the investment. After the acquisition, the SPAC's name and stock ticker symbol change to reflect the acquired company’s name. This "reverse merger" method is not new, but it has suddenly become popular, especially for technology companies. It contrasts with the conventional but cumbersome process of selling an initial public offering (IPO) of stock.
The chart below shows the stock price performance of the five LIDAR companies since the date that their stock began trading on the public markets as the new company. In addition, the chart includes the SPAK index (the grey dotted line), which reflects the performance of a wide range of new SPAC-based stocks sold as an exchange-traded fund (ETF). Each of the five companies appears to have already gone through one cycle, with share prices declining this spring, even as the broader stock market gained in value through the period. Most of this reflects the market's view of SPACs generally (here), as indicated by the SPAK index. Investors may perceive that there are too many SPACs, and therefore too many investments in lower-quality companies. Once listed, though, it wouldn't seem that the value of a LIDAR company like Luminar would correlate with companies like Virgin Galactic or Draftkings, or even electric car companies like Lucid Motors or Fisker. But there appears a correlation nonetheless.
Source: OIDA, from daily closing prices.
Another factor to the declining prices may be the sudden rush of LIDAR companies to the stock market. At an OIDA workshop just a couple of years ago, there was talk that there were nearly 100 companies making LIDAR equipment for driverless cars. It was clear even then that not all of them could survive the inevitable shakeout, but what wasn’t clear was which ones would survive. The companies recently listed on the stock exchanges are survivors, and a few of them help validate the opportunity to investors. In addition, investors in the remaining privately-held LIDAR companies must be considering that it may be better to take advantage of easy money from SPACs while it lasts. However, too many companies going public can dilute interest in the segment.
Meanwhile, Velodyne Lidar has made it worse for itself by creating a family feud that drove down its share price. The founder and majority owner, David Hall, is a mechanical engineer and a true Silicon Valley entrepreneur. He founded Velodyne in 1983 to make audio speakers and pivoted to LIDAR after entering the DARPA Grand Challenge for a self-driving car in 2004. He also founded Velodyne Marine to design an active stabilization system for boats. After Velodyne Lidar went public, Hall stepped down from running the company but has been in an ongoing feud with the president and board of directors, including his brother-in-law (here). It must make for awkward family gatherings. At this writing, the feud appears to be at a standoff.
It's important to remember that LIDAR is a long-term prospect, entirely apart from the performance shown so far. Over time these stocks will no longer be new SPAC stocks, becoming tech stocks in their own right, and judged by their individual performance, not their association with SPACs. Becoming a publicly-traded company is not for everyone, but it is important to a healthy industry and economy. It is an exciting time for these ten companies (including Rockley, IonQ, and Velo3D), and surely there will be more to come.
The OIDA Newsletter last reported on the LIDAR market in January 2021 (here). See also articles in OSA's Optics and Photonics News here and here, and an OSA podcast interview with Luminar's co-founder and CTO Jason Eichenholz here.
The Other Supply Problem Needs Champions—for Talent
Everyone talks about workforce development, but does anybody do anything about it? Mark Twain didn't say that, nor did he likely coin a similar phrase about the weather. But it summarizes one of the major challenges of our industry: we have a talent shortage, but what can we do about it?
Everyone seems to agree that companies want to fill open positions for optics and photonics engineers and technicians, but they can't find enough prospects to fill them. More precisely, companies want to pay affordable salaries for world-class talent who can walk into positions with a minimum of training. That isn't entirely realistic unless the industry is contracting and creates a surplus of talent—a situation nobody wants. Poaching individuals from other companies is a zero-sum game unless they poach people from adjacent fields, and that likely requires some retraining. Therefore, the shortage of talent is like a shortage of components: it can delay sales, force companies to find alternatives, slow innovation and restrict competitiveness.
Universities and community colleges are the primary sources of new talent, and graduates are arguably their most important output, more than research. While companies complain that graduates are too inexperienced in the ways of manufacturing and business, it is the only way to bring in new talent, and companies have to expect to do some on-the-job training. But that doesn't seem to be enough. Students today are interested in topics like computer science and environmental studies, or topics outside of STEM altogether, like business and law. Government agencies can fund specific projects, but how do you motivate students to study optics? There is also the diversity challenge: how can we grow and support a more balanced workforce?
However, talk about workforce development is often empty, concluding that it ultimately falls to primary and secondary schools to get students, especially girls, interested in optics. It's all true, but closing national deficits of interest in STEM careers is beyond the scope of what the optics industry can do alone.
Source: OSA Membership.
What we can do is find and support more champions; that is, advocates. A champion is the high school teacher or community college instructor who creates a small program to train students for local jobs. A champion is a company that commits to support interns in summer jobs. Local cluster organizations can help by using their connections between local colleges and companies to ensure that the pipeline doesn't dry up. Clusters can also lead efforts to increase local funding for programs in optics and photonics, such as for instructors, lab equipment, and co-funded internships. There have been several recent events and reports addressing the issue, too many to list here. OSA is part of much of it, such as the following:
- The OSA Foundation hosts the Innovation School, Career Accelerator and continuing education programs, travel grants, scholarships and much more. Find out more (here) and get involved!
- AIM Photonics Academy published in February 2021 a workforce roadmap for the fiber and photonics industry, with support from OSA. Download it here.
- NSF sponsored a workshop to develop an undergraduate curriculum in quantum engineering, with a report forthcoming. OSA hosted the workshop. See here.
- OIDA hosts webinars on workforce issues, such as the ongoing Beyond Academia program for students and early career professionals. See here.
- OSA hosts events and webinars for each level of professional and career fairs in partnership with our Work In Optics job website that brings employers and prospects together. See here & here.
OIDA last wrote about workforce development in the March 2021 issue of the OIDA newsletter.
Welcome New OIDA Members
Summer Reading Material Available to OIDA Members
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OIDA reports are available to all employees of OIDA member companies who selected the Market Intelligence & Advocacy benefit category. We encourage you to browse the OIDA Publications and Reports Center to see everything available to you.
OSA Laser Congress and Exhibition Confirms Virtual Format
The OSA Laser Congress has announced it will convene in an interactive, all-virtual format, 03-07 October 2021. The Congress is comprised of two topical meetings, the Advanced Solid State Lasers Conference and the Laser Applications Conference. This format, which includes technical sessions and a virtual exhibition will expand engagement with the event's global audience through live and on-demand content. The time zone for the Congress schedule is Eastern Daylight Time Zone (EDT, UTC-04:00). Learn more and participate from the safety and convenience of your home or office.
Recognize Contributions to Fiber Optic Technology
The deadline to nominate a colleague for the 2022 Tyndall Award, is approaching. Please take advantage of this opportunity to recognize those making outstanding contributions in any area of optical-fiber technology, including optical fibers themselves, the optical components used in fiber systems as well as transmission systems and networks using fibers. This award is co-presented by OSA and IEEE Photonics Society and supported by Corning Incorporated.
Submission Deadline: 10 August.
Recognize Contributions to Quantum Optics and Atomic Physics
The deadline to nominate a colleague for the 2022 Walther Award, is approaching. Please take advantage of this opportunity to recognize those making distinguished contributions in quantum optics and atomic physics as well as being leaders in the international scientific community. This award is co-presented by OSA and Deutsche Physikalische Gesellschaft (DPG). Support for the award is provided by Toptica Photonics AG and Messe München International - LASER World of PHOTONICS.
Submission Deadline: 10 August.
New Digital Programming Available Live and On-Demand
What are your optics and photonics interests? Our digital library has something for everyone. OIDA management and OIDA members have produced a series of webinars and virtual Technology Showcases that are available at no charge. Our curated playlists feature global thought leaders, optics and photonics pioneers and industry icons, offering actionable advice, information and inspiration. We encourage you to browse our growing list of upcoming events and view on-demand recordings as they become available. And there is much more! Check out the OSA We Are On webpage for more high quality webinars on career development from the OSA Foundation and the OSA Career Lab.
Invitation to Join the OIDA Optics and Photonics Industry LinkedIn Group
Join 4,000+ of your colleagues in our OIDA Optics & Photonics Industry Network LinkedIn Group. This one-of-a-kind Forum for Industry lets you participate in discussions about cutting-edge issues. Extend your professional network. Exchange information about problems, ideas and solutions. Collaborate with experts in your field. Now is the perfect time to build a relationship with fellow optics and photonics professionals!
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OIDA (OSA Industry Development Associates) Council
Thank you to the volunteers who oversee the programs and services available to the Industry Community.
Inrad Optics, Chair-Elect
Plymouth Grating Laboratory, Inc.
Cedric F. Lam,
Double Helix Optics
Optimax Systems, Inc.