Is the Photonics Supply Chain Consolidating? Or Not?
A perennial conversation in the photonics industry is whether it is consolidating or not. With every acquisition and merger, it seems to be consolidating. Yet, it is OIDA's observation that there are new suppliers arising every year. More precisely, there is consolidation in mature markets, but there are more suppliers than ever before over photonics generally.
A chart in the April issue of the OIDA Market Update pointed out three main forces driving the industry to consolidate: companies seeking economies through vertical or horizontal integration, retirements in mom-and-pop businesses, and rising barriers to new entrants due to high capital costs.
The chart also listed forces that sustain or increase the number of companies: the inherently fragmented nature of the photonics sector, the use of start-up companies as innovators, and lower cost of capital in certain regions. (See also this article Tom Hausken wrote in 2006 on the topic.) Partly to make that point, the July issue of the OIDA Market Update featured several small or new companies with emerging technology, and there are dozens more that appear every year in photonics.
What is often overlooked is that new suppliers arise in product areas outside of the territory in which most companies operate. For example, the manufacture of optics for displays and consumer image sensors is largely in Asia, which will be largely unnoticed by suppliers selling into specialty industrial markets in North America.
Suppliers are cautioned to take note of these hidden competitors, which are hidden only because they don't yet compete in other sectors. A company might cleverly find an opportunity in a new application with an entirely new approach, and capture product share from comfortable suppliers. Even as suppliers in a product segment seem to consolidate, the segment may still be porous, and not as consolidated as might appear. Moreover, some of these new approaches may seem inelegant - not much competition at all - but may provide a more compelling solution than more expensive, traditional approaches.
|OIDA Advisory Board and Council
University of North Carolina
HHP and Swiss Photonics and Laser Network
EOvation Technologies, LLC
Elizabeth Rogan, The Optical Society
Another Source of Funding: Innovation Grants
There has been a lot of chatter in the U.S. lately about the possibility of a federally co-funded institute in photonics. OIDA would like to remind members not to forget other opportunities for public co-funding of photonics, including small-business grants.
Small-business grants, such as SBIRs (Small Business Innovation Research grants), are angel or even pre-angel funding of ideas ripe for commercialization. OIDA sent an alert to members on August 21 for an open SBIR solicitation in optical networking components, offered through the U.S. Department of Energy (DOE). Letters of intent were due September 2, with the applications due October 14. The DOE is investing in the technology to advance its interest in supercomputing. Its role as an end-user is not big enough to support companies dedicated outright to it, but it is big enough to make its own investments to nurture innovation.
SBIRs are sometimes associated with companies that mine the program without carrying the process to successful commercialization, but most companies lack an understanding how to continue the process further: establishing a program of record through U.S. funding agencies on to the commercial sector. This process is intended to move innovations through the gap - the Valley of Death - illustrated in the figure below from the White House, including the federally-defined Technology Readiness Levels (TRLs).
OIDA sponsored a webinar featuring DOE's SBIR/STTR program in June, and OIDA will feature specific SBIR programs and how to continue the federal funding process to commercialization in upcoming events. For more information, contact Laura Kolton at OSA.
OIDA Doubleheader on November 4 and 5
OIDA is hosting two events on November 4 and 5: the 21st OIDA Annual Forum and the OIDA Workshop on State of the Art Integrated Photonics. The events will be in Washington DC at OSA headquarters.
The Annual Forum features speakers on a range of photonics topics, aimed at an executive-level audience. It is an opportunity for the community to come together away from the distractions of other meetings to assess the industry. It will feature a high level view on the markets, perspectives from the financial sector, speakers from U.S. government funding agencies, and more.
The workshop will be the latest in a series on integrated photonics, held every year for the last several years. This year it will review the state of commercialization of integrated photonics. The workshop is not aimed at laboratory-based experimental results, but rather to assess where commercial products are today and what technology is best suited for which applications.
Registration is free to OIDA members until October 4. For more information, please contact Jessica Pagonis at OIDA.
Welcome New OIDA Members
Public Relations Corner
OSA Media Monitoring Report
New for OSA Corporate Members - sign up to receive a weekly media monitoring report from OSA. Reports are distributed weekly by the OSA public relations team and highlight business and research news from the optics and photonics industry. To sign up to receive the media monitoring report or for more information about complimentary OSA Corporate Member PR benefits email Lyndsay Meyer, firstname.lastname@example.org.
New This Year at FiO!
Trying to get press coverage for your company, but aren't sure which outlets to target? Interested in social media, but not sure how to get started? Curious about what PR benefits come with OSA membership? New this year, OSA Corporate Members that are exhibiting at OSA's Annual Meeting, Frontiers in Optics, can now book one-on-one, 30 minute appointments with OSA's public relations team to discuss anything from press release writing to media relations and social media. Spots in the program are limited, so contact Lyndsay Meyer at email@example.com by October 15 to set up yours today.
Showcase Your Company's Innovations by Publishing in Applied Optics
Applied Optics has created a new publishing opportunity called Engineering and Laboratory Notes (E&L Notes). E&L Notes are brief articles that highlight hands-on skills and laboratory techniques for the design, analysis, fabrication, integration, alignment, and measurement techniques used when creating optical components and systems. E&L Notes is a unique way to publish observations from your engineering notebook in OSA's journal for applications-centered research, Applied Optics.
New to Applied Optics?
Celebrating more than 50 years of publication, Applied Optics is a highly regarded journal that features content on applied research in optics, photonics, imaging, and sensing. Content from the Journal is downloaded more than 1 million times a year and is accessible to readers in 1,500 plus institutions around the globe.
To submit your notes, visit the E&L Notes webpage.
Federal Grant Opportunities
Department of Defense
Department of Defense/Defense Advanced Research Projects Agency (DARPA)
- Night Vision Technologies, Post Date: August 18, 2014, Close Date: August 15, 2019, Funding Opportunity Number: W909MY-14-R-D010
Description: This is a combined synopsis/solicitation for commercial items prepared in accordance with the format in Subpart 12.6, as supplemented with additional information included in this notice. This announcement constitutes the only solicitation; proposals are being requested and a written solicitation will not be issued.
Department of Defense/Air Force
- DSO Office-Wide, Post Date: June 16, 2014, Close Date: June 16, 2015, Funding Opportunity Number: DARPA-BAA-14-46
Description: The mission of DSO is to identify and pursue high-risk/high-payoff research initiatives throughout a broad spectrum of science and engineering disciplines and to transform these initiatives into important, radically new military capabilities. In support of this mission, DSO is soliciting innovative research concepts of interest to defense and national security. For Questions and Assistance: DARPA-BAAfirstname.lastname@example.org
National Institute of Standards and Technology (NIST)
- Open Innovation and Collaboration, Post Date: July 10, 2014, Close Date: July 12, 2019, Funding Opportunity Number: BAA-RQKD-2014-0001
Description: Open innovation is a methodology to capitalize on diverse, often non-traditional talents and insights, wherever they reside, to solve problems. Commercial industry has proven open innovation to be an effective and efficient mechanism to overcome seemingly impossible technology and/or new product barriers. AFRL has actively and successfully participated in collaborative open innovation efforts. While these experiences have demonstrated the power of open innovation in the research world, existing mechanisms do not allow AFRL to rapidly enter into contractual relationships to further refine or develop solutions that were identified. For Questions and Assistance: email@example.com
- AFRL/RXM Manufacturing Technology Open BAA, Post Date: June 24, 2014, Close Date: June 24, 2019, Funding Opportunity Number: BAA-RQKM-2014-0020
Description: Air Force Research Laboratory, Materials & Manufacturing Directorate is soliciting white papers and potentially technical and cost proposals under this announcement that supports the needs of its Manufacturing and Technology mission. Manufacturing Technologies that focus on strengthening defense manufacturing capabilities and efficiencies and transitioning capability to the factory floor are of interest. Descriptors of Manufacturing Technology interests are presented in two contexts; that of manufacturing technology competencies and that of Air Force application area needs.
- Award Competitions for Hollings Manufacturing Extension Partnership (MEP) Centers in the States of Colorado, Connecticut, Indiana, Michigan, New Hampshire, North Carolina, Oregon, Tennessee, Texas and Virginia ,Post Date: August 1, 2014, Close Date: October 15, 2014, Funding Opportunity Number: 2014-NIST-MEP-01
Description: NIST invites applications from eligible applicants in connection with NIST's funding up to ten (10) separate MEP cooperative agreements for the operation of an MEP Center in the designated States' service areas and in the funding amounts identified in Section II.2. of this FFO. NIST anticipates awarding one (1) cooperative agreement for each of the identified States. The objective of the MEP Center Program is to provide manufacturing extension services to primarily small and medium-sized manufacturers within the State designated in the applications. The selected MEP Centers will become part of the MEP national system of extension service providers, currently comprised of more than 400 Centers and field offices located throughout the United States and Puerto Rico.
Call for CLEO: Applications & Technology Papers!
Submit your work to Applications & Technology, featuring new optical engineering excellence criteria for 2015. CLEO: Applications & Technology presents the latest results in applied optics and photonics development and discusses how these technologies can be used in demanding applications. New components, optoelectronics, and laser systems are demonstrated in real-world environments where innovative commercial technologies emerge. Submit your work to 4 key categories including Industrial Applications and Photonic Instrumentation & Techniques for Metrology & Industrial Process.
Submission deadline: 16 December 2014, 17:00 GMT
Are You Taking Advantage of All of Your Member Benefits?
Check out the complete list of benefits available to you as an OIDA member. These now include OSA Corporate Member benefits such as:
- Secure the Right Talent through WORKinOPTICS.com. Post 20 job openings at no charge, with additional postings at 50% off.
- Gain exclusive access to OSA's individual members -- more than 18,500 optics professionals. Your first mailing list order includes 5,000 names at no charge.
- And More - Learn more about all of the OIDA/OSA Corporate Member benefits. Have questions about your membership? Contact Regan Pickett, firstname.lastname@example.org, 1.202.416.1474.