SPI Lasers has emerged from troubled beginnings in telecoms to become a major player in fibre lasers, as Warren Clark discovers
SPI Lasers began life as Southampton Photonics Incorporated (hence SPI) back in 2000. It was a spin-out from Southampton University, led by David Payne, director of its renowned Optoelectronics Research Centre (ORC).
The company was initially set up to develop fibre Bragg gratings to groom signals used in ultra-long haul optical telecommunications. With a large amount of venture capital investment, Southampton Photonics developed some basic technology and infrastructure, but before the company was able to trade, the telecom bubble burst. It left the company stranded, along with hundreds of other telecom start-ups.
By 2003, the investors undertook a strategic review of the remains of the company to see if there was a way to exploit the intellectual property of the business. David Parker, who had known Payne for several years and had worked for Agilent and Marconi (in the latter, specifically for the business unit that is now Oclaro), was brought in to lead this review.
‘We looked at the core competencies of the existing business,’ says Parker, now CEO. ‘We looked at various options, such as telecoms and sensors, but decided to target the nascent fibre laser market, which was virtually non-existent at the time. It was effectively a restart for the business.’
With the 35 employees that the company comprised at the time, Parker led a technology feasibility review, resulting in its first prototype fibre laser delivery system, achieving 18.5W of power. ‘We were very proud of ourselves,’ observes Parker wryly, given that the company has recently produced a kilowatt laser.
With limited marketing resources available, SPI identified the key performance attributes of its fibre laser technology, and began approaching lead customers to work with them and develop a product that met their specific needs. ‘This is a business model that continues to this day,’ says Parker. ‘We like to see the environment in which the laser will be working, design it into the process and test its performance in the application area in question.’
The first product emerged in 2005, a CW laser operating at around 100W. ‘Our first commercial success was in supplying that product to a major medical stent manufacturer,’ says Parker. ‘The fibre laser works particularly well in this application, because of the small spot size and high-intensity beam it creates.’
SPI’s products quickly gained traction, because the fibre laser provided customers with numerous benefits. ‘For our first customer, these included a significant increase in quality and a reduction in yield loss, thanks to the high beam quality of the fibre laser,’ says Parker. ‘Another factor is the small and compact nature of the fibre laser. It improved the footprint of having a laser in one’s production line to a point where customers can fit more lasers into a cleanroom.’
Other products soon followed, including a series of nanosecond pulsed lasers, which are used in a range of applications, from simple marking to micromachining, and in markets such as consumer electronics and computing.
Following a couple of years of product development, SPI Lasers floated on AIM (a ‘junior’ stock market in London) as a means of raising further funds. It remained listed until its acquisition by Trumpf in 2008. ‘Trumpf was not the only bidder for SPI at the time,’ says Parker. ‘Ultimately, the sale to Trumpf was the most beneficial to both parties. Trumpf acquired SPI as it wanted access to advanced-level fibre laser technology,’ says Parker. ‘It wanted to incorporate fibre lasers into its own laser systems.
‘From an SPI perspective, we were doing pretty well as a small company. It was obvious to us that, if we ever wanted to be a major player, then the investment profile was just beyond our means at the time. So, being part of a bigger parent company would allow us access to that investment ahead of the curve – in a small company, you’re always making a buck then spending a buck or making continuous calls for investment capital. Neither is ideal in a fast-moving environment with a large competitor.’
Trumpf’s investment has enabled the company to double the size of its R&D operation since 2008, and move into new buildings.
SPI Lasers is now a wholly-owned subsidiary of the Trumpf Group, whose broader industry expertise covers machine tools and laser systems. ‘We are still SPI Lasers as a complete separate entity,’ says Parker. ‘We operate under our own brand, with our own customers (some of whom are even competitors to Trumpf). Clearly, Trumpf is also a major customer of ours. From their point of view, they are assured of a roadmap of fibre laser technology that they can buy in from an owned subsidiary, and incorporate into its future systems.
‘We make our own fibre and fibre components, but unlike Trumpf, we are not a supplier of laser systems, nor are we a laser system integrator. We are a research, development and manufacturing company that owns its own core technology, which we feel is very important.’
Now, on the CW laser side, SPI produces lasers in volume, up to 500W, opening up applications in cutting and welding for relatively light gauge materials, including metals, ceramics and more – and, at Laser World of Photonics in Munich this year, the company announced its entry into the kilowatt arena. ‘This will give us an inroad into thicker-gauge cutting and welding,’ says Parker.
SPI is well positioned to take advantage of broader industry trends. ‘The fibre laser market is growing at a much faster rate than that for general lasers,’ says Parker. ‘We are back in a growth phase after the recession. Fibre lasers are a popular choice as a replacement technology, and more importantly their characteristics are enabling newer markets.’
David Payne left the board of directors at the time of Trumpf’s acquisition, but remains a member of SPI’s technical advisory board. He is also still the director of the ORC. Parker, as well as running SPI Lasers, sits on the management team of the Trumpf Group, and Trumpf also has representation on SPI’s board.
SPI now has more than 250 employees, and is enjoying a period of expansion. Its revenues doubled in 2010 compared to the previous year, and the roadmap of product development promises more diversification. ‘We’re already introducing our latest family of G4 pulsed lasers,’ says Parker, ‘which extends the capabilities of our nanosecond pulsed lasers in terms of pulse energies, power levels and so on. This will allow us to expand into new areas.
‘Over the next 12 months, we intend to become a major player in the kilowatt area, for both cutting and welding applications. We’re also working on numerous other technologies in the background for release at some future date.’
Indeed, a recent investment has been an R&D laboratory located within the ORC, to allow SPI Lasers to work with researchers on future fibre laser architectures.
‘These product and R&D developments will ensure we expand our presence in the marketplace in the months and years ahead,’ concludes Parker.