Strategically Blogging

When Will OLEDs be the Next Big Thing in Lighting?

Stephanie Pruitt 10/08/2014

OLEDs have been gaining in popularity lately, mainly in displays, but also more recently in general lighting. They offer many benefits over traditional and LED lighting, including being a surface emitting light source (as opposed to point emitting), being extremely thin, and having the capability to be flexible and even transparent. OLEDs open the doors to really innovative and creative light forms that were previously not possible with traditional lighting. However, they still have a ways to go in efficacy, lumen output, and price compared to their less expensive inorganic counterparts that are still struggling to really penetrate into the market.

Shonika Vijay

High-End Lighting Markets for Solid State Lighting

Shonika Vijay 09/30/2014

Lighting has always been seen as a commodity market. In fact, most people buy their light bulbs from the same place they buy their milk. It is a price war out there with slim profit margins on lighting products; meanwhile, the market keeps demanding higher quality. The general indoor lighting market mostly consists of the following form factors: downlights, troffers, suspended pendants, track lights, and high bay lights (a detailed market report of general lighting luminaires with these form factors along with all technologies will be released this November). Downlights and troffers make up the majority of the installed luminaire base for all regions. In order to compete for penetration in these installed luminaire bases, LED lighting has had to slash its prices while making sure it can sustain the light output levels of halogens, incandescent, and fluorescent technologies.

Fiber Laser Market Continues to Evolve

Allen Nogee 09/05/2014

I’ve always been a person who has been very interested in the latest technology, and sometimes it’s hard for me to believe how much technology has changed over the years.

Everything from flat screen TVs, DVRs, audio equipment, cables and wiring, computers, tablets, smartphones, and so many others have evolved over the years, and in most ways, the new technology is quicker, smaller, cheaper, and more energy efficient. Today we take all these things for granted, but it wasn’t that long ago that a flat screen TV or a smartphone was a novelty. Today we just can’t even imagine living without these things.

Martin Shih

A Win-Win Situation: Cree Announces Investment in Lextar through Private Placement

Martin Shih 09/05/2014

Cree recently announced plans to invest US $83M in Lextar Electronics, one of Taiwan’s major LED manufacturers, in order to acquire 13% of Lextar shares and to enter a supply/royalty agreement. Cree will become Lextar’s second largest shareholder (AUO, Lextar’s parent company, is the biggest shareholder) and obtain one member of BOD. This deal is expected to be done at the end of 2014 and the lock-up period is 3 years, which means Lextar will reserve its capacity for Cree for 3 years.

Lasers in Medical Imaging: The Forecast Looks Very Bright

Allen Nogee 07/11/2014

Almost all medical imaging to date has used one of three technologies: X-rays, magnetism (MRI), or ultrasound. X-rays alone have been used for almost 120 years now, and although today’s imaging technology has improved vastly over the many years, the fact remains that x-rays, ultrasound, and magnetism are all technologies that, due to many factors, produce coarse images, at least by today’s standards. But what if a very coherent light source was used instead, maybe a laser?

Actually, Optical Coherence Tomography (OCT), which produces images based on the reflections of coherent light, is not a new technology. OCT has been used since the early 1990s, especially in the area of ophthalmology, where the images produced by OCT are 100 times finer than standard images produced by ultrasound. In just the last five years, OCT has become one of the most important retinal imaging techniques used today.

Consolidation, Part 2--Is Oclaro consolidation or redistribution?

By Tom Hausken
So Bookham and Avanex finally merged, forming Oclaro . This is a sign that the industry is consolidating, right? Reducing the number of suppliers by one, yes. But it may just amount to moving market share around, and not necessarily to fewer players.

Bookham and Avanex don't have greatly overlapping product lines. And the new management claims it will continue manufacturing parts the way it has been. That is, it will keep the Bookham fabs and its Shenzhen facility but will also keep using Fabrinet as Avanex did.

The company points out that now they have a wider range of products to compete against bigger competitors, like JDS Uniphase and Finisar. I've never fully believed the one-stop-shop argument though. Of course, Cisco and any other customer would like to reduce its list of suppliers. But the customers also want suppliers to be competitive, and they want the best products they can find, provided that the supplier is qualified. Grouping products into one company doesn't necessarily make Oclaro more competitive in those products.


There will certainly be some synergies gained from consolidating various functions, such as procurement and corporate overhead. The figure shows Oclaro's vision of the gains it can make in gross margin from the merger. One of the bigger synergies would be the use of the Bookham fabs to supply chips for Avanex products. This is a change in market share, shifting sales from the former suppliers (such as JDS Uniphase) to Oclaro, possibly improving Oclaro's factory utilization. It might also steal some margin from contract manufacturers.


Source: Oclaro


That may turn out real good for Oclaro, although it doesn't necessarily constitute consolidation if it just spreads market share more evenly among some of the bigger players. Without knowing how it plays out product by product, it could actually increase competition and reduce consolidation in some segments.

Oclaro's CEO Alain Couder notes that the company also gets to spread Bookham's credit line over a new balance sheet that is low in debt and with a nice chunk of cash. That's never a bad thing, for Oclaro. And despite claims to the contrary, the management may make more moves once the excitement has died down. Anything that tips the scales dramatically in Oclaro's favor would essentially increase consolidation, even if the number of suppliers is nominally the same.

This may turn out real good for Oclaro. But I wouldn't call it industry-scale consolidation. Not yet.

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