Source Photonics Secures $100M in Funding and Expands Fabs

Source Photonics has secured $100 million in funding to support its growing data center and 5G business and to increase the scale of its operations. Planned developments include the creation of a new laser fab, upgrades to existing production facilities, and increased investment in the research and development of next-generation technologies.

Upgrades to the company’s fabrication facility in Taiwan have already been completed, and production operations have begun for a new fab in Jintan, China, using the latest funding. The funds will also be used toward investments for advanced coating technologies to enable next-generation lasers and transceivers for the fast-growing 5G and data center markets.

Doug Wright, Source Photonics CEO, said the Internet of Things (IoT), virtual reality, and cloud services are growing in popularity every day, increasing the demand for the best service possible.

“These applications all depend on the next standard of connectivity and 5G depends on the backing of a world-class optical network,” Wright said. “We are extremely proud that our investors have shown this confidence in us and are confident that the investment will support our ongoing work to enable the next era of connectivity.”

The sales of optical components and modules to cloud companies reportedly grew by 63 percent in 2016 and 64 percent in 2017. The growth rate is expected to average roughly 20 percent annually through 2023. Higher growth rates in 2020 to 2022 will be driven by first volume deployments of 400 GbE. This is a result of the rise of 5G and the cloud.

In order to keep up with demand, the new fabrication facility in Jintan will support the industry's global growth. This is projected to double the company’s capacity of indium phosphide (InP) lasers and related components and will augment its existing fab in Hsinchu, Taiwan, which has doubled its output over the past three years.

This investment follows recent expansions at the Taiwan facility that has been producing lasers for more than 20 years. These expansions include significant growth in MOCVD and advanced coating technologies. The Taiwan facility also recently completed expansions to support transceiver assembly in support of customers’ demands for resiliency in their supply chains.

The Jintan fabrication plant includes a fully integrated laser chip production capability, high-precision TO operations, and an advanced research and development facility to support its global technology roadmap and regional customers. Source Photonics’ chip capabilities include base wafer, regrowth, and chip processing, while its TO operations will support the advanced requirements emerging for high-speed PON and 5G markets.

“These new investments support our integrated manufacturing approach, which is critical to meeting the ever-growing needs of our customers,” Wright said. “Managing the entire value chain from laser production through transceiver assembly gives SP differentiated capability that enhances speed to market, yields manufacturing innovations, and offers flexibility our customers demand.”