|Mitel Unveils Optical 'Breakthrough' Prototype |
Has G. Guilder said anything about Mitel (MLT)?
Thursday August 10 6:47 PM ET
Mitel Unveils Optical 'Breakthrough' Prototype
By Susan Taylor
OTTAWA (Reuters) - Mitel Corp. (Toronto:MLT.TO - news)(NYSE:MLT - news) said on Thursday it has scored a key technical breakthrough and produced working prototypes of a chip that could cut costs and dramatically boost the performance of fiber-optic networks.
Shares in the phone system and semiconductor company surged by as much as 21 percent after the announcement, as the market continued its love affair with firms developing equipment for the red-hot fiber-optic sector.
Mitel said it is developing a chip that will help create more lanes to carry the voice, data and video traffic on fiber- optic networks. That would make it cheaper and more efficient to transport information over the glass fibers used in those networks.
Known as Dense Wave Division Multiplexing, the chip technology boosts the number of wavelengths, or channels, that are used to carry traffic from a single beam of light.
Mitel said it is developing a device that may cram as many as 80 channels, or wavelengths, onto a beam of light using standard semiconductor materials.
Presently, most technology can handle 16 channels, with 40 channels available in products that use a technique called Arrayed Waveguide Grating, Mitel said.
``We're working on something that has a lot more horsepower to it,'' said Mitel vice-president of communications Jacques Guerette.
Mitel said it is using a technique called Echelle Grating to boost the number of channels rather than Arrayed Waveguide Grating, which it said has capacity, precision and production constraints.
With Echelle Grating a laser is fired at a piece of reflective glass, shaped like a stair, that is mounted on a chip. Multiple reflections are then produced, with some wavelengths canceled and others reinforced.
The technique results in a greater number of reinforced wavelengths, and corresponding channels, than are produced by other grating techniques, Mitel said.
Arrayed Waveguide Grating splits light by creating parallel waveguides on glass substrate, with each waveguide longer than the last so that light entering the device comes out as different wavelengths on the other end.
``The existing fiber-optic industry is a competitor -- this is a technology that seemingly nobody else has, at least nobody else is talking about it,'' said Duncan Stewart, fund manager and technology analyst at Tera Capital Corp. who holds Mitel shares. ''So if it works...that's very, very positive for Mitel.''
Companies developing fiber-optic equipment for internal and external sales include JDS Uniphase Corp. (NasdaqNM:JDSU - news)(Toronto:JDU.TO - news), Corning Inc. (NYSE:GLW - news), SDL Inc. (NasdaqNM:SDLI - news), Nortel Networks Corp. (NYSE:NT - news) and Lucent Technologies Inc. (NYSE:LU - news).
Mitel's ``research breakthrough'' includes capabilities in three key production techniques, Guerette said. The company said it has several proprietary techniques that it can patent for the chip fabrication.
Mitel said it is able to accurately control the thick layers of glass that are deposited on a silicon base for the device, making performance more predictable. It is able to control etching on the glass, for more precise light reflection, and packaging of the devices, the company said.
``Given the success that Mitel has had with their semiconductor line, I would hedge my bets and say what they've have here sounds good,'' said Brian Van Steen, analyst at optical market research group Ryan Hankin Kent.
``I believe that they have something and I believe that they'll be able to capitalize on it.''
Mitel said its products, to be called LightRider, will likely be available to key customers for testing early in 2001.
The technology is aimed at the market for urban networks, estimated presently at $375 million by market researchers Pioneer Consulting LLC and forecast to reach $2.04 billion by 2004.
``It's potentially interesting,'' said Stewart. ``They claim that they can make gratings that are much, much better than the way JDS and other people make them -- that may or may not be true, but it certainly would get people excited.''
Stock in Mitel added C$5.60 to close at C$30.70 on the Toronto Stock Exchange and gained 3-14/16 to close at 20-13/16 in New York.