Vendor

Eyed on Global Strategy, Source Photonics Sees A Break-through with Lean Management

Updated:2018/8/21 14:29

Source Photonics was ecstatic about when it announced that they are building up a new fab in Jintan to manufacture optical component chips. Nowadays the capacity to produce optical components chips becomes a very powerful competitive advantage in the optical communications industry. Customers have an increasing need for lower cost and highly reliable products. Source Photonics has kept quiet since it was acquired by a Private Entity firm though it has been leading the optical market through one and another break-through since establishment. Where is it heading in the future? The editor at C-FOL recently had an in-depth talk on this question with Joanna Shou, COO at Source Photonics.

Prior to SP, Joanna Shou held various high-level positions such as Marketing Director of Industry & Building Automation at Honeywell, GM for Greater China at Ingersoll-Rand, and President North Asia at UTC Fire & Security.

Build a world-class optical chips manufacturing base to be the optical component leader

The cost of chips accounts for 30%-40% of the overall cost of a transceiver, and especially when it is used for a high speed and long reach applications, its cost will even account for half of the total product cost. In this sense, it will effectively reduce purchase cost while not being restricted by the vendors with the flexibility for R&D and production if a company is capable of producing chips on its own. Currently most of the world’s leading optical modules manufacturers has the ability and Source Photonics’ R&D advantage has been widely recognized by other Chinese competitors, especially since the U.S government’s ban on ZTE in this year.

Then my first question for Joanna was about the business strategy of setting up a world class InP laser fab in Jintan as announced by SP last September. Joanna explained that Source Photonics had been on its way to deploy its global strategy step by step during the past few years. Its R&D center in the U.S is capable of the early-stage technological resources restore and to develop the high-speed transceiver modules sold in North American market. SPs R&D center in Taiwan focuses on InP chip and high-speed OSA development while the two fabs there take the responsibility to the high-volume production. The Chengdu headquarter owns the high volume OSA/Transceiver manufacturing capacity. And as for the new InP fab in Jintan, it will be used as another significant point in our business strategy. The U.S office boasts powerful resources with the vendors focusing on the next-Gen products R&D including the product line of 100G series (LR4, ER4 Lite and OTU4), 400G series as well as silicon products. Fabs in Taiwan is specialized in R&D of optical chips and high-speed OSA including 25G, 28G and 53G products. Its Jintan fab is to be responsible for the low-speed chips transition and production. The factory in Chengdu owns the advanced and deep knowledge in the R&D of SPs market segment portfolio such as fixed broadband, wireless broadband, optical transmission and datacenter. In addition, high volume production of optical components and modules is also being done in Chengdu.

Notes: SP’s new InP fab in Jintan

The newly built InP fab in Jintan has its strategic role in SPs business roadmap, which has the capacity of MOCVD Wafer, chips TO and OSA production. This fab will also be used to strongly support the chips sales and TO service in the near future. The fab in use now is based in Hsinchu, Taiwan, whose powerful R&D and manufacturing capacity helped Source Photonics rapidly close the deals in Datacom market with high volume and profitable orders. The Jintan fab will be equipped with the production capacity of Taiwan fab and to be at least doubled in optical chips productivity. It will start its operations by the end of this year.

At Source Photonics, the diverse corporate culture and management level make it an unparalleled advantage in chips R&D and talent hiring as compared with its domestic competitors. In the meantime, the ability of being quick to response and volume production builds up its current presence and brand image in optical communication industry.

Continuous technology innovation to find new opportunities with Lean principals

Speaking of the fact that Source Photonics has been keeping low profile in the market in recent years, Joanna indicated that influenced by the downhill trend of fixed broadband market and considering its own product mix, SP is not that eye-catching over the recent years whereas it has been solidifying its foundation. It continues to invest quite a lot in technological accumulation with a continuous breakthrough in Datacom, Transmission and Wireless segments. At OFC 2014, SP marketed its first-in-industry 100GBASE-LR4 QSFP28, the world’s smallest and lowest power 100G module used for data center. In Feb 2016, it announced  another industry-first 25G SFP28-LR module which supports the industrial temperature used in 5G communication. At OFC 2017, SP did the live demonstration of 400GBASE-FR8 OSFP module based on 25GB PAM4 high integration technology. And back to this March, again at OFC 2018, SP showcased 400G QSFP-DD FR8/LR8 and 400G CFP8 FR8/LR8 solutions for datacenter and telecom applications. Focused on 5G market, SP was invited to present at Huawei initiated 50G PAM4 Alliance Panel and jointly released 50G PAM4 Technology White Paper to facilitate 5G transport network commercialization. With the strategy of transforming from telecom transceiver vendor to a Datacom one, Source Photonics is right at the point to spur in the rocketing progress of rate evolving from 10G/40G to 100G/400G.

Besides, SP has taken a down-to-earth attitude in strengthening its production capacity for these years. How should we explain the high management cost brought with the global strategy? Joanna said that in fact the high cost in management is mostly used in daily communication. To lower the communication cost, with the new management team introduced in 2013, Source Photonics took the first lead in the market to introduce Lean Operating Principles. It is required for a company-wide recognition and execution to solve the internal communication problem with Lean tools. The essence and objective of doing this is to establish a corporate culture mechanism which transforms the employees’ mindset, gets rid of wastes, and greatly improves product quality. Lean manufacturing requires a healthy quality system at first, then to streamline the procedures, inventory control and optimize supply chain synchronization from production planning on. This way it could efficiently control the whole production cycle, quality, equipment, market development and sales.

Joanna also pointed out that Source Photonics has kept the execution of Lean management system from 2013 till now and for these five years, the company has witnessed much reform in system structure, operation ways, R&D and production cycles by reducing the wastes. Lean principles increase the profitability of Source Photonics to change the common situation of “small batch but diverse categories” in optical communication market. Nowadays Lean culture is one of the major principles in the daily work at SP.

History never sets back and the opportunity always awaits the trail-blazers who are brave for innovation. Each transceiver manufacturer, when faced with the fast changing market, endeavors to seek for its own advantages to get breakthroughs. As for SPs future, we saw the ease and confidence over the conversation with Joanna. With 5G enlightening the smart life of the globe and the speed rate used for data center operation shifting to 400G or higher rate, there are a lot of unexpected opportunities for the entire industry. Thanks to the strategic innovation, globalization and Source Photonics management system. Source Photonics seizes the pulse to grow with the market trend, which makes us see its positive intrinsic motivation and most importantly its resolution and power to be the leading giant.

 Source:C114
For press release services, please email us at english@c114.net.cn.

Related News

    E-Mail:english@c114.net.cn

    Copyright© 2014 C114 All rights reserved.
    »¦ICP±¸12002291ºÅ-4