NO PLANS TO LEAVE
Homegrown, fundamental breakthrough makes local startup a leader in high-speed data transfer
Skorpios Technologies engineer Sharon Zhang picks up a chip next to a wafer.
The New Mexico company has created a new way to build fiber optic transmission devices and is planning a 50,000-square-foot manufacturing plant in Albuquerque.
Its founders say they have no plans to relocate, despite outside interest.
“I live here, I like it here and I want to keep it here,” says Stephen Krasulick, Skorpios president and CEO.
Albuquerque-based startup Skorpios Technologies Inc. could become the high-tech home-run success story New Mexico has been waiting for.
The company, which announced on Nov. 9 that it’s setting up a 50,000-squarefoot factory in Albuquerque, has developed a process for merging silicon with traditional materials used in optical communications — a fundamental breakthrough that industry giants have failed to achieve.
Using silicon in optics networking equipment could radically reduce production costs, by up to 60 percent or 70 percent compared to today’s technologies, according to the company.
And that could make Skorpios the new darling of the rapidly growing optoelectronics industry, which is struggling to cut costs for managing the high-speed data transfer that provides instant access for consumers when using everything from smartphones and computers to high-definition TV.
The company, which launched in Albuquerque in 2009, will ship its first products to paying customers in early 2016, said Skorpios founder, President and CEO Stephen Krasulick. Those products are capable of transmitting and receiving 100 gigabits of data in one second — the equivalent of streaming 20,000 high-definition videos simultaneously or downloading two full-length HD movies in a single second.
“Typically, these products are used in high-speed data and networking centers where they need to transmit huge volumes of data fast between computers and servers,” Krasulick said. “Up to now, we’ve been providing samples to many potential customers, but now we’ve received our first purchase order, which we expect to ship in the first quarter of next year.”
That’s what led to this month’s announcement about Skorpios new manufacturing center, which will be located at an existing facility in Albuquerque.
“We’re in advanced discussions for a building now,” Krasulick said. “We’re moving into an existing structure because we need to move quick, and have it up and running by the beginning of the new year.”
Support lining up
The company and its supporters expect Skorpios to grow fast now that it’s preparing to ship its first products. The firm projects ramping its up workforce from about 50 people now to about 300 by 2017 or 2018.
But, over time, the company could grow well beyond that, given the broad interest it has already generated in the global networking and telecommunications industry.
Giants like Nokia Siemens Networks and Deutsche Telekom of Germany, and Sweden’s Ericcson have all lined up behind Skorpios since 2011.
That year, those three companies — plus two other big industry players who remain confidential — jointly invested $21 million to help Skorpios continue developing its technology.
The company has not publicly disclosed its fundraising in recent years, but corporate backers and venture capital firms have pumped at least two or three times more into the company than the original amount raised in 2011, according to investors.
That includes more than $10 million from Santa Fe-based Sun Mountain Capital, which manages private equity investments for the New Mexico State Investment Council, giving the state a significant stake in the company. New Mexico-based Cottonwood Technology has also committed about $3.5 million.
In addition, state government is providing $5.5 million from its Local Economic Development Act Fund and the City of Albuquerque another $1.5 million to help Skorpios establish its new manufacturing facility here.
The secret sauce
The backers are betting big time on Skorpios because it has been able to do what other industry leaders have been seeking unsuccessfully for years, which is to integrate silicon
into photonics products to lower costs, and increase manufacturing and operating efficiencies.
“Skorpios has developed the technology to integrate optics and electronics at a price point and scale no-one else can do,” said Lee Rand of Sun Mountain Capital. “Everybody today is looking for that high-value optical electronics integration, not just for communications technology, but for electronics and even medical devices. This company has a true platform technology with many applications that could not only allow it grow into a sustainable firm with a long future, but one that could actually anchor an emerging industry in New Mexico.”
The company’s breakthrough is not the speed at which its technology can transmit data, but rather that it’s able to put all that capability on a single silicon-based wafer, making production of its chips far cheaper than the other optics networking products that industry leaders produce today to manage high-speed data.
That’s because silicon is much less expensive than the materials now used in optics communications, such as gallium arsenide or indium phosphide, which are often difficult to manipulate and frequently require hand assembly.
Silicon is used in nearly all semiconductor technology for digital communications because it’s an inexpensive and efficient medium for conducting electricity. But optical communications need materials that can make lasers, or streams of photons, which is something silicon can’t do.
Skorpios’ secret sauce is its proprietary method of integrating silicon with the other materials in a wafer-scale, standard manufacturing process to make lasers in silicon. That not only cuts production costs, but also increases operating efficiency because much less energy is lost as heat.
Other industry players can and do provide networking products that manage data transfer at speeds just as fast as Skorpios.
“But they’re a lot more expensive, higher power and less efficient,” Krasulick said. “Our products use about onehalf as much energy with one-half the energy loss, and the whole device is about one-fourth the size of other products on the market.”
Moreover, the company has shown that its manufacturing process is scalable and, with ongoing research and
development, it’s able to add more and more capabilities to its chips. That means it can continuously improve its products by increasing the things they can do, adding a lot more bang for the buck.
“The ultimate value is the creation of smaller devices that can do more things with much lower power and much lower cost,” Krasulick said. “Our first product was a single silicon photonics laser, but now we’ve put four lasers, four high-speed modulators and four photo detectors all monlithically integrated on a single piece of silicon. We went from one silicon laser to chips that are now much more complex with much higher levels of integration.”
Game-changer?
The company has filed about 60 patent applications with the U.S. Patent Office and has so far received 25 patents.
With the world scrambling to integrate more high-speed optics technology into nearly everything involving data transfer, Skorpios’ supporters expect industry interest to grow exponentially. That’s especially true given the technologies’ easy integration into data and networking centers, said Albuquerque Economic Development Director Gary Oppedahl.
“They’ve really achieved the holy grail in this industry, because Skorpios has developed a plug-and-play product,” Oppedahl said. “Data and networking centers can just replace less-efficient devices with these new ones by Skorpios.”
Local experts outside the company agree.
“I don’t know much about their business model and I haven’t done any due diligence on this company but, if what they’re saying they can do is true, it could be a game changer,” said Sanjay Krishna, director of the University of New Mexico’s Center for High Technology Materials. “The potential markets for this technology could line up for them.”
Today, data centers are typically working at 40-gigabits-per-second speeds, with the industry now looking to move to 100 gigabits, but they need to find more cost-effective ways of doing it, said Earl Fuller, an electrical engineer and special assistant to Krishna at the CHTM.
“The next generation technology will be at 100 gigabits per second and there’s a future for it at 400 gigabits,” Fuller said. “Skorpios could be at the forefront of all that given their stateof-the-art technology.”