Effect Photonics is not afraid of competition: ‘Alternatives just make the product stronger’
Photonics is becoming increasingly more important as a technology. More and more devices are being connected via the Internet. The optical chip from Effect Photonics can contribute to a better and faster 5G connection. The international market for this type of product is continuing to grow. “We are keeping our eyes open as to what’s happening in the rest of the world.”
Effect Photonics makes an optical chip that will contribute to the 5G network of the future. ” With this chip, the capacity of fiberglass can be used more effectively because you are able to send multiple beams of light through a cable all at once,” says Docter. The optical chips can, for example, make mobile networks or data centers better and faster. “We can integrate the techniques used in long-distance communication into a chip. This allows us to deliver more speed for a lower price.”
Various applications
CTO Boudewijn Docter considers it important to cooperate with a variety of international companies. “We are now entering a phase where we are outsourcing parts of the production to one or more parties at home and abroad.” He says he wants to see for himself what works best. “We don’t have our own chip factory, but we outsource this to Smart Photonics, among others. We are also working with several other similar companies in the rest of the world, e.g. chip suppliers from Taiwan, America as well as Germany.” This is how Docter aims to find out which companies work best. “If multiple parties are doing well, we’ll move on to multiple parties. Of course, we don’t want to be dependent solely on a single party.”
Do not view your competitor as a competitor
According to Docter, this also applies to Effect Photonics’ clients. “There are several applications for photonics. Moreover, there is a growing market for this technology,” he explains. For example, work is being done on optical chips of this type in Asian countries such as China, Japan and Taiwan. “There are a number of companies that are involved with this. That’s competition for us, but we are not afraid of that.”
He sees it differently. “The market is large enough for multiple suppliers. In fact, if we were the only company to supply this technology, it is doubtful whether companies would be joining forces with us. They often don’t want to be dependent on a single product from one relatively small company.” Other companies can, in Docter’s view, contribute to the confidence that customers place in Effect Photonics. “The fact that other companies already have products on the market shows that we do not sell castles in the air. Already customers are as a result of this willing to work with us on products which will not be on the market for another five years.” Docter emphasizes that Effect Photonics always adds their own specific and innovative features to products. “We integrate additional features on a chip, making it even more efficient and affordable.”
As the CTO has stated, the fact that other companies are not in competition with Effect Photonics has to do with the fact that photonics is a complex technology, among other things. “The problems that we face are also encountered by others. A company that has resolved all of the problems and can put a product on the market will not emerge from just anywhere.”
Investment climate
There are comparatively few Dutch photonics companies, Docter states. Smart Photonics and Effect Photonics are the most well known. There are also a number of smaller photonics companies. This is due in part to the investment climate here. “We are not in Silicon Valley where start-ups very quickly raise a lot of money and thereby are able to set up a large team and a large company.” In his view, this means that the Dutch government gets to play a greater role. “This does not mean that Dutch companies are only allowed to cooperate with Dutch companies. Photography companies often have collaborations all over the world.”
The Photon Delta consortium is helping to further set up the ecosystem around photonics in the Netherlands. The Dutch government has allocated funds to support these activities as well. ” The government is trying to strengthen the Dutch position in photonics through incentives,” he explains. “We have a head start now, but the rest of the world isn’t standing still either.”
In some cases, state aid leads to a dichotomy. “On the one hand, the government wants to encourage international cooperation. On the other, they want to make sure that information and know-how doesn’t simply get leaked to other countries.” Doctor agrees with this. “We shouldn’t just be giving away our secrets, yet we can’t do it all by ourselves.”
Added value from combining photonics and electronics
Effect Photonics is also planning to make use of government funding. “This support is likely to increase the number of photonics companies. They may start to specialize more in the components of a complete product,” says Docter. As examples, he specifies chip design, testing of chips or their operation. “As the industry expands, you get more and more specialized companies that focus on a small part of the entire value chain.”
If at some point in time the market takes on such a form, the added value of Effect Photonics will, in its own words, lie in the application where all technologies come together. “We can make the optical chip work well with all of the electronics surrounding it. We have to consider the balance between performance and the costs of the chip for each customer.” For example, one customer may expect very high performance levels from the chip and then the chip is allowed to be more expensive. While another will go for a cheaper and more basic chip. This often depends on the application. “In order to make the right decisions in this area, we need to fully understand the technology behind the chip.”