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Is Lumenon's Share Price Set to Soar?

The Next Intel?



Investors in Lumenon Innovative Lightwave Technology Inc. http://lumenon.com --
a company aiming to be "the Intel of optical integrated circuits" -- are hoping to
see its share price shoot skyward in the next few weeks. They say
breakthroughs are imminent that could lead to Lumenon being the next optical
component vendor to see its market cap soar to many billions of dollars.

On the marketing front, Lumenon is planning to demonstrate rapid progress
toward developing a low-cost way of manufacturing optical integrated circuits at
the Optical Fiber Communication (OFC)conference
http://www.osa.org/mtg_conf/OFC/ in early March.

Specifically, it will show some DWDM (dense wave division multiplexing) chips
made with its "Phasic Hybrid Sol-Gel Glass" technology. In this process, silicon
substrate is coated with a polymer and then circuitry is imprinted on it by placing
it under a mask and blasting it with ultraviolet light.

The DWDM chips that Lumenon will be showing will enable equipment vendors to
pack a lot of wavelengths into a single fiber, because they support a spacing
between wavelengths of 50 Gigahertz (Ghz), according to Reginald Ross, the
company's vice president of corporate development.

Although that sort of wavelength spacing is state of the art for DWDM, Lumenon
is demonstrating the chips at OFC for another reason --to underscore how quickly
manufacturing facilities can be built when using its technology. The on-year-old
company is spending about $20 million building a plant that is expected to make
500 optical devices a day when it goes into production next year. In comparison,
semiconductor foundries have much higher capacity, but they take two or three
years to build and require an investment of $1-2 billion, according to Ross.
Moreover, semiconductor foundries need thousands of skilled workers, while
Lumenon's factory has 250, the majority of whom are semi-skilled.

Ross says Lumenon's production process also results in very short development
cycles. "It's a matter of days between getting a new design and having the silicon
product in our hands," he says.
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