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swanson, bret
Chorum's Chorus of Light BY BRET SWANSON Initial public offerings (IPOs) rocketed in 1999, and slumped in 2000. Twenty-five percent of last year's IPO filings were withdrawn; 225 firms have filed...
...My Gilder Technology Report colleagues and I think your best shot is to align yourself with the driving forces of the economic era...
...The author may hold positions in stocks discussed in this column...
...Those are the new offerings we'll feature in this space...
...The lead manager for Chorum's IPO is Credit Suisse First Boston, and the proposed stock symbol is CHOR...
...By focusing first on the number of wavelengths it can manipulate and only second on total bandwidth in a fiber, Chorum, like Avanex, multiplies individual communication paths far better than most of the optical industry...
...Chorum's optical components don't just transmit more total bits...
...So important are the crystal technologies to Chorum's products that it recently acquired liquid crystal display maker Polytronix...
...225 firms have filed to go public but have not yet done so, waiting for the market to break LIFT OFF CHORUM TECHNOLOGIES (WWW.CH0RUMTECH.COM) PROPOSED SYMBOL: CHOR their way...
...Founded by two Chinese American researchers at the University of Colorado, J.Y...
...Later this year we should see a 320-wavelength system...
...In addition to its better-known characteristics (wavelength, frequency and amplitude), light also has the property of polarization state...
...The offering could come at any time...
...It's connectivity that counts...
...As recently as 1995 a single fiber strand could carry just four colors of light...
...Light is comprised of electrical and magnetic fields that oscillate perpendicular to one another...
...Chorum and Avanex WDM products can carry as many as 176 colors of light on a fiber, tops in the industry...
...The Fremont, California, company makes photonic processors that combine myriad colors of light onto single fiber-optic strands...
...Liu and Kuang Yi Wu, and headed by former Lucent (LU) engineer Scott Grout, Chorum is competing with Avanex for the business of the largest optical systems companies in the world: Nortel (NT), Alcatel (ALA), Lucent, Fujitsu, Sycamore (SCMR), and Corvis (CORV), to name a few...
...These crystal-based switches use a million times less power than the also-new MEMS (micro-electromechanical systems) switches and contain no moving parts which means superior reliability...
...Avanex's claim to fame is that it can slice and combine and manipulate more colors, or wavelengths, than anyone else...
...In a market this tough, look at IPOs not for a quick pop, but for a sensible entree into a long-term, quality investment...
...The computer age is over—and the eras of bandwidth, storewidth, and connectivity have just begun...
...Last year Chorum added 600 employees, sextupling its workforce...
...IPO watchers will want to be on the lookout for Avanex's closest rival in this high-end WDM market, Chorum Technologies of Richardson, Texas...
...The practice is called wavelength division multiplexing, WDM for short, and is the most crucial technology in the new Internet economy...
...Polarization involves the alignment of those electrical and magnetic fields as they travel down fiber strands at slightly different speeds...
...In addition to its WDM products, which it dubs Optical Slicers, Chorum also makes optical switches that select and redirect individual wavelengths from one fiber to another...
...Spectator readers who use this information for investment decisions do so at their own risk...
...Chorum and Avanex have the most powerful and highest margin products in the realm...
...The switches do so without converting the optical light signals into the electronic domain for processing and routing, an exercise costly in both dollars and network performance...
...In the lab, each company can put thousands of wavelengths on a single fiber, making likely an even more rapid ascent for optics than the 35-year climb of silicon productivity under Moore's Law...
...It is this strategy that will remake the 21st century network architecture and serve the company well...
...The industry research firm RHK estimates today's $5 billion WDM market will grow to $24 billion by 2004...
...THE AMERICAN SPECTATOR ¦ April 2001 59...
...Having filed an S-l with the SEC on October 31 last year, Chorum is watching the market...
...Chorum and Avanex products achieve the same goals with different designs...
...In February, Jeff Stambovsky's "Opportunities" column focused on an emerging giant in optical networking, publicly traded Avanex (AVNX...
...People will not pay for abstract bandwidth...
...they will, however, pay for flexible broadband connections...
...Some of the older members of this group are struggling, but not even the dead weight of legacy telephone products or bad management can slow the overall market progress of WDM...
...They are crucial to the emergence of a dynamic, all-optical communications Web...
...Where Avanex uses a classical device to filter separate colors by frequency, Chorum uses liquid crystals (similar to those in your laptop display) and birefrin-gent crystals (don't ask) to filter colors by polarization state...
...Revenues for the December quarter were $6.1 million, all from Nortel, but the company has at least three other unannounced customers, and explosive potential...
Vol. 34 • April 2001 • No. 3
