Toby Strite Manager of High Power Laser Marketing

1. Key Conference 200612 – 13 November 2006 Telecom-grade Diode Lasers for Industrial Laser Applications Toby Strite Manager of High Power Laser Marketing

2. Outline • Evolution of Industrial Diode Lasers • Telecom-grade and beyond • Diode/Fiber-based Industrial Lasers

3. Fiber-coupled Industrial Diode Laser Eras • Reliability (inception  2003) “$$$’s and *#&%^!!” • DPSS is considered technology of the future (“always has been, always will be…”) • Diode laser investment focused in telecom • Unreliable, low brightness bars are only choice • Telecom-grade (2003  ?) “$/Watt” • Telecom migrants disrupt brightness, drive $/Watt • Even low-end bars reliably deliver 10,000hrs • Reliability and $/Watts begin to de-couple

4. What is a Telecom-Grade Diode Laser? • Operational Excellence and Business Breadth • Large, fully-absorbed fab (ISO-9001 a decade ago, now TL-9000) • High-volume off-shore assembly • Technical and Cost Roadmaps, Extensive Track Record • Platforms, not just products • Predictable, sustained performance • Rigorous NPI, PCN and PDN processes • Reliability understanding surpasses the qualification report • … Confidence and Transparency for the Customer!

5. Telecom 980nm pump lasers since 1993… • 90mW 980nm pumps assembled in Boston sold for $7000 • Five chips, several packages, one transfer to China later… • 500mW 980nm pumps sell well below $1000 • 90mW 980nm pumps cost $300 • and 980nm pump vendors are (again) profitable • Over 13yrs, innovation and focused cost-reduction realized • 21% annual price reduction for 90mW part • 15% annual power increase for 980nm pumps • 26% annual $/mW price reduction to the market

6. The Story Moves to Fiber Laser Pumps 14% average annual power increase Annual 17.5% (red) power increases enabling 26% annual $/Watt erosion predicts a reliable 35W fiber-coupled diode will sell for $70 in 2016…!!

7. Third Industrial Diode Era - Efficiency • Diode Efficiency (2005  ?) “still $/Watt” • reliable power is limited by waste heat • For diodes to progress, efficiency must increase 32 Watts

8. Optimizing single-emitter efficiency Research funded by DARPA SHEDS program promises power conversion efficiency improvements in future fiber laser pumps

9. Diode Laser CY’06 TAMs • $3.5B diode laser market is 59% of total laser sales Industrial, Medical, Graphics and Other - $300M Telecom/Datacom - $1.2B Optical storage - $1.9B Source: Laser Focus World annual Laser Market Review (Feb’06)

10. Industrial Diode Market Segmentation High-quality, telecom-grade diodes enable wholesale shift of industrial laser industry to diode-based solutions Misc. Graphic Arts $32M Displacement of classic lasers by Direct Diode systems $300M Industrial Diode TAM Medical Diodes $75M Displacement of classic lamp-pumped SSL and gas lasers by DPSSL “Fiber Laser Market set to grow at a 35% CAGR through 2010” – Strategies Unlimited, Apr’06 Solid-State and Fiber Laser Pumps $160M Pumps

11. X Diodes and Fiber – Disrupting the Laser Industry • Fiber is a new paradigm • Fiber-based Laser SS/Gas Lasers • Modular, spliced Delicate alignments • Service free Disposables • High efficiency (25+%) Low efficiency (few to 10%) • High brightness Inferior brightness • Direct Diode systems are just another fiber laser • Solid-state (classic) lasers are adopting fiber

12. 50W Fiber-coupled Direct Diode System

13. Phoenix SSL platform Laser diode FBG PP crystal beam shaping/ light loop Not your typical diode-pumped solid-state laser: telecom style packages spliced fiber

14. Summary • Pump diode lasers are mature, reliable • Telecom-grade diodes soon to be ubiquitous in the industrial laser industry • Fiber lasers are merely the most important variety of fiber laser