wave llc confidential and proprietary 1 1 wave optics investor presentation [email protected] 1

Wave LLC Confidential and Proprietary 11

Wave OpticsWave OpticsInvestor PresentationInvestor Presentation

[email protected]@waveoptics.com

1


Wave MissionWave Mission Take Lead in Opto-Electronic IntegrationTake Lead in Opto-Electronic Integration

§ System-driven O/E hybrid modules.System-driven O/E hybrid modules.§ High-speed 10-40 GB/sec optical networking. High-speed 10-40 GB/sec optical networking.

Quickly maximize market penetration and Quickly maximize market penetration and profitability profitability § Develop next-generation hybrid technology Develop next-generation hybrid technology nownow for for

10-40 GB/sec applications.10-40 GB/sec applications.§ High-value, high-margin products.High-value, high-margin products.

Novel Ultra-Dense WDM TechnologyNovel Ultra-Dense WDM Technology§ Exclusive licenses on Caltech patents.Exclusive licenses on Caltech patents.§ Potentially “disruptive” technology.Potentially “disruptive” technology.


Wave ManagementWave Management R. Logan, Ph.D. - President and FounderR. Logan, Ph.D. - President and Founder

§ Co-founder of JDS Uniphase Transmission System Co-founder of JDS Uniphase Transmission System Division (1995-2000).Division (1995-2000).

§ P/L Responsibility for Advanced Photonics Group at P/L Responsibility for Advanced Photonics Group at JDS Uniphase.JDS Uniphase.

§ Directed Engineering, Marketing/Sales, Manufacturing Directed Engineering, Marketing/Sales, Manufacturing for Advanced Photonics products.for Advanced Photonics products.

§ Noted authority in advanced microwave photonics, Noted authority in advanced microwave photonics, invited speaker at international forums, many invited speaker at international forums, many publications and patents.publications and patents.

§ JPL Member Technical Staff, developed novel JPL Member Technical Staff, developed novel microwave photonic antenna link (1988-1994).microwave photonic antenna link (1988-1994).


Wave ManagementWave Management N. W., Ph.D. - VP of EngineeringN. W., Ph.D. - VP of Engineering

§ Start-up experience at Beacon PowerStart-up experience at Beacon Power• Starting team through S-1 filing (~80 employees).Starting team through S-1 filing (~80 employees).• Invented pivotal enabling technology, transitioned to production Invented pivotal enabling technology, transitioned to production on on

time and in budgettime and in budget..• R&D Group Founder and Manager.R&D Group Founder and Manager.

§ OpticsOptics• Key founding member of Lafyatis experimental physics group at Key founding member of Lafyatis experimental physics group at

OSU. Published research in quantum optics.OSU. Published research in quantum optics.• BSEE Cornell Univ., emphasis in microwave engineering.BSEE Cornell Univ., emphasis in microwave engineering.• Advanced Systems Engineering at Varian Beverly microwave Advanced Systems Engineering at Varian Beverly microwave

Division. Division. • Developed innovative microwave photonic techniques for probing Developed innovative microwave photonic techniques for probing

high-power microwave tube devices (1987-1990).high-power microwave tube devices (1987-1990).


Motivation for Hybrid ApproachMotivation for Hybrid Approach

- Hybrid performance superior to monolithic integration or discretes- 40 GB/s electronics constrained by 50-ohm device packaging

- Past- Present- Future

O/E Hybrid Moduleutilizing best of breed components

LasersGaAs, InGaAsP,

VCSELs

Optical ModulatorsLithium Niobate, polymers,

EAMs, GaAs, InP

PhotodiodesPIN, APD

Optical PassivesWDMs, splitters, filters,

MEMS switches, Er-fiber

ElectronicsSi, GaAs, SiGe


Wave Hybrid SolutionWave Hybrid Solution

Existing Technology: present techniques are device-driven

Wave Hybrid: System-driven

laser modulatorsplice splitterpdhermeticfeedthrus

total of 8 or more

fiber loops

splice

splice

spliceopticalcon-

nector

printed circuit boardlaser power/temp, modulator bias, wavelength,

digital mux, modulator driver

laser modulator

Electrical Connectors

pd splitter

ASIC

pd

pd

Electrical Connectors hermeticfeedthrustotal of 2

MUX/Driver chips

Key EnablingTechnology and

Potential Stand-AloneProduct

Typicallylarge PCB

with discretecomponents


Hybrid Integration BenefitsHybrid Integration Benefits

Utilize best-of-breed devices in all material Utilize best-of-breed devices in all material systems to achieve state-of-the-art systems to achieve state-of-the-art performance (Si, GaAs, InP, LiNbO3, performance (Si, GaAs, InP, LiNbO3, polymers, Er-glass, MEMS switches, etc…)polymers, Er-glass, MEMS switches, etc…)

Eliminate cost of redundant hermetic Eliminate cost of redundant hermetic packaging of electronic and optical devices.packaging of electronic and optical devices.

Optimize electronic and optical interfaces.Optimize electronic and optical interfaces. Reduce cost and size, improve performance.Reduce cost and size, improve performance.


Caltech PatentsCaltech Patents

Industry consensus: Ultra-Dense WDM Industry consensus: Ultra-Dense WDM promises full utilization of fiber bandwidth. promises full utilization of fiber bandwidth.

New approach needed: development is New approach needed: development is limited by current laser & filter approaches.limited by current laser & filter approaches.

Ppatents provide basis for ultra-dense Ppatents provide basis for ultra-dense packing of Wavelengths.packing of Wavelengths.§ DARPA-funded Mode-Locked-Laser contractDARPA-funded Mode-Locked-Laser contract§ DARPA-funded Photonic Synthesizer contractDARPA-funded Photonic Synthesizer contract


Market SizeMarket Size

200k routers/switches per year200k routers/switches per year§ High end, metro, carrier basedHigh end, metro, carrier based

Average 1.5 optical ports perAverage 1.5 optical ports per§ 2.5G, 10G, 40G 2.5G, 10G, 40G

$10k per transceiver (2002)$10k per transceiver (2002) $3 billion transceiver market per year$3 billion transceiver market per year


Wave Potential CustomersWave Potential Customers

Optical Networking OEMsOptical Networking OEMs§ Nortel, Lucent Network Systems, ONI, Ciena, Nortel, Lucent Network Systems, ONI, Ciena,

Sycamore Networks, Centerpoint Broadband, etc.Sycamore Networks, Centerpoint Broadband, etc.

Internet Data Routing/Switching OEMsInternet Data Routing/Switching OEMs§ Cisco, Juniper Networks, Avici, etc.Cisco, Juniper Networks, Avici, etc.

Advanced Aerospace ApplicationsAdvanced Aerospace Applications§ Boeing, Lockheed-Martin, TRW, Hughes, etc.Boeing, Lockheed-Martin, TRW, Hughes, etc.


Wave MilestonesWave Milestones Organized as California LLC (June 2000)Organized as California LLC (June 2000) $500,000 line of credit from JP Morgan guaranteed $500,000 line of credit from JP Morgan guaranteed

by CEO (Sept 2000) by CEO (Sept 2000) $600,000 DARPA sub-contract for Mode-Locked $600,000 DARPA sub-contract for Mode-Locked

Laser (Sept 2000)Laser (Sept 2000) Open 5000 sq. ft. facility in Pasadena CA, personal Open 5000 sq. ft. facility in Pasadena CA, personal

guarantee by CEO (Sept 2000)guarantee by CEO (Sept 2000) $100,000 DARPA sub-contract for Photonic $100,000 DARPA sub-contract for Photonic

Synthesizer (expected Oct 2000) Synthesizer (expected Oct 2000) Private equity round (Oct 2000)Private equity round (Oct 2000) Discussions with commercial customersDiscussions with commercial customers


Technology RoadmapTechnology RoadmapQ4 2000 Q1 2001 Q2 2001 Q3 2001 Q4 2001 Q1 2002 Q2 2002 Q3 2002 Q4 2002

Woodard/Laing/Tech1

SrEng1/Tech1/Eng1(1/2)

Logan/SeidnerWoodard/Eng2

Woodard

& new hiresSrEng2/Eng1(1/2)

Logan ship MLL device

Logan

Financing $1M $5M - 10M $15M +/- $50M

Headcount:Tech/Sr. Mgmt 5 8 20 38

Admin 2 & CPA firm 5 9 23total: 7 13 29 61

Order/Set Up Lab Equipment

Computer Network

Financing

DARPA Mode-Locked Laser Development Contract

Phase 0 Product (ASIC-enabled TX)

Sys. Design ASIC design

Order parts 1st shipbreadboard

receive ASIC

build

Packaging Technology Development

Laser Welding

DARPA Photonic Synthesizer

Contract

Phase 1 Product (O/E Hybrid TX)

Ph 1 Qualification Testing

Phase 2 Product R&D

- Hybrid optical

interconnects- UDWDM

- NG Modulator


Projected RevenuesProjected RevenuesElectronic Opto-Electronic

ASIC-based Integration IntegrationItem Phase 0 Product Phase 1 Product Phase 2 Product

years 1 - 2 years 2 - 3 year 3 - 5Parts Cost 7500 6000 2450Labor Cost 250 250 75Total Cost of Goods Sold 7750 6250 2525

Average Sell Price 15000 12500 6000Gross Margin 7250 6250 3475Gross Margin % 0.48 0.50 0.58

Units sold 1000 3000 10000

Total Module Revenue $15,000,000 $37,500,000 $60,000,000Total gross margin $7,250,000 $18,750,000 $34,750,000

size 4"x5"x1" 3"x5"x0.7" 1"x4"x0.7"


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