IPG shines as it builds a better laser

OXFORD -- IPG Photonics Corp. is advancing a new laser technology that may do for industrial lasers what the semiconductor chip did for computers, making them smaller, cheaper, and more powerful.

Headquartered in this Central Massachusetts town, IPG has pioneered the development of fiber lasers, which use optical fibers to intensify the light that ultimately becomes a laser. In a decade, IPG has boosted the maximum power of its lasers from 20 watts, enough for soldering, to 50,000 watts, which can weld 1.5-inch steel. Costs have plunged from $4,000 a watt to $75.

As a result, IPG has emerged as the dominant player in the fastest-growing segment of the $2 billion industrial laser market. Fiber laser sales are projected to grow an average of 35 percent a year through 2010, compared to 9 percent for the overall industry, according to Strategies Unlimited, a Silicon Valley research firm. Fiber lasers' market share is also projected to grow, to 24 percent from the current 7 percent.

That's all good news for IPG Photonics, which last year accounted for about 70 percent of fiber laser sales, said Tom Hausken, an analyst at Strategies Unlimited. With revenues surging 59 percent last year, to nearly $100 million, IPG now ranks among the world's top 10 laser makers, Hausken said. By year's end, it could crack the top five.

''They have worked on this technology for years and years," Hausken said. ''And now they seem to be in the right place at the right time."

IPG is one of a long line of optics companies that have taken root and prospered in southern Worcester County, reaching back to the American Optical Co., an eyeglass maker founded in Southbridge in 1833. American Optical is gone, but the fiber-optic research it sponsored in the 1950s spawned several companies and an industry cluster that today employs about 1,000.

Among the early fiber-optics firms was Galileo Electro-Optics Corp., which in 1999 sold a telecommunications division to a German company, IPG Photonics. IPG moved its headquarters to Sturbridge the next year, then expanded to a new facility in Oxford in 2001. IPG is currently undergoing a new expansion to add more than 30,000 square feet to its Oxford campus. Since 2003, the company has more than tripled its Massachusetts workforce, to 270, and expects to add another 50 jobs this year.

IPG's technology emerged from a Russian lab in 1990, when Valentin Gapontsev, IPG's chief executive, developed a high-power fiber laser by coupling light-emitting semiconductors, known as diodes, with optical fiber. He founded IPG a year later in a Moscow basement, later moving the company's headquarters to Germany and finally to Massachusetts.

IPG's early success came by adapting its technology to telecommunications, where it is used to amplify signals moving through fiber-optic networks. By 2000, telecom accounted for about 86 percent of IPG's revenue, but the ensuing telecom crash forced the company to find new markets.

To expand into the industrial market, where lasers are used for welding, cutting, cleaning, marking, and drilling, IPG improved the efficiency of its diodes, optical fibers, and other components to offer a powerful, compact alternative to older technologies. Today, IPG makes lasers for everything from skin treatments to shipbuilding, with nearly two-thirds of its sales coming from industrial customers.

''We have made a quantum leap," Gapontsev said, ''and that has opened new opportunities."

Laser technology can trace its origins to Albert Einstein, who theorized in the early 20th century that light consisted of particles, and these particles could be stimulated to emit a powerful beam. Laser, in fact, is an acronym for light amplification by stimulated emission of radiation.

The first laser was built in 1960, with a variety of technologies developing over the years. All lasers share two basic features: a light source and a medium for stimulating the light into laser. In IPG's case, semiconductor diodes act as the light source, and optical fibers as the medium.

In many ways, IPG's lasers are superior to older industrial technologies that use gases, such as carbon dioxide, or crystals as the laser medium. These technologies rely on mirrors to intensify the light, which in turn requires a relatively large chamber.

IPG's technology essentially does all this within an optical fiber about the diameter of a human hair. This avoids some of the drawbacks of older technologies, such as the need to frequently adjust mirrors and other components, which must be perfectly aligned to produce a strong beam.

In addition, since fiber can be coiled, IPG's lasers are more compact. For example, high-powered carbon dioxide or crystal lasers are about size of a small car; similar IPG lasers are about the size of a refrigerator.

This combination of smaller size and fewer adjustable parts makes IPG lasers rugged and portable, allowing them to be taken into the field to, say, weld a pipeline.

IPG's technology, however, is not necessarily the best for all applications, Hausken said. For example, carbon dioxide lasers, which are much cheaper to buy, might make more sense for low-power engraving, while crystal lasers, which can produce the highest-powered pulses, could be better suited for drilling.

But overall, IPG has come up with ''very elegant design," Hausken said. ''If you had the diodes and fiber technology 40 years ago, you would have designed a fiber laser right off the bat."

Robert Gavin can be reached at rgavin@globe.com.