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Molecular OptoElectronics receives investment from Intel

Molecular OptoElectronics Corp. (MOEC), a US-based fibre-optics company, is ready to explode out of the Rensselaer Polytechnic Institute incubator – and its new facility could say “Intel inside.”

Molecular OptoElectronics Corp. (MOEC), a US-based fibre-optics company, is ready to explode out of the Rensselaer Polytechnic Institute incubator – and its new facility could say “Intel inside.” The 6-year-old company has a fibre-optic product so interesting that Santa Clara, California-based Intel Corp. has made an undisclosed investment and – perhaps more important – has agreed to provide the company assistance in getting a new automated manufacturing plant off the ground before a competitor comes up with something better. If he could, MOEC founder Kevin R. (Randy) Stewart said he would have the plant operating to make the optical power amplifiers at the speed of light. “If I could make 10,000 (now), I could sell 10,000,” Stewart said. An initial public offering of stock is expected in the next year, too, as another way to fund the expansion. Stewart will not disclose specific plans about an IPO, but he revealed which direction the company is going to take. “We will be a major public company in a year or so,” he said. MOEC, which employs 30, expects to double its staff within the next three months, then to double that number, to 120 workers, by the end of the year. It will be looking for a new building to move into, though Stewart said he may have to site some operations out of the Capital Region due to labour shortage. Behind the sudden triumph of the quiet Watervliet-based company is a tiny glass case, covered in a larger metal casing, in which lie the components that amplify the optical power which moves data through a fibre-optic line. Every fibre-optic line being laid to support voice, fax and Internet service needs these amplifiers. The market for such optical components, now at about US$ 25 billion, is expected to grow to US$ 200 billion by 2015. While other companies, too, make fibre-optic amplifiers, MOEC has figured out how to produce them for US$ 3,500 to US$ 5,500 each, compared to the US$ 8,000 to US$ 10,000 they sell for now. The company also has a patent on its design. Intel executives believe their manufacturing capabilities will enable MOEC to reduce the price of the amplifiers, Stewart said. Intel is sinking money into the company through its investment arm, Intel Capital. The company made more than 250 investments last year, totaling over US$ 1 billion, said company spokesman Robert Manetta. Most of its investments were in the range of US$ 1 million to US$ 10 million, with the average investment being US$ 4 million. The California computer giant has not bought a controlling interest in MOEC, Stewart said. Intel not only is looking for solid returns on its investments but also for firms whose work will boost the market for its computer components. “This type of technology can help grow a certain portion of the Internet, and that“s why it“s important,” Manetta said. Intel executives became interested in MOEC in October, when the Watervliet company rolled out its new amplifier at a trade show. MOEC got another boost last month, when New York City-based investment banking firm Gruntal & Co. referred to it as one of two companies in the emerging optical power control field. MOEC has been making components for fibre optics for six years – something of a risk when Stewart left the GE Research & Development Center in Niskayuna to found the company. Its main product has been an attenuator, which decreases optical power. Fibre-optic lines require both attenuators and amplifiers to keep separate streams of information in balance and capable of being received by users. The company consistently earned six-figure profits as it developed patents for 24 fibre-optic products, with another 28 patents in the pipeline.

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