Corrections or additions?

This article by Michele Alperin was prepared for the May 9, 2001

edition of U.S. 1

Newspaper. All rights reserved.

Meeting Bandwith’s Boom: Vladimir Ban

Having conquered the broad expanses of continent and

ocean, fiber optics cable is inching its way closer and closer to

our homes. Even 10 years ago, both home and office communications

relied primarily on telephones, answering machines, the U.S. Postal

Service, and UPS or Federal Express. Today consumers and businesses

alike routinely use E-mail, faxes, and the Internet to communicate

data, video, multimedia, and voice. The capacity and speed demanded

by these enormous information streams require the larger bandwidth

available in fiber optic networks.

Over the last five to six years, says Vladimir Ban, president of PD-LD

Inc. (Photo Diode-Laser Diode), the fiber optics industry has

experienced

steep growth, "with a few hiccups," fueled by vastly

increasing

Internet use. "It used to be that voice was the major user, but

more and more, it’s data communications," he explains. His

24-person

firm recently expanded from Research Park to the former AT&T site

in Hopewell, where it built 13,000 square feet next to the site’s

owner, Kooltronic.

Morton Collins, chairman of PD-LD’s board, says he realized years

ago that the search for increased bandwidth was going to be the

driving

force in the telecommunications industry. His venture capital company,

Data Science Ventures (DSV) Partners, had funded the startup that

became Times Fiber Communications, now a publicly traded company in

Connecticut. "I was interested in fiber optics 20 years before

anyone else had heard of it," says Collins. "I could see we’d

need much more bandwidth." According to the then-current

assumptions

of physics, the highest possible bandwidth was 9,600 bits per second.

"It was obvious that something dramatic had to change,"

Collins

observes.

Collins places the knee of the fiber optics growth curve at about

three years ago. Now this growth is creating important niches for

companies like PD-LD, which packages fiber optic devices. However,

PD-LD’s success is due not only to the strong demand for fiber optics,

but also to an unusual partnership between Ban, Collins, and Stephen

Forrest, chairman of the electrical engineering department at

Princeton

University. PD-LD’s forward momentum is fueled by a synergy between

these three men: the business and financial acumen of Collins; the

specialized fiber optics knowledge and research capabilities of

Forrest;

and the entrepreneurial instincts, management skills, and

technological

expertise of Ban.

Much of PD-LD’s product development has been the fruit of

long-standing

joint research interactions between Ban and Forrest and their

respective

organizations. Perhaps symbolic of their mutuality is the fact that,

early on, Ban moved one of his scientists to work on site in Forrest’s

lab, and he is still there today. Their earlier cooperation covered

various government contracts, and later moved into developing products

for production at PD-LD.

More recently, Ban and Forrest have been working together on passive

optical devices that route light of different wavelengths. In this

area, maintains Forrest, "commercial applications are abundant,

and we have gotten tons of money."

Another joint project, though it did not yield product for PD-LD,

eventually brought in venture capital and licensing fees. This

divergent

project, which involved the growth of organic materials, says Forrest,

"took on a life of its own and brought a significant amount of

venture money into the company." (It was eventually licensed to

a third company, Universal Display Corporation on Phillips Boulevard,

now a public company that trades as PANL.)

Forrest sees his lab as important to Ban, because it "can perfect

or test ideas rather quickly and inexpensively. If they work out,

they can go into production."

And what does Forrest get out of the connection? Both he and his

students

"get intellectual problems and research funding that pays the

research bills," he says, including subcontracts from the United

States government and money directly from PD-LD.

Forrest earned a bachelor’s in physics from the University of

California

at Berkeley in 1972 and has a PhD in physics from the University of

Michigan. He worked for Bell Labs at the University of Southern

California.

Moving to Princeton in 1992, he directed the Advanced Technology

Center

for Photonics and Optoelectronic Materials before heading the

department

of electrical engineering.

PD-LD’s bread and butter business has been the packaging

of laser diodes and LEDs (light emitting diodes). Its premier

products,

coupled lasers, use an existing technology that PD-LD has made more

efficient. This technology is used to connect optical fibers to laser

transmitters and detectors. When they convert electrical signals into

laser light, they must target the core of the optical fiber —

a diameter one tenth that of a human hair.

"It is difficult to aim a laser into such an extremely small

area,"

explains Ban, because the technology requires extremely tight

mechanical

tolerances and must satisfy stringent telecommunications requirements.

"Even the smallest movement of fiber, say a micron or less, and

the light will not be injected into the optical fiber."

PD-LD has been growing rapidly. With 60 employees today, as compared

to only 15 at the end of 1996, PD-LD has experienced sales growth

of 200 to 300 per cent each year over the last few years. This growth

was made possible by increased production under Uri Abrams and a

strengthened

sales effort under Tom DeBerardine. In 1999 and 2000 PD-LD made the

Deloitte & Touche list of the 50 fastest growing companies in New

Jersey and was also among the top 500 fastest growing companies in

the United States.

Ban attributes this rapid expansion to strong products, an effective

organization of production, and a rather high demand from customers,

which include small companies that purchase components for their

sub-assemblies,

all the way "up the food chain" to companies like Nortel and

JDS Uniphase, which build huge networks.

As financial maven, Collins cautions that PD-LD is "growing about

as fast as it can grow." Shipments are increasing dramatically

each month, due partly to the enlarged facility. He warns that

"one

can only grow a company so fast," and says he will make sure it

grows no faster. "You can’t take orders, if you can’t fill

them,"

he maintains, although so far PD-LD has had no problems in this area.

He also counsels against getting into new product areas too soon.

On the other hand, PD-LD is apparently not being affected by the

slowdown

in the communications business. "We’re in the part that’s growing

the fastest," says Collins. "The demand for bandwidth is

insatiable

at this point in time."

When asked what effect the recent layoffs at JDS Uniphase might have

on the fiber optics industry, Ban responds, "It is possible that

we are going through a briefly contracting phase. However, the demand

for fiber optics networks is far from being satisfied." And, he

adds, "After all, half of the population of this planet has never

yet made a phone call."

Collins has worked closely with Ban since DSV Partners invested in

Epitaxx, a fiber optics company that Ban co-founded in 1983 with Greg

Olsen. (Epitaxx is now owned by JDS Uniphase, and Olsen has moved

on to found Sensors Unlimited.) In 1996, Ban asked Collins to join

him in building PD-LD. He did and became PD-LD’s chairman of the

board.

Collins saw little risk in getting involved with PD-LD. Ban had

already

participated in building one company successfully: "He had managed

the company, provided technical inputs, and hired top technical

people."

An engineer by training, Collins went to the University of Delaware

(Class of 1958) and has his Ph.D. from Princeton University. He was

the founder and CEO of Scientific Research of Princeton and of DSV,

whose several incarnations have provided venture capital and

management

assistance to early-stage high-technology companies. Today he serves

as director of a number of companies and is also an active pilot,

avid skier, scuba diver, and underwater photographer. The father of

four children, he lives in Princeton.

Once Collins became the chair of PD-LD, he and Ban together

"decided

what we wanted to be when we grew up." The answer was that they

would build a company that was very profitable and had good cash flow

— based on things they already knew how to do. Then they would

"strike at a high point on the technological curve," beyond

where people are now.

That new product is now in PD-LD’s laboratory, being developed by

a group assembled by staff member Boris Volodin. "We are

developing

novel products, based on photosensitive glass, for fiber optic

applications,"

says Ban, "which should have significant advantages over

presently-used

products." These wavelength routers will enable the dropping and

adding of wavelengths in DWDM (dense wavelength division multiplexing)

systems, which provide the greatest bandwidth capacity and hence are

used almost exclusively in long-distance networks. (DWDM transmits

data from different sources, with different protocols, together to

an optical fiber; each discrete signal is carried on its own separate

light wavelength.) The new product will be important, explains Ban,

"because it is technically difficult to resolve various

wavelengths

and channels."

"Because DWDM uses many closely-spaced wavelengths, each carrying

a separate signal," Ban explains, "the trick is to separate

and combine those wavelengths efficiently, without disturbing the

adjacent wavelength." As a vastly simplified example, imagine

a hypothetical optical fiber, starting in New York and ending in San

Francisco. That fiber carries several wave lengths, one of which must

transport a signal only part of the distance — to Cleveland. The

Cleveland signal and its associated wavelength will have to drop out

of the wavelength stream that is on its way to San Francisco. In

addition,

any traffic generated in Cleveland must come back into fiber. The

wavelength router will drop and add the Cleveland wavelength without

affecting the others.

Ban expects PD-LD’s module to be "more sensitive, more selective,

simpler in construction, and presumably cheaper" than currently

available devices. "True growth will come with photosensitive

glass," he says, "because in that area we will be in the

technological

forefront, rather than one of several companies that use coupling

technology."

Collins goes further. He claims that the new products "are

enabling

technologies, which, if successful, will change the nature of

networks."

Forrest affirms both assessments. If the wavelength routers are

successful,

he says, "they will have a profound impact on the business of

PD-LD," which will grow significantly "over its currently

healthy state." In addition, if the project is successful, "it

will generate tremendously good science for work at Princeton as well

as a whole range of products."

Collins foresees only three potential obstacles that might affect

PD-LD’s success. Although the wavelength router appears to be working

in the laboratory, it remains an open question whether it can be

refined

into a manufacturable product. For PD-LD’s existing products, an

ever-present

danger is competition — other companies that make a comparable

product for less money. As a finance person, Collins also worries

about the possibility of needing financing when no external capital

is available. But, he observes, "the world is awash in

capital."

And so is PD-LD for the moment. Collins says, "We are very

profitable,

and right now we are in great shape for the foreseeable future."

Vladimir Ban (pronounced bahn) hails from Zagreb, Croatia, where his

parents still live, and his father is a professor emeritus of

bioengineering.

In 1964, after graduating with a degree in chemical engineering from

the University of Zagreb, Ban finagled his way out of the country,

as a graduate assistant at Penn State University. "In those

days,"

he remembers, "there was strict communism, and it was a rare

occasion

that they would let someone out." The move allowed Ban to take

advantage of the higher-quality technical education available in the

United States. He earned his PhD in material (solid state) science

from Penn State.

Ban is married to Connie Sayen, a child advocate who teaches at the

Crossroads Nursery School at the Institute for Advanced Study. Her

late father James C. Sayen, son of the Trenton industrialist, was

an environmentalist who was instrumental in creating the

Delaware-Raritan

Canal State Park and many of the county and township parks. The Bans

have two daughters: Sophie, a senior at Princeton High School, and

Sasha, a sophomore at Barnard.

At Sarnoff, Ban worked on semiconductor growth techniques for 15

years.

At Epitaxx, Ban learned "to be an entrepreneur and to do well

under relatively modest circumstances and resources." Epitaxx

was sold to Nippon Plate Glass in 1990 for $12 million. When asked

why they sold the company, Ban explains that their initial investment

had quintupled. "That was before the days of insane valuations

of fiber optic companies."

At PD-LD, Ban has focused on the importance of building a good team.

"You have to respect others and understand that you are only one

part of the engine," says Ban. "Even if you are the steering

wheel, the car doesn’t go without the other wheels." Collins

labels

Ban a great delegator. "To be successful and build a large

company,

you have to hire very good people and delegate responsibility and

authority to them," Collins explains. He points out that most

executives who fail do so because they delegate responsibility, but

not authority. But, he continues, "there’s a fine line between

delegation and abdication. My job is to keep Vladimir on that

line."

Describing his relationship with Ban, Collins says they are both

technical

people who share mutual respect. "There is no substitute for a

long relationship and seeing the world in pretty much same way,"

says Collins.

Ban has the more detailed technical experience, whereas Collins has

worked with many different companies — all high technology.

"It’s

a cooperative effort," explains Collins. "I handle the board

and help Vladimir with financial considerations. And with the building

of infrastructure."

Collins was also instrumental in attracting additional investment

last autumn from the investment-banking firm of Unterberg Tobin. This

infusion of funds enabled PD-LD to move into its new facility on March

1. The new space is 13,000 square feet, more than three times as large

as the previous facility, and it will support PD-LD’s larger staff

as well as its upgraded equipment. The Hopewell facility also boasts

two clean rooms, which use filtered air and have an extremely low

dust and contaminant content. These are necessary for making

semiconductor

devices, with circuits so small that a piece of dust would destroy

them.

Princeton, says Ban, has always had a strong background in photonics,

lasers, detectors, and fiber optics, with much of the development

in these fields occurring at Sarnoff, Bell Labs, and Princeton and

Rutgers universities. The fact that the Princeton area is viewed as

a major cultural center, within driving distance of Philadelphia and

New York, makes "it is easy to attract well-educated people,"

says Ban.

Musing on what may have contributed to his career development, Ban

comments, "By chance I came across something on the Internet on

the order of birth. I am a first born, and these guys have a tendency

of thinking they have to do something special in life. I have some

of that in me."

— Michele Alperin

PD-LD Inc. (Photo Diode-Laser Diode), 30

Pennington-Hopewell Road, Hopewell 08525. Vladimir Ban, president.

609-564-7900; fax, 609-564-7900. Home page: www.pd-ld.com.


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