Crestec, Japan Oct. 23, 2020

Driving the advancement of5G/6G internetMr. Hideyuki Ohyi
Crestec Corporation

Established in 1995, Crestec Corporation develops the Advanced Productive Electron
Beam Lithography (ELB) Systems used to manufacture DFB LDs (distributed feedback
semiconductor laser diodes) that are essential to the manufacture of the latest opticaldevices. In this interview, president, Hideyuki Ohyi, discusses some of the company’s
latest products, which allow for greater speed and efficiency, higher precision andperformance, and lower costs in the manufacturing of the latest DFB-LDs for 5G/6G,cloud services, medical sensing and LiDAR.

The SME sector is the most important sector in Japan as it provides more than
50% added value to the GDP, with SMEs making up 95% of the total companies inJapan. In accumulation, SMEs have the largest share of employment in Japan aswell. How can these SMEs compete worldwide and serve the best products to theinternational market?
The company itself was founded in 1995, and the following year we were able to provide
a solution to a niche-specific problem. It was a very short time, but we proved it waspossible. About 10 years ago, the optical communication industry underwent a majorchange. In order to keep up with this change, we are developed an Electron Beam
Lithography System (EBL) Model CABL-9000C for manufacturing Distributed Feedback
semiconductor Laser Diodes (DFB-LDs), which is a system that replaces an opticalholography system. Traditionally, a two-optical beam interference exposure machineusing holographic interferometry has been used to create diffraction gratings, but thisgrating machine can only create a couple of gratings. However, with our machine wewere able to write many gratings with different pitches on a single wafer.
In our case, we are providing new technologies (patented) such as "Field Size
Modulation Function (FSM)" which is one of the major attachments for our EBL. It
provides a position solution rather than a pattern solution with the tremendous fineposition resolution of 0.001 nanometer (1 picometer). Since the grating pitch is an
important part of the DFB-LD, the application itself is for ultra-precision gratings. At thattime, the position control of conventional electron beam writers was limited to an integer
multiple of the minimum unit of 2.5 nm. On the other hand, we succeeded in1

miniaturizing the position resolution of our machine using the FSM function by 1/2500 ofthe conventional model.
We usually collaborate with our customers to create solutions. For example, NEC has
manufactured a distributed feedback semiconductor laser grating that is often used in
optical communications. They required a minimum grating pitch difference of 0.0012 nm
for wavelength division multiplexing (WDM) light sources. This resolution became 0.008
nm when converted to the wavelength resolution when it became DFB-LD. Therefore,grating formation and pitch control through our EBL is a promising way to precisely
control the lasing wavelength of DFB-LDs. Simultaneous fabrication of DFB-LDs withdifferent wavelength has been demonstrated using our EBL, which is a promisingtechnology allowing WDM light source to be made at a reasonable manufacturing costs.
In the experiments, 40 DFB-LDs with different wavelengths were fabricated using ourEBL. Slightly different pitch gratings from 235.98 nm to 247.68 nm (40 channels) with
0.3 nm steps were formed on a wafer. The λ/4 shifted structure was used for the grating.
Finally, we accomplished the lasing spectra for all 40 channels of the DFB-LDs. As aresult, a very wide lasing wavelength range of 75 nm from 1518.2 nm to 1593.2 nm was
obtained. It is really difficult to reach such a special position resolution and to do thisreproducibly. However, we were able to resolve this problem in 2-3 months.

The semiconductor and communication industries are growing a lot. Do you think
this will affect your company to grow? Are you excited about the newdevelopment of this market?
Yes, definitely. For example, the CABL-9000C, which is one of our EBL products, isessential in the manufacture of DFB-LDs for optical communication devices. The opticalcommunication market grew by CAGR of 14% annually from 2015 to 2019. In the opticalactive device market, in particular, the “25Gbps DFB-LD market” is expected to achieve
CAGR of 30% or more from 2019 to 2025.
Over the five years from 2015 to 2020, global internet protocol traffic tripled and global
mobile bandwidth increased nine-fold. In addition, Internet video traffic has quadrupledin five years and cloud services have doubled in five years. You can see that growth isexpanding towards the future.
We believe that our EBL can be useful for the production of not only DFB-LDs but also
new multiple high value-added compound semiconductor devices used in theseindustries and contribute to the development of the industry. We are excited about thedevelopment of new markets that offer our new challenges.

How is 5G technology going to affect the industry?
5G requires Specified Base Stations and Altitude-Specified Base Stations fortransmission and reception, and the Altitude-Specified Base Stations are connected tothe cloud by high-capacity optical communication. Current 4G base stations can reachradio waves within a radius of 2 to 3 km, but 5G radio waves can only reach a cell areawith a radius of 100 meters, so more Specified Base Stations are needed in smallerareas. Therefore, due to the rapid growth of 5G, more DFB-LDs will be required. The
introduction of CABL-9000C is expected to increase, and it can be expected that thebusiness will grow into the future.
In addition, the introduction of 5G is expected to contribute to the creation of new
industries and the resolution of social issues through collaboration among various2

industries. In particular, we believe that our EBL can contribute to the creation of new
cutting-edge semiconductor devices used in smart cities, autonomous driving support,
telemedicine, AR/VR, etc. Now we are very excited.

What is your competitive advantage?
Our market share has reached 65% of the global market with the direct write EBL forproduction, because of our competitive advantage of minimizing the manufacturing costof DFB-LD devices and creating high-performance products with high-yield rate.
Thereby technology for manufacturing DFB-LDs is the FSM function that can control themultiple grating pitches accurately on the picometer order. With the stable hardware andsoftware that drives the FSM function, all of our customers were able to accurately
control the lasing wavelengths of the DFB-LDs by drawing and processing proper andaccurate pitch sizes.
The DFB laser diodes produced by our CABL-9000C can be used for batch writing ofmulti-period gratings, which is a very important technology for manufacturing opticaltransceivers for DWDM. Our product was able to manufacture 40 different channels ormore DFB-LDs at one time. All channels showed stable single-mode oscillations with aside mode suppression ratio (SMSR) of more than 35 dB.
There are a total of 25 existing CABL-9000C installation systems in Japan, the UnitedStates and China as the industrial application, and all machines are operating effectively.
Our customers are very happy with our machine and want to introduce us to newcustomers. For example, the University of California, Berkeley introduced the No. 1
optical communications component company who ended up purchasing five of ourproducts.
Recently, we have commercialized and started selling the CABL-AP machine as asuccessor to the CABL-9000C. The feature of this machine is that DFB-LD devices with
an element length of 1500 μm or more can be produced at high speed and with highaccuracy. This device is suitable as a light source for image sensors (LiDAR) in selfdriving cars and is expected to expand the market.

In the future, which markets show the best potential for growth for Crestec?
In this business, we have two major markets. One is academics, where our clients
include top universities such as the University of Cambridge and Tokyo University. The
other one is the industrial market. Hence, we can support customers from the scientificresearch sectors and industrial purpose sectors.
However, at present, we are expanding our sales channels by focusing on both theoptical communication components and compound semiconductor device fields. This
includes the companies that are developing massively on 5G or 6G components andsub-systems, and we are planning to take advantage of that.
In the future, we will aim for sustainable growth by balancing both the academic andindustrial sectors.

What is the importance of R&D in your company?

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R&D has played a major role in our company. Without R&D and innovation, our products
such as CABL-9000C and CABL-UH130 would not have existed. This product offers
various value-added features with the new concept that enables FSM function, highspeed drawing function and self-environment control. We are still promoting two “newcutting-edge system development projects” with a focus on market trends, and one will
be released as a new product in the near future.

What is your strategy to go abroad and penetrate your product in the international
market?
In the United States, we participate in various exhibitions to introduce our products. InMarch 2019, we exhibited at the Optical Networking and Communication Conference &Exhibition (OFC) held in San Diego. In May 2019, we exhibited at the International
Conference on Electron, Ion, and Photon Beam Technology and Nanofabrication(EIPBN) held in Minneapolis, USA. At this international conference, we made an oralpresentation under the title of "Fabrication of sub-10 nanometer half-pitch line and spacestructure by using electron beam lithography". In this way, we are taking a strategy toattract customers' interest and gain a deeper understanding of our development andtechnical capabilities by exhibiting at an adjoining exhibition at the same time.
In Europe, we have established two representative offices. The first is in UK and thesecond is in Spain. We also participated in the LASER World of Photonics held in
Munich, Germany in June 2019. These exhibitions are very important because they canconnect and extend our network to reach new customers. Last January, we also
received an order from the Moscow Institute in Russia and the private company inBelarus.
However, between all the countries, we see potential in China. It is because they have ahuge market and so far, we have installed some of our machines for both academic andindustrial customers in China. Therefore, we are going to keep the good relationship withthem and continuously responding to their demands.

What is your ambition for the next 10 years?
The impact of the coronavirus crisis on the global economy is enormous. However, theinformation and communication market is expected to recover in a V shape post corona,and we are working hard not to miss it. We anticipate rapid growth in the Data Center,IoT, 5G, 6G, AI and robotics markets.
Many high-performance compound semiconductor devices will be used in these markets.
We would like to develop the industrial EB lithography technology cultivated in DFB-LD
device production and aim for sustainable growth as a top player of multiple compound
semiconductor device manufacturing machines.
On the other hand, in order to strengthen our sales force, we established Quantum
World Inc. as a sister company of Crestec in 1 July, 2020 and started their business. Inaddition to promoting sales in the current target market, we have something planned for
project and sales regarding advanced manufacturing equipment that can contribute toinnovative next-generation technologies such as quantum computers, quantum
communications, and quantum sensors.

4By supporting the creation of a system that fuses cyber and physical spaces at a highlevel, we would like to contribute to the construction of a human-centered society thatbalances economic development and social problem resolution as Society 5.0.

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