Ganesh Gopalakrishnan, Codeon's founder, president and chief technology officer, likens the optical-networking industry to a food chain dominated at the top by companies such as Lucent, Siemens and Alcatel and supported by myriad equipment and component suppliers. We belong one step below on the food chain. We sell optical components to the manufacturers of those systems. The hardware that Codeon makes is called an optical modulator. An optical modulator acts like the shutter of a camera, opening and closing to allow light to pass through to form the pulses that carry information.
Faster shutters are able to transmit larger amounts of data.
Codeon has developed modulators that operate at 10 billion and 40 billion bits per second, more than 350,000 times faster than the high-speed digital subscriber lines, or DSL, connections installed in homes and businesses. The new investment will be used to expand Codeon's manufacturing capacity, doubling the number of employees to 200 as it prepares to begin delivering production models of its modulators, Codeon chief executive Robert Harvey said. We start shipping salable units this month. Harvey is not sure whether Codeon will need more venture financing. If it does need a cash infusion before its revenue becomes sufficient to fund its growth, one possibility is to merge with or be acquired by another company as the optical-components market matures and begins to consolidate, Harvey said.