Ayar Labs Gets $2.5M to Go After Optical Chips for Data Centers

(Page 2 of 2)

for next year, which will help the company work with data centers and optical switch vendors, Wright-Gladstein says, and land some early customers.

The transceiver will contain a high-performance silicon chip that can send and receive data both optically and electrically, as well as a laser module that supplies light to the chip. It’s different from the team’s Nature demo, which showed optical communication between a microprocessor and memory system. The key to Ayar Labs’ planned product is that the manufacturing process uses standard chip-foundry techniques. (The company has used a facility in New York state.)

But it’s still super early days. Ayar Labs currently has 12 people, including PhD interns. And competition will be fierce. Giants such as Intel and IBM have had huge research efforts in the area, Wright-Gladstein acknowledges, as have some established private companies like Luxtera. There has also been consolidation in the sector, with Aurrion being acquired by Juniper Networks, and Lightwire getting snapped up by Cisco.

What’s more, Internet giants like Facebook, Google, and Amazon are taking hardware matters into their own hands as their data centers deal with exploding demand. It wouldn’t be much of a stretch to see them developing their own optical systems to improve bandwidth. Because of the increasing use of big-data analytics and machine learning, Wright-Gladstein says, enterprises “are just sending more and more data between servers in a data center.” She adds that optical equipment vendors and tech companies are “trying to get these key data centers as their customers.”

It all adds up to an immense opportunity for Ayar Labs and its competitors. Indeed, the field of “silicon photonics”—which brings the advantages of silicon chips to optical devices and networks—has made big strides in the past decade. And its commercial growth seems fastest in the data center market. An example is Acacia Communications, an optical networking company based in the Boston area—and the region’s only tech IPO of 2016. Acacia (NASDAQ: ACIA) uses silicon photonics to make faster and more efficient communication equipment for telecom and Web service providers, in particular to connect between data centers.

Bill Aulet, head of the Martin Trust Center for MIT Entrepreneurship, knows Ayar Labs from its early days, as he is involved with the Energy Ventures class and the Clean Energy Prize. “It is a company with extraordinary potential but some real challenges in the nature of the business, the chip business,” he says. “This is a capital-intensive, long-lead-time business. But they have a strong team and a breakthrough technology and understand that this will take a while.”

For Ayar Labs, the future will come down to hard work, adaptability, and attention to details. Its core enabling technology works, Wright-Gladstein says. “Now we are focused on demonstrating packaging and laser module manufacturing approaches that scale up in volume and down in cost.”

Ultimately, the company’s technology could also be applied in areas such as supercomputers, Lidar and sensing, and healthcare. “It’s a pretty basic innovation, so you can also do a lot of things with it,” she says. “We think data center applications is the way to start.” She adds that in the company’s early days, there was “a lot of debate” over which market to go after first.

Another interesting note: Wright-Gladstein’s original thinking on energy efficiency has taken a bit of a back seat, the way most startups shift from their initial motivations. Over the past year, she says, talking with optical equipment vendors and data center managers has made her team realize that reliability, not efficiency, should be the top priority for their product.

“Energy efficiency is important, but it’s a distant second,” she says. “That made us go back to the drawing board about how we’re building our first product.”

Single PageCurrently on Page: 1 2 previous page