Olympus’ partnership across the Pacific expands its MEMS borders

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June 30, 2003 — Experience can be an advantage when establishing yourself in a new market, and the Olympus Partnership Development Group (PDG), based in San Jose, Calif., is banking on its parent company’s 20 years worth of expertise in MEMS technology to be successful.

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It also doesn’t hurt to have a global brand presence and the deep resources of a multibillion-dollar company like 90-year-old Olympus Optical Co. Ltd., which is number one in both digital camera and endoscope sales.

The parent company’s participation in Japan’s 10-year Micromachine Project got Olympus involved in MEMS development at the early stage and helped build its technical strength in this area. Marketing expertise comes from Olympus’ membership in the Micro/Nanofabrication Technology Foundry Network System Concept Fact-Finding Committee, which consists of nine universities and 13 corporations.

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Two years ago Olympus decided to look outside of its doors for companies that could leverage its expertise. One result was PDG, which forms joint ventures with others in the United States and Europe as an investor, licenser, OEM supplier, and/or manufacturing partner. Through PDG, potential partners can gain access to the R&D, Digital Imaging, Medical, Life Science, Industrial, and Finance groups within Olympus.

“Although no two partnerships are alike, each partnership is mutually beneficial,” explained Lawrence Wang, vice president of PDG. “We brainstorm with each potential customer and come up with several ways to cooperate — the more the better to improve the success of the partner company.”

“With the recent consolidation in the MEMS industry,” Wang added, “it is difficult for companies to find long-term, stable partners. We believe PDG fills this gap.”

PDG relies on Olympus’ MEMS Foundry Services, which was launched in 2002. Services include design engineering, prototyping, and small lot production contracting services. Companies can also have access to precision equipment and test capabilities. The foundry, which is located in Nagano Prefecture, is already undergoing a three-year $25 million expansion, which will include new equipment for fabricating 4, 6 and 8 inch wafers.

“Our foundry has the advantage of being vertically integrated since we can provide both manufacturing and assembly,” Wang said. “This saves our customers both time and money. In addition, we have bulk micromachining capabilities, which are better in many applications than surface methods for achieving robustness.”

Since launching in 2001, Olympus already has 12 projects in the prototype stage, with products expected on the market within a year. A significant portion of partnerships relies on MEMS technology, including an inkjet printer head developed with Fuji Xerox Co. Ltd. In addition to developing customized products, PDG can supply off-the-shelf products including: 1-D and 2-D mirror devices used in optical cross connects and portable scanners; aspheric lenses for fiber optic communications; and MEMS chips for variable optical attenuators or small port count switches.

Customers will also be able to take advantage of other technologies. According to Peter Wang, optical product marketing manager, Olympus is not just an optical company. “We can also provide support in IC design and electronics for integrating our optical products into a customer’s complex system,” Wang said.

Despite these advantages, Marlene Bourne, a senior analyst at In-Stat/MDR, cautions that being part of a large company does not necessarily guarantee success.

“Other large companies have started MEMS divisions that were eventually sold off,” she said. “Only time will tell whether the market accepts PDG.”

Bourne also pointed out that there is still a lot of overcapacity in the MEMS industry, which she believes will lead to further consolidation. Whether this will help or hurt PDG remains to be seen.


Company file: Olympus Partnership Development Group
(last updated June 30, 2003)

Olympus Partnership Development Group (PDG)

Ticker symbol

180 Baytech Drive
San Jose, Calif. 95134-2302

PDG was formed in October 2001 as part of the Olympus Optical R&D division. Its 90-year-old parent company, Olympus Optical, is the world leader in endoscope and digital camera sales (the latter is an off-and-on race with Sony).

MEMS-based product development and manufacturing

Small tech-related products and services
PDG sets up alliances with other companies in order to develop and commercialize MEMS-related technologies. The company offers resources ranging from R&D, prototyping and manufacturing to marketing, distribution and financial investment. PDG has a newly expanded MEMS foundry, as well as expertise in MEMS-based manufacturing and packaging processes.


  • Lawrence Wang: vice president
  • Peter Wang: optical product marketing manager
  • Barriers to market
    Since PDG functions in industries beyond optical communications and networking, it has multiple potential revenue streams, but is still affected by the telecom slump and the aggressive pricing of competing firms. PDG will need to heavily target other markets before telecom rebounds.

    “In the short term we would like to continue increasing our capacity and capability as well as becoming well known in the market,” said Vice President Lawrence Wang. “In the next five years, we hope to reach $100 million in total sales.”

    Why they’re in small tech
    “Everything Olympus does utilizes small tech, such as the endoscopes we make, which are becoming less invasive,” Wang said. “Everything is getting smaller. And MEMS technology is one of the key technologies driving Olympus overall.” Peter Wang, optical product marketing manager, added, “Small tech can make the products more cost effective and makes a lot of applications achievable. Second, microtechnology can improve product performance and quality.”

    Selected competitors
    Besides competing with other optical heavyweights (Eastman Kodak, Canon, Sony), PDG competes with many firms offering design, development and foundry services. Several of these companies include:

  • Analog Devices
  • Colibrys
  • Honeywell MEMSPlus!
  • Contact

  • URL: www.olympus-ita.com/pdg
  • Phone: 408-514-3900
  • Fax: 408-946-3836
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    — Research by Gretchen McNeely


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