Trends, Demand and Development in Optical Fiber Industry
To clarify the situation in fiber industry, we addressed our questions to the specialists of Rosendahl Nextrom. Experts are familiar with Nextrom’s technology and equipment for the production of optical fiber. We interviewed Managing and Technical Director of the Business Unit Nextrom, Knill Group of Companies Timo Id and Product Manager of equipment for the production of specialty optical fiber Kevin Boll. Nextrom is a world leader in fiber solutions. Timo has been working in the company for about 30 years and has a great experience in optical fiber industry. Kevin Boll has graduated from Michigan Technological University in 2003 with a degree in Mechanical Engineering. Started at Nextrom in 2006 as a mechanical engineer specializing on draw tower design and became product manager for the specialty fiber draw tower in 2011 and sales manager for all specialty fiber draw products in 2015. Currently product manager for all specialty fiber products.
Mr. Id: There is some uncertainty in the telecom optical fiber market at the moment. After years of rapid growth and expansion, growth has leveled off. There is some uncertainty for future years which will depend greatly on fiber deployment for 5G networks, for DC, FTTH expansion and long distance network development.
Fiber supply capacity now exceeds global demand, but preform capacity not all available for every draw plant. Mismatch of demand between local / vs imports, fiber supplier and cablers relation, fiber draw and preform technology, still requires capacity to be well over sum of all demands.
Mr. Boll: The specialty optical fiber market continues strong growth led by advances in fiber lasers and optical fiber sensors
Do you expect the new technologies to enter the market?
Mr. Id: From the telecom side, there is a constant push to reduce attenuation and increase the data rate through fibers. Future developments will likely require new fiber types and technologies, but what will dominate the market in future years is still unclear
Mr. Boll: In specialty optics, there are continualy new technologies and applications entering the market such as new laser technologies and new types of sensors.
Does the company produce such products as structured and gas filled core fibers?
Mr. Id: Rosendahl Nextrom is a producer of equipment which allows our customers to make optical fibers and cables and Nextrom has many customers which are currently making these types of fibers.
Wireless communication – Is this technology a threat to the FO industry?
Mr. Id: Not really, wireless is limited in distance and currently wireless transmitters and receivers are connected to the network with optical fibers. Due to environmental, physical, and EM interference, wireless communication cannot really meet the bandwidth requirements over long distances as optical fibers can.
How long does it take to develop a new product?
Mr. Id: It greatly depends on the product and the complexity. Some can be very difficult and take 5–10 years in order to develop a new product and release it into the commercial market.
What is the product life time – for example, for the Draw Tower?
Mr. Id: Many of the Nextrom draw towers are still in production after 20+ years. Nextrom continually supports our customers with our service department to ensure that our customers can keep their machines working and can keep the equipment up to date as components become obsolete.
As the industry develops, the competition increases, new firms can no longer enter this market, prices are falling down and standards are being set. Is it easy to enter the optical fiber market? Who has set the barriers?
Mr. Id: Again there is a disparity between entering the telecom or specialty fiber market. The current telecom market is very competitive requiring a new firm to make a large investment to capitalize on the economics of scale while at the same time they must be very efficient with high output and yields. The specialty market is still quite diverse so there are still many different areas where newcomers can find their niche. But as the market develops more and more, these will also become more difficult.
What distinguishes the company’s products from competitors’ products, what are the advantages?
Mr. Id: Nextrom is the largest supplier of optical fiber production equipment and we are the only supplier to supply the entire product range from preform manufacturing, to fiber draw, post draw, and cabling. This allows us to be a turnkey supplier. In addition our size allows for local service and support in many places around the world. Nextrom equipment is known for quality and reliability and allow our customers to perform R&D or full scale production with long term reliability and support.
Mr. Boll: We are expanding and improving our research center. It is planned that the renovated center will start its work in 2019. Having our own equipment to test and improve the process is a huge advantage for us and our customers. Our expertise allows us to provide remote support to the customer using its production parameters on our equipment, which meets the needs of all parties involved, especially during the commissioning of the equipment at the Customer’s site.
How have the customer needs changed over the past ten years?
Mr. Id: As market volumes have increased, customers have focused on reducing operating costs and increasing yield. This means larger scale preform production, faster drawing speeds with larger preforms, and more automation and online product verification.
How often do the same customers buy the company’s products?
Mr. Id: At Nextrom we put a strong focus on long term customer relationships. This means that we have many repeat customers, some of which have been buying Nextrom equipment exclusively for over 20 years.
Does the development of the medical field (for example, brain mapping) change your equipment?
Mr. Id: Our specialty fiber products are used to make many types of optical fiber sensors. Nextrom works with our customers to customize their production equipment to meet their specific optical fiber needs.
Mr. Boll: Optical fiber production is influenced by the reduction of global natural gas reserves, such as helium and its increased use in industry. Helium is used in cooling systems to improve the transfer of heat from the surface of the optical fiber to the cooling system. The use of helium-based cooling processes has been growing rapidly in recent years. This is reflected in the price of helium. In 2000, the price of premium helium was $2.80 / m3 where its price in today’s market is more than $20 / m3. This rise in the cost of helium has an impact on the cost of fiber production, as helium consumption increases in line with production speed. There is no escaping the fact that growing helium prices induce growing costs for the fiber manufacturing market which can typically be in the range of $0.05 to $0.10 per kilometer of fiber.
Now, Nextrom has developed a system for fiber draw, where the helium gas released from the cooling system can be collected and cleaned for re-use in the very same fiber cooling system. Helium Recovery System has been welcomed with open arms since its launch and in a short period time acquired a strong foothold in the market with over 70 machines sold and it´s considered now as an industry standard among the biggest fiber producers in the world.
The system can provide a recycled helium recovery rate in excess of 90% to even 97%. These results indicate why it´s been so popular among our customer´s. Return on investment depends on nominal helium consumption and the price of helium, but for a typical tower with the line speed 1800 m / min, payback time of the recovery unit is approximately 1 year.
Incorporation of the two companies – what purposes was this strategic alliance made for? Are these goals achieved?
Mr. Id: The merger of Rosendahl and Nextrom allowed us to capitalize on each other’s strengths as well as reduce product costs resulting in savings for our customers. In the overlapping equipment such as Optical Fiber Cable Production Machinery, customers are able to combine equipment from either company to created a tailored line to meet their needs. In other product areas we have leveraged our larger scale to achieve lower equipment and component pricing from our vendors which has resulted in reduced prices for our customers.
Editorial board specially thanks Rosendahl Nextrom Russian office for support in arranging the interview