The days of high-volume manufacture of low-cost, off-the-shelf optoelectronics components in the UK have all but disappeared as the emphasis has shifted to China. Commercial director of OMC William Heath explains how the market has changed.
When it comes to the mass manufacture of optoelectronics in the UK, "it's just gone. We all know that," says William Heath, whose matter-of-fact assessment of the situation seems to leave no room for manoeuvre. But, he reassures me, this doesn't imply there is nothing left for UK optoelectronic manufacturers. He's talking about the emergence of high-end specialists, typically those producing complex safety-critical components in low to medium volumes. "Products like this need to be well engineered and to fit exactly what the customer is trying to do."
Heath is the commercial director of OMC, a company he describes as being specifically about customer-specific optoelectronics. "Backlighting is a good example of this," he says, referring to an OMC line that goes down well with a growing category of client that now refuses to use standard displays. "They don't want their product to look like everyone else's these days."
There was a time at the end of the last century, he tells me, in the days when Sky TV was first rolled out across the UK, when OMC pumped out components by the million for such customers. But the game has changed. "Mass manufacture is done in the Far East now for reasons of cost. If anyone wants a million green LEDs they go to China. The UK can't compete at that level on commodity items."
Heath adds: "We've had to look at our manufacturing techniques in terms of how we can make products more efficiently, while responding to the fact that there is no longer the market for mass manufacture in the UK. The way our production works now is very different to how it was back then. We've had to look at supplying competitively into new markets where there is no requirement for mass manufacture."
But this is by no means bad news for Heath, who maintains that the best way to handle changes in market behaviour is to adapt. He feels Britain has always been strong in applications that are not straightforward, where solutions require innovation. "Engineering UK PLC has a lot of home-grown know-how. We know how to make things work from day one and keep them working."
He thinks specifically of a fibre-optic transmitter-receiver system that OMC makes for use in data links in applications such as high-voltage switchgear. "We're talking about a situation where simply buying the LED and mounting it into a housing just doesn't deliver the results. If the system is only slightly out of alignment that makes it difficult for the customer down the line. It might work well at first. But 10, 20 years later, when the receivers have degraded and the fibre is a bit less sensitive, how do you know that every single one of these links in the system is still performing to specification? In power stations these things might need to work for decades."
To create sustained reliability, OMC devised 'active alignment': "We have operators who find the sweet spot before fixing the device in place within the housing. We're not relying on mechanical tolerances to get the system right. You can't do this in a mass volume automatic assembly context."
Another challenge in recent times, reflects Heath, is the increase in demand from customers limited to 5V applications. "At first we were wondering why everyone was suddenly limited to 5V." He quickly realised that the answer was because his clients were designing devices to run off USB power sources.
"We were able to overcome that by making emitters that have the chips in parallel instead of series, allowing customers the brightness that they were accustomed to, but from half the voltage. We've had to look closely at emerging trends, and adapt what we do to meet requirements like this."
From components to systems
William Heath's father, Stuart, founded the company in 1984 in Reading. He started off modestly, importing drums of fibre-optic cable and cutting it down to specific lengths.
"He was essentially a value-added distributor," says William Heath, "but as the company started to receive larger orders, we decided that the company needed a factory and, to cut a long story short, relocated the business to Cornwall."
According to Heath, "niche fibre-optics was what we were about then and we still are. We're not into producing major transatlantic telecoms links. We're more about local data communications systems for industrial applications where a system is designed to be installed and left running for 25-plus years".
The problem with this type of fibre-optic business, says Heath, is that it is vulnerable to market fluctuations. One minute you're selling to people who might be building power stations or train systems, and the demand for fibre optic links will be pressing. But then, as the client progresses to building the rest of the project, "things can go very quiet".
It was this unpredictability of workflow that led to the expansion of OMC. This was in the late 1980s, when Heath senior began to explore LEDs as a complementary technology. "We already had a lot of experience in this field. And so we went looking for areas where there was clearly a demand for a particular type of product, usually as a result of the lack of flexibility in mass production."
This observation led to the creation of a new opportunity for OMC in the field of supplying a range of LED backlights primarily for illuminating liquid-crystal displays. Heath recalls that "at the time, backlights were produced by weaving a fibre-optic mat, scuffing the face and shining a light from one side. This was a complicated and expensive process that didn't produce great effects. But we developed a manufacturing technique that allowed us to produce backlights in pretty much any shape, size or quantity. So rather than injection-moulding the light-guide – which is a tremendously good method if you want to produce 50,000 units – we CNC-profiled the light-guide which meant that we could efficiently produce medium size quantities of bespoke components".
Heath says that "this is pretty much the history of OMC – finding our way around a problem". He says that changes in technology have brought about opportunities for anyone in optoelectronics, but quite often the problem for the manufacturer "isn't technical in the sense of 'how do we get the light to spread from here to here'. More often, it's a question of how to manufacture the solution cost-effectively. That really is how backlighting became the second major element of what we did. And we looked at the spin-offs of this too, examples of which are LED emitters and indicators".
By 2003 OMC had broadened its involvement in this area to include white LEDs. "That was when we started to offer lighting products. In 2004 we built our first replacement strip light."
This further branching out of the company portfolio was the result of creating a specific solution for a military customer requiring internal lighting for an armoured ambulance that could work better than the existing low-voltage fluorescent technology. "At the time LEDs were nowhere near as efficient as they are now and they were much more expensive. But our application was for use in war zones, where fluorescents needed to be turned off every time the vehicle doors were opened to prevent it from becoming a target."
The problem was that once the door was closed the fluorescents had to start up from cold, creating a delay for the personnel within an unilluminated vehicle. If there were wounded personnel in need of medical treatment the lost time could be a matter of life and death.
LEDs solved that problem in that they "come up virtually instantly and can be driven by the vehicle's 12V battery. And so while this product was quite unappealing for mainstream applications because of its cost, it did have applications".
Heath tells me that he installed one of these lamps in an OMC laboratory nine years ago, since when it has shone 24/7 and is still going strong.
Specialist role for the UK
Despite the bulk of mass production taking place in the BRIC economies, Heath is adamant that Britain "remains innovative" in optoelectronics. He says there is still a huge amount of intellectual property being generated in the UK. "But what tends to happen is that, while the intellectual property (IP) is generated over here, the research is done over here, the prototyping is done over here, the actual manufacturing will take place elsewhere. We try not to limit our IP to product design, but broaden it to include our manufacturing process."
Heath says that it is also important to examine how the customer base is structured. "It's about filling the gaps sustainably. We try to place our research and development resources to fill the requirements of existing as well as new markets and that certainly tends to help in times of recession. Although we haven't seen a huge blip in our business, we have seen differences in market behaviour that have posed some challenges. We got used to annual schedules from a client. But a couple of years ago almost everyone stopped committing to long-term spends virtually overnight."
These gaps occur not because there is a lack of knowledge in the marketplace. "It's more a case that the logistics of manufacturing that product competitively are challenging and required a lot of work. Most of the components we produce tend to end up in safety-critical systems, where if a product fails there are consequences that can be very undesirable: a train's brakes failing, a power station failing to provide power, or a fighter jet navigation system going wrong.
"To be involved in that kind of application has given us an ethos of designing products to a very high level in terms of how heavily engineered they are."