`Photonics corridor' a dream unrealized

Delay: Bookham Technology's failure in Columbia postpones Howard County's hoped-for reputation as a magnet for photonics companies.

July 06, 2002|By Stacey Hirsh | Stacey Hirsh,SUN STAFF

When Bookham Technology PLC came to Howard County last year, it carried with it big promises: about 1,000 new jobs, an extensive manufacturing operation and a validation of the region's attractiveness for photonics companies.

Bookham announced this week that it will be closing down its Maryland operations in September and the 45 workers there will be laid off.

"We would have to be disappointed that the potential that Bookham promised ... was not fully [realized]," said Richard W. Story, chief executive officer of the Howard County Economic Development Authority.

Bookham, based in Oxfordshire, England, isn't Columbia's first loss in the telecommunications industry's downward spiral.

Corvis Corp., the fiber-optic equipment maker, has cut its staff to about 723 from 1,625 a year ago. Trellis Photonics Ltd., an Israeli startup that moved its headquarters to Columbia, never hired more than 14 employees and closed its U.S. operations last summer.

As the fiber-optic companies of Howard County dwindle, so do its chances of becoming the "photonics corridor" of the region.

"This was one of the things that has differentiated the county, so the hard time this industry has faced has fallen harder on Howard County than other areas," said Richard Clinch, director of economics for the Maryland Business Research Partnership, a University of Baltimore think tank.

Story said Columbia's ambitious goal of emerging as a photonics corridor is not going to happen soon, but he remains optimistic that it will once the market rebounds.

"At some point in the future, the demand for ever more bandwidth will rekindle this industry," he said, adding that Howard County will be positioned to capture the growth.

Also, while companies such as Bookham struggle, some tech companies in the county are successful, Story said. The county "continues to be a technology corridor, but [the photonics] corridor has been depressed and continues to be depressed," he said.

Howard County isn't the only part of the region thwarted by the telecommunications downturn. Ciena Corp., the fiber-optic equipment maker in Linthicum, has cut 1,655 jobs since November and is letting another 110 go during the next couple of months. WorldCom Inc. is laying off about 680 workers in Hunt Valley, 20 in Frederick and five in Baltimore.

"To some degree the question is, are these workers able to find jobs in other industries? And, unfortunately, this is a difficult time to do that," said Scott Hoyt, an economist who analyzes Maryland and Washington, D.C., for Economy.com.

Shortage of demand

Stephen Abely, Bookham's chief financial officer, said the company didn't have enough demand to keep plants in Maryland and England open. (The company also said this week that it was shutting down one of its facilities in England.)

In 1999, the optical-component market for 2002-03 was estimated to be $25 billion, and Bookham hoped to grab a significant share of that, Abely said. Today, the market is estimated to be only $2.5 billion, he said.

"You just have to put it in perspective," Abely said.

Jim Jungjohann, an optics analyst at CIBC World Markets, said the problem in the components industry is that there's no demand and too much existing capacity. "The marketplace for these devices has just been obliterated," he said.

But Bookham's story in Howard County is more one of unrealized potential than of actual loss, said David S. Iannucci, Maryland's secretary of business and economic development.

With 45 employees, Bookham was well below the 1,000 jobs it had hoped to create. The company even backed away from a $1 million incentive package from the state, because it wasn't going to meet certain growth targets required to receive the funding.

Bookham is still paying rent to its landlord but is hoping to sublease the space and sell its equipment. Dwight Taylor, president of the development group at Corporate Office Properties Trust, which owns the building, said he believes the building will attract tenants, in part because it has a 50,000-square-foot "clean room," an area used to make semiconductors.

Iannucci said that, because of Howard County's quality of life, solid work force and access to higher education and federal facilities, he is confident that the county, which had begun to emerge as a photonics capital, will continue to enjoy success in the industry.

High-tech a small part

Also, Clinch of the University of Baltimore said high-tech is only a small piece of Howard County's industry. In 2000, 13.2 percent of the private-sector jobs in Howard County were high-tech, according to the most recent numbers from the Maryland Department of Labor, Licensing and Regulation.

Clinch said that parts of Howard's technology industry, such as the county's high-tech incubator, continue to prosper. He said he believes photonics is an industry that will grow again in Howard, despite this week's news about Bookham.

"It's bad news for the people, it's bad news for the county," he said. "But long-term, I think that as long as we can keep the industry and the people here ... Howard will benefit."

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