Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of the registrant’s knowledge, in
definitive proxy or information statements incorporated by reference in Part
III
of this Form 10-K or any amendment to this Form 10-K. £
Indicate
by check mark whether the
registrant is a large accelerated filer, an accelerated filer, or a
non-accelerated filer. See definition of “accelerated filer and large
accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
one):
|
£Large
accelerated
filer
|
T Accelerated
filer
|
£Non-accelerated
filer
|
|
Indicate
by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the
Act).
|
£Yes TNo
|
The
aggregate market value of common
stock held by non-affiliates of the registrant as of March 30, 2007(the
last business day of the
registrant's most recently completed second fiscal quarter) was approximately
$203.8 million,
based on the closing sale price of
$5.00 per share of common stock as reported on the NASDAQ Global
Market.
The
number of shares outstanding of the
registrant’s no par value common stock as of December 26, 2007was
52,253,883.
DOCUMENTS
INCORPORATED BY
REFERENCE
In
accordance with General Instruction
G(3) of Form 10-K, certain information required by Part III hereof will either
be incorporated into this Form 10-K by reference to the Registrant's Definitive
Proxy Statement for the Registrant's 2008 Annual Meeting of Stockholders filed
within 120 days of September 30, 2007or
will be included in an amendment to
this Form 10-K filed within 120 days of September 30, 2007.
FORM
10-K
For
The Fiscal Year Ended September 30, 2007
TABLE
OF CONTENTS
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PAGE
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Part
I
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Item
1.
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Item
1A.
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Item
1B.
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Item
2.
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Item
3.
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Item
4.
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Part
II
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Item
5.
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Item
6.
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Item
7.
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Item
7A.
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Item
8.
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for
the fiscal years ended September 30, 2007, 2006, and 2005
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as
of September 30, 2007 and 2006
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for
the fiscal years ended September 30, 2007, 2006, and 2005
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for
the fiscal years ended September 30, 2007, 2006, and 2005
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Item
9.
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Item
9A.
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Item
9B.
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Part
III
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Item
10.
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Item
11.
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Item
12.
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Item
13.
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Item
14.
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Part
IV
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Item
15.
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PART
I
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Business
|
Company
Overview
EMCORE
Corporation (the “Company”, “we”
or “EMCORE”) is a leading provider of compound semiconductor-based
components and subsystems for the broadband, fiber optic, satellite and
terrestrial solar power markets. We were established in 1984 as a New
Jersey corporation. We have two reporting segments: Fiber Optics and
Photovoltaics. EMCORE's Fiber Optics segment offers optical
components, subsystems and systems that enable the transmission of video, voice
and data over high-capacity fiber optic cables for high-speed data and
telecommunications, cable television (“CATV”) and fiber-to-the-premises (“FTTP”)
networks. EMCORE's Photovoltaics segment provides solar products for
satellite and terrestrial applications. For satellite applications, EMCORE
offers high-efficiency compound semiconductor-based gallium arsenide (“GaAs”)
solar cells, covered interconnect cells (“CICs”) and fully integrated solar
panels. For terrestrial applications, EMCORE offers Concentrating
Photovoltaic Systems (“CPV”) for utility scale solar applications as well as
offering its high-efficiency GaAs solar cells and CPV components for use in
solar power concentrator systems. For specific information about our
company, our products or the markets we serve, please visit our website at
http://www.emcore.com.
EMCORE
is
subject to the information requirements of the Securities Exchange Act of 1934.
We file periodic reports, current reports, proxy statements and other
information with the Securities and Exchange Commission (“SEC”). The
SEC maintains a website (http://www.sec.gov) that contains all of our
information that has been filed electronically. Our annual reports are available
on our website, free of charge, as soon as reasonably practicable after such
material is electronically filed with, or furnished to, the SEC. The
information on EMCORE’s website is not incorporated by reference into and is not
made a part of this Annual Report on Form 10-K or a part of any other report
or
filing with the SEC.
Industry
Overview
Compound
semiconductor-based products provide the foundation of components, subsystems
and systems used in a broad range of technology markets, including broadband,
datacom, telecom and satellite communication equipment and networks, advanced
computing technologies and satellite and terrestrial solar power generation
systems. Compound semiconductor materials are capable of providing
electrical or electro-optical functions, such as emitting optical communications
signals, detecting optical communications signals, and converting sunlight
into
electricity.
Our
Markets
Collectively,
our products serve the telecommunications, cable television, defense and
homeland security, and satellite and terrestrial solar power
markets. The following illustration shows how our products are
deployed throughout the world’s communication infrastructure and power
generation markets.
Fiber
Optics
Our
fiber
optics products enable information that is encoded on light signals to be
transmitted, routed (switched) and received in communication systems and
networks. Our Fiber
Optics segment primarily targets the following markets:
|
|
·
|
Cable
Television (CATV) Networks- We are a
market leader in
providing radio frequency (RF) over fiber products for the CATV
industry. Our products are used in hybrid fiber coaxial (HFC)
networks that enable cable service operators to offer multiple advanced
services to meet the expanding demand for high-speed Internet, on-demand
and interactive video and other advanced services, such as high-definition
television (HDTV)
and voice over IP
(VoIP). Our CATV products include forward and return-path
analog and digital lasers, photodetectors and subassembly components,
broadcast analog and digital fiber-optic transmitters and quadrature
amplitude modulation (QAM) transmitters and receivers. Our
products provide our customers with increased capacity to offer more
cable
services; increased data transmission distance, speed and bandwidth;
lower
noise video receive; and lower power
consumption.
|
|
|
·
|
Fiber-To-The-Premises
(FTTP) Networks-
Telecommunications companies are increasingly extending their optical
infrastructure to their customers’ location in order to deliver higher
bandwidth services. We have developed and maintained customer qualified
FTTP components and subsystem products to support plans by telephone
companies to offer voice, video and data services through the deployment
of new fiber-based access networks. Our FTTP products include
passive optical network (PON) transceivers, analog fiber optic
transmitters for video overlay and high-power erbium-doped fiber
amplifiers (EDFA), analog and digital lasers, photodetectors and
subassembly components, analog video receivers and multi-dwelling
unit
(MDU)
video receivers. Our
products provide our customers with higher performance for analog
and
digital characteristics; integrated infrastructure to support competitive
costs; and additional support for multiple
standards.
|
|
|
·
|
Data
Communications Networks- We provide
leading-edge optical
components and transceiver modules for data applications that enable
switch-to-switch, router-to-router and server-to-server backbone
connections at aggregate speeds of 10 gigabits per second (G) and
above. Our products support 10G Ethernet, optical Infiniband
and parallel optical interconnects for enterprise Ethernet, metro
Ethernet
and high performance computing (HPC)
applications. Our data
communications products include components and transceivers for LX4,
SR,
LR, LRM and CX4 10G Ethernet applications and optical Infiniband,
high-speed lasers, photodetectors and subassembly components, parallel
optical modules and optical media converters. Our products
provide our customers with increased network capacity; increased
data
transmission distance and speeds; increased bandwidth; lower power
consumption; improved cable management over copper interconnects;
and
lower cost optical interconnections for massively parallel
multi-processors.
|
|
|
·
|
Telecommunications
Networks- Our
leading-edge optical components and modules enable high-speed (up
to an
aggregate 40G) optical interconnections that drive advanced architectures
in next-generation carrier class switching and routing networks.
Our
products are used in equipment in the network core and key metro
optical
nodes of voice telephony and Internet infrastructures. Our
products include a comprehensive parallel optical transceiver family,
distributed feedback lasers (“DFB”) and avalanche photo detections
(“APD”)
components in various packages
for OC-48 and OC-192 applications. Recently, we developed and
launched a XFP DWDM (dense wavelength division multiplexing) transceiver
and a 300-pin small-form-factor tunable transponder product for the
telecommunications market.
|
|
|
·
|
Satellite
Communications (Satcom) Networks- We are a
leading provider of
optical components and systems for use in equipment that provides
high-performance optical data links for the terrestrial portion of
satellite communications networks. Our products include transmitters,
receivers, subsystems and systems that transport wideband radio frequency
and microwave signals between satellite hub equipment and antenna
dishes. Our products provide our customers with increased
bandwidth and lower power
consumption.
|
|
|
·
|
Storage
Area
Networks- Our high
performance optical components are also used in high-end data storage
solutions to improve the performance of the storage
infrastructure. Products include high-speed 850nm vertical
cavity surface emitting lasers (VCSELs), DFBs, photodiode components
for
2G, 8G and 10G Fibre Channel. Our products also include 10G
(single data rate Infiniband SDR IB) and 20G (double data rate Infiniband
DDRIB)
transmit and receive optical
media converters.
|
|
|
·
|
Video
Transport-
Our video transport
product line offers solutions for broadcasting, transportation, IP
television (IPTV), mobile video and security & surveillance
applications over private and public networks. EMCORE’s video, audio, data
and RF transmission systems serve both analog and digital requirements,
providing cost-effective, flexible solutions geared for network
reconstruction and
expansion.
|
|
|
·
|
Defense
and
Homeland Security-
Leveraging our expertise in RF module design and high-speed parallel
optics, we provide a suite of ruggedized products that meet the
reliability and durability requirements of the U.S. Government and
defense
markets. Our specialty defense products include fiber optic
gyro components used in precision guided munitions, ruggedized parallel
optic transmitters and receivers, high-frequency RF fiber optic link
components for towed decoy systems, optical delay lines for radar
systems,
EDFAs, terahertz spectroscopy systems and other products. Our
products provide our customers with high frequency and dynamic range;
compact form-factor; and extreme temperature, shock and vibration
tolerance.
|
|
|
·
|
Consumer
Products- We extend
our optical technology into the consumer market by integrating our
VCSELs
into optical computer mice and ultra short data links. We are
in production with customers on several products and currently qualifying
our products with additional customers. An optical computer
mouse with laser illumination is superior to LED-based illumination
in
that it reveals surface structures that a LED light source cannot
uncover.
VCSELs enable computer mice to track with greater accuracy, on more
surfaces and with greater responsiveness than existing LED-based
solutions.
|
The
following charts depict some of our
fiber optics products:
As
summarized in the table below, we
have positioned ourselves as a vertically integrated fiber optics component
and
subsystem manufacturer that services a significant portion of the digital and
analog communications market:
|
Datacom
and
Telecom
|
Broadband
|
|||||||
|
Serial
1-4G
|
Serial
10G
|
Parallel
|
CATV
|
FTTP
|
||||
|
850nm
|
1310-1550nm
|
850nm
|
1310-1550nm
|
Copper
|
850nm
|
1310-1550nm
|
1310,1490,1550nm
|
|
|
MODULES
|
SR
X2
SR
SFP+
|
LX4
Xenpak LX4
X2
LR
X2
LR
SFP+
ZR
XFP DWDM
Tunable
SFF
300-pin
Tspdr
LRM
SFP+
|
CX4
Xenpak
CX4
X2
CX4
XFP
|
SNAP12
SmartLink
Mini95
QSFP
|
Ex-Mod/Dir-Mod
/Lin-Mod
1550,
QAM
and
1310
Transmitters
Receiver
Subsystem
Tx
Engine
Rx
Video
Card
|
B-PON
TxRx
B-PON
MDU
TxRx
G-PON
TxRx
GPON
MDU
TxRx
|
||
|
OSAS
|
TO
- Cans
LC/SC
TOSA
LC/SC
ROSA
|
TO
- Cans
LC/SC
TOSA
LC/SC
ROSA
|
LC/SC
TOSA
LC/SC
ROSA
|
DML
Butterfly
Mini
Dil Rx
LC/SC
ROSA
LRM
TOSA
Linear
ROSA
|
AOSA
|
DFB
Butterfly
Analog
PD
OSA
|
DFB
Laser
TO
APD-TIA
TO
|
|
|
CHIPS
|
VCSELs
PDs
|
FP, DFBs
PINs, APDs
|
VCSELs
PDs
|
FP, DFBs
PINs, APDs
|
VCSEL
Array
PIN
Array
|
Analog
DFB
Analog
PD
|
DFB
Laser
APDs
|
|
Photovoltaics
We
believe our high-efficiency compound semiconductor-based multi-junction solar
cell products provide our customers with compelling cost and performance
advantages over traditional silicon-based solutions. These include
higher solar cell efficiency allowing for greater conversion of light into
electricity, an increased ability to benefit from use in solar concentrator
systems, ability to withstand high heat and radiation environments and reduced
overall footprint. Our
Photovoltaics segment primarily targets the
following
markets:
|
|
·
|
Satellite
Solar
Power Generation- We
are a leader in providing solar power generation solutions to the
global
communications satellite industry and U.S. Government space
programs. A satellite’s operational success and
corresponding revenue depend on its available power and its capacity
to
transmit data. We provide
advanced compound semiconductor-based solar cell and solar panel
products,
which are more resistant to radiation levels in space and generate
substantially more power from sunlight than silicon-based
solutions. Space power systems using our multi-junction solar
cells weigh less per unit of power than traditional silicon-based
solar
cells. These performance characteristics increase satellite useful
life,
increase satellites’ transmission capacity and reduce launch
costs. Our
products provide our customers with higher light to power conversion
efficiency for reduced size and launch costs; higher radiation tolerance;
and longer lifetime in harsh space environments. We
design and manufacture multi-junction compound semiconductor-based
solar cells for both commercial and military satellite applications.
We
currently manufacture and sell one of the most efficient and reliable,
radiation resistant advanced triple-junction solar cells in the world,
with an average "beginning of life" efficiency of 28.5%. In May
2007, EMCORE announced that it has attained solar conversion efficiency
of
31% for an entirely new class of advanced multi-junction solar cells
optimized for space applications. EMCORE is also the only
manufacturer to supply true monolithic bypass diodes for shadow
protection, utilizing several EMCORE patented methods. EMCORE also
provides covered interconnect cells (CICs) and solar panel lay-down
services, giving us the capability to manufacture complete solar
panels.
We can provide satellite manufacturers with proven integrated satellite
power solutions that considerably improve satellite economics. Satellite
manufacturers and solar array integrators rely on EMCORE to meet
their
satellite power needs with our proven flight heritage. The pictures
below
represent a solar cell and solar panel used for satellite space power
applications.
|
 |
 |
|
|
·
|
Terrestrial
Solar Power Generation- Solar
power generation
systems use photovoltaic cells to convert sunlight to electricity
and have
been used in space programs and, to a lesser extent, in terrestrial
applications for several decades. The market for terrestrial
solar power generation solutions has grown significantly as solar
power
generation technologies improve in efficiency, as global prices for
non-renewable energy sources (i.e., fossil fuels) continue to rise,
and as
concern has increased regarding the effect of carbon emissions on
global
warming. Terrestrial solar power generation has emerged as one of
the most
rapidly expanding renewable energy sources due to certain advantages
solar
power holds over other energy sources, including reduced environmental
impact, elimination of fuel price risk, installation flexibility,
scalability, distributed power generation (i.e., electric power is
generated at the point of use rather than transmitted from a central
station to the user), and reliability. The rapid increase in demand
for
solar power has created a growing need for highly efficient, reliable
and
cost-effective concentrating solar power systems.
|
EMCORE
has adapted its high-efficiency
compound semiconductor-based multi-junction solar
cell products for
terrestrial applications, which are intended for use with CPV
systems in utility-scale
installations. In August 2007, EMCORE announced that it has obtained
39% peak conversion efficiency under 1000x illumination on its terrestrial
concentrating solar cell products currently in volume
production. This compares favorably to typical efficiency of 15-21%
on silicon-based solar cells and approximately 35% for competing multi-junction
cells. We believe that solar concentrator systems assembled using our compound
semiconductor-based solar cells will be competitive with silicon-based solar
power generation systems because they are more efficient and, when combined
with
the advantages of concentration, we believe will result in a lower cost of
power
generated. Our multi-junction solar cell technology is not subject to
silicon shortages, which have led to increasing prices in the raw materials
required for silicon-based solar cells. &