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Manufacturing Low Cost Optoelectronic Components

Robert H. Weissman

Why do some products sell well while others with considerable technical merit languish? For an optoelectronic product to be successful in the marketplace, several important elements must be simultaneously achieved. First, the performance of the product must meet customer needs. Second, the product should have excellent quality and reliability. Finally, the price must be sufficiently low that customers are willing to buy the product. Selling price is determined to a major extent by the product's cost—the dollars it takes to manufacture each unit of product. This article discusses how manufacturing costs are calculated and how the issues of volume, yields, complexity, process robustness, and packaging impact cost. It is written for those who have little or no knowledge about manufacturing costs and presents easy to remember "rules of thumb" that provide considerable insight into what one must consider to achieve low production cost.