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The Laser Industry
QPC's core products are semiconductor (or diode) lasers. Diode lasers arecommon place in telecommunications and optical fiber industries and other applications that do not require high power or brightness. Diode lasers are compact and more efficient than non-semi conductor lasers, but conventional diode lasers are low in beam quality, brightness and power. Traditional high-power lasers are gas or solid-state based lasers. These lasers are considerably larger, heavier and more costly than diode lasers and consumemore energy and require more maintenance than diode lasers.
The QPC Diode Laser
QPC's proprietary technology enables it to produce high-power lasers that combine the high beam quality, power and high efficiencies of gas andsolid-state lasers with the reduced size, weight and cost of diode lasers. This enables QPC to produce high-power lasers that QPC believes will yield factor-of-ten improvements in size, weight, efficiency and cost over conventional lasers. QPC believes these advantages will enable it to acquire significant market share in the existing market for high-power lasers and tocreate uses and markets for high-power lasers that are not possible withconventional laser technology.
QPC's Generation I offerings, released since 2004, are currently availableto the pumping, industrial, defense and medical markets. Generation I products include single emitters, mounted and unmounted bars covering wavelengths from800 nanometers (nm) to 1,500nm and power levels ranging from 2.5 W (singlestripe) to 50 W (25 element array).
QPC recently released four of its Generation II products for sale in January 2006 . These products deploy QPC's unique chip technology and offer enhanced brightness over the first generation products. Generation II products are under purchase orders from multiple customers including defense contractors, medical device companies, research institutions and industrialcompanies. QPC believes that its Generation II products include two significant advantages over other available diodes: (1) its non-absorbing mirror technology generates significantly higher power without causing catastrophic optical damage ("COD"); and (2) its internal gratings enable itscustomers to specify exact, desired wavelength within +/- 0.5 nanometers. Internal gratings eliminate the requirement for customers to cool or heattheir diodes to achieve a specified wavelength. QPC believes that no other diode manufacturer has technology that can compete with these two QPC advantages and QPC has obtained commercial and government contracts to support the further development of these products.
QPC's longer-term Generation III products are designed to combine surface emitting and extreme brightness technologies. Development contracts have been received from various areas of the United States Department of Defense. QPC expects to release Generation III prototypes in 2007. With these products, QPC intends to compete in the multi-billion dollar solid-state and gas lasermarkets -- particularly industrial welding -- by replacing them with powerful and less expensive Generation III diode solutions. In addition, QPC will seekto use these technologies to establish new markets in homeland security and defense, such as directed energy weapons that are low cost, small, light,rugged and efficient.