3D Printers

Zecotek Photonics Enters 3D Printing with Disruptive Technology

Zecotek Photonics, listed on both the U.S. OTC market [ZMSPF] and the TSX Venture Exchange [ZMS], is making a compelling strategic move into the 3D printing industry.

The company announced it is launching a 3D printing interface that offers significant design, cost and time advantages in commercial applications.

Zecotek CEO Dr. A.F Zerrouk stated:

“Zecotek`s 3D display technology creates significant advantages in the design process related to 3D printing. By creating a user interface between the 3D printer and our own patented 3D display, we offer end-users the most realistic view of the solid object being created on the printer.  Individual or multiple users will have the ability to view the object in full 3D, from all perspectives, and edit the object as desired. The interface will have a rich variety of interactive features and offer the ability to see a true 3D image during the design process which can save both time, material and cost.”

Company Overview

Founded in 2004, Zecotek Photonics develops imaging, laser, and 3D display systems for applications in the medical, tech, and industrial sectors. The company possesses a rich portfolio of over 50 U.S. and global patents across its three divisions – Imaging Systems, Laser Systems, and 3D Display Systems – and operates laboratories in the U.S., Canada, Singapore, Korea, and Russia.  Zecotek has strategic alliances and joint ventures with CERN in Switzerland, Beijing Opto-Electronics Technology Co. Ltd. in China, the University of Washington in the U.S., and both NuCare Medical Systems and the National NanoFab Center in South Korea.

Zecotek has 91 million shares outstanding and a market cap of approximately $70 million. Despite their modest size, they are audited by KPMG, one of the ‘Big Four’ accounting firms.  A quick snapshot of the company is available through their January 2014 corporate profile.

Patent Protected Technologies Deliver a Significant Advantage

While today’s announcement suggests that Zecotek is preparing to shift at least some of its strategic focus towards 3D printing, the company’s major focus over the last year has been the development of its Imaging Systems division. This division develops and manufactures components for advanced imaging products, primarily positron emission topography (“PET”) and MRI scanners for the medical industry. Three key patent protected technologies have driven Zecotek’s success in this field:

  1. Integrated Detector Modules for PET/MRI scanners, a data acquisition board and readout system.
  2. Multi-Pixel Avalanche Diode (“MAPD”) solid-state photo detectors. These are designed to replace photo multiplier tubes, which currently serve as the most commonly used photo detector in PET/MRI scanners. The MAPD detectors are smaller, require less voltage, and are not affected by the presence of magnetic fields – and as a result address three of the major drawbacks of photo multiplier tubes. Zecotek has authored a white paper that clearly outlines the advantages of its MAPD detectors.
  3. Lutetium Fine Silicate (“LFS”) scintillation crystals. Scintillation crystals typically account for roughly a third of the cost of a PET/MRI scanner. Zecotek’s LFS crystals, relative to other commonly used crystals, boast both higher light yields and faster decay times – the key factors in producing higher quality photos. A white paper from the company summarizes these advantages.

The combination of these three patents makes Zecotek the only company in the world in possession of all three of the key elements necessary for PET/MRI scanner construction. Until last year, however, the company had aggressively pursued the commercialization of these technologies.

Commercialization of Existing Technologies Now Underway

In July of 2013, Zecotek entered into a commercialization partnership with Hamamatsu Photonics, the world’s leading supplier of optoelectronics components in PET/MRI scanners and a supplier for all the major PET/MRI manufacturers.   The potential of this partnership has already begun to emerge. Since July, Hamamatsu has placed two orders for Zecotek’s patented Lutetium Fine Silicate (LFS) scintillation crystals – the first for $500,000 and the second, just two months ago, for $1.5 million. The partnership between these two companies is intended ‘to commercialize existing imaging technologies and to collaborate on the upgrade and manufacture of photo detectors, integrated detector modules and associated electronics and data acquisition modules for the imaging markets at large.’ Based on these two deals, it seems that Hamamatsu is well positioned to help Zecotek penetrate large-scale imaging markets.

Hamamatsu is also heavily involved in PET-related research and development. The partnership calls for the two companies to collaborate on improvements to Zecotek’s detectors and modules, with Hamamatsu funding joint R&D and product development but both companies retaining ownership of their own patents and IP. It seems likely that this partnership will soon lead to commercialization of these two technologies – and perhaps others within Zecotek’s extensive patent portfolio.

CERN: The Ultimate Scientific Seal of Approval

As a confirmation of the technological capabilities of Zecotek, the company is currently in a multi-year research partnership CERN, the European Organization for Nuclear Research in Switzerland. CERN are the architects of the Large Hadron Collider, and one of the world’s largest and most respected centers for scientific research. CERN has chosen to utilize Zecotek’s MAPD detectors rather than photo multiplier tubes, and has received positive results after employing the detectors in several projects and experiments. CERN is also utilizing Zecotek’s LFS crystals in further research to confirm the existence of the Higgs Boson particle at the LHC. This may require considerable quantities of the crystals, representing a significant potential order for the company. Most importantly, CERN’s usage of Zecotek’s products serves as unequivocal validation of their superior performance, an obvious marketing benefit on their path towards continued commercialization.

One More Potential Product: The ‘Other’ 3D

Zecotek is also in discussions with certain major electronics companies to develop a flat screen, glasses-free, ‘true 3D’ HD television, as the company also holds key patents in 3D display technology. , In this article, ‘Glasses-Free Full HD 3D TV May Be Closer Than You Think,’ Dr. A.F. Zerrouk, Zecotek’s Chairman, President, and CEO, expounded on the product’s path towards commercialization:

“We have overcome the main technical barriers required to meet the consumer preference for flat screen form factors and HD picture quality with available OLED/LED flat screen display technologies. Our strategy is to partner with industry leading OEMs to commercialize our patented technologies. Renewed discussions are now in progress and we feel confident about reaching a mutually rewarding business arrangement.”

While there are multiple potential markets for this product and its initial demonstrations have received positive industry reviews, it is not currently in production. For the time being, Zecotek’s focus appears to be on both its Imaging Systems and its new 3D printing initiatives.

Zacks sees Huge Upside

In October of 2013, Zacks’ analyst Brian Marckx initiated coverage on Zecotek with both an ‘Outperform’ rating and a $4.00 price target. A key factor in Mr. Marckx’s analysis is Zecotek’s development from pure R&D into a revenue generating business. The report suggests that the company could ramp revenue quickly, and that PET scanner related sales  alone could grow from $3 million in fiscal 2014 to $12 million in fiscal 2016 and as much as $39 million by 2023. Note that these revenue numbers are based solely on  the continued commercialization of  Zecotek’s LFS scintillation crystals for use in PET scanners, and do not include the potential of either the disruptive technology announced today or any contribution from the company’s relationship with CERN.

Zeckotek is also the plaintiff in a patent infringement lawsuit. The Zacks report provides some details on these proceedings, which could represent additional upside to the story. Mr. Marckx writes:

Specifically noteworthy to the potential of their intellectual property is a patent lawsuit that Zecotek brought  against Saint-Gobain, a 43 billion (revenue) French materials company, and Philips Healthcare, a behemoth in the medical device industry and one of the leading PET scanner manufacturers. The lawsuit alleges that Saint-Gobain infringed on a Zecotek-owned patent covering their LFS scintillation crystals and accuses Philips of using these crystals in their PET scanners. The lawsuit was brought in February 2012 and a Markman hearing was held in July 2013. The company and their lawyers believe that they have a strong case. If victorious, this could result in a potentially significant damages award for Zecotek.

Now Entering 3D Printing with Disruptive Technology

The ability to project manipulate, and edit an object prior to 3D printing using Zecotek’s patented holographic display imaging technology that creates the most realistic view possible could be game-changing for the industry. The ability to realize significant design, cost and time advantages is not only a common goal for the 3D printing industry, it’s the core driver for the industry’s forward growth.

Significantly, Zecotek indicates they have a path to commercialization and mass production. This could be with their existing partner Hamamatsu, the world’s leading supplier of optoelectronics components, or some other strategic partner. This will minimize risk of significant share dilution for current and future shareholders.


Zecotek Photonics possesses advanced, patented technologies and products used by  a world- leading research institute, generated $2 million in revenue in the most recent quarter, has an existing partnership with Hamamatsu for commercialization of advanced imaging technologies, has a strong patent suit against Philips and St.-Gobain which one analyst predicts “could result in a potentially significant damages award” and is quickly moving from “Research and Development” to “Revenue and Dollars.”

Now entering the burgeoning 3D printing industry with patented technology in hand that meets an industry need to reduce design time, materials and cost, Zecotek Photonics will be, in my opinion, among the best investments in the 3D printing space during 2014

Disclosure: I am long shares of Zecotek Photonics.