Light Reading

JDSU Is Still an Optical Force

Dan O'Shea
3/12/2014
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Everyone has an SDN play these days, even optical components companies like JDSU. Brandon Collings, CTO of communications and commercial optical products at JDSU (Nasdaq: JDSU; Toronto: JDU), recently told Light Reading, "In software defined networks, our hardware enables our customers -- the equipment manufacturers -- to be more flexible and cost-efficient with their equipment. They can focus on the control plane, where they add SDN value."

Maybe it's an indirect SDN play, but part of how JDSU highlights the significance of its contribution at the optical components level. Though the company has spent much of the last year binging on acquisitions in the test and measurement sector, it made some announcements this week at OFC 2014 in San Francisco reminding the industry that it's also a long-standing player in the market for optical transceivers, pump lasers, and other optical components.

The new offerings include a CFP4 LR4 transceiver module, super-transport ROADM blade, a tunable SFP+ transceiver and pump lasers aimed at reducing power consumption in much needed signal amplification for 100G networks. (See JDSU Preps Optical Components, Test Gear for OFC.) Regarding those pump lasers Collings said, "Next-gen networks are using more power at 100G for amplification over long distances, so there's a need to develop more cost-efficient lasers with reduced power consumption."

Product announcements aside, financial analysts seem to like what they are hearing from JDSU. After meeting with JDSU at OFC this week, MKM Partners Managing Director Michael Genovese wrote in a research note that improved 100G demand in North America later this year and the prospect for 100G business in China through Huawei Technologies are brightening his outlook for JDSU. "While Huawei tends to assemble its own line cards through related entities, it seems unlikely that it will vertically integrate into high-end 100G components (modulators and tunable laser assemblies) that it sources from JDSU as the primary vendor," he wrote.

The optical news comes after JDSU has had a busy year beefing up its test and measurement business via acquisitions of Trendium, Network Instruments, and Arieso. (See JDSU Buys More 4G SPIT Smarts, JDSU Acquires Network Instruments, and JDSU Acquires Arieso for $85M.)

That binge might have put JDSU's optical efforts into the shadows, but in reality the company has been upbeat about optical since early 2013. It seems far removed from the days when it was rumored to be exiting the optical sector, and even further removed from the dark days of the early aughts. (See JDSU Sees Growth in Optical & SPIT, JDSU May Be Mulling Optical Exit, and JDSU Writes Off Billions More.)

— Dan O'Shea, Managing Editor, Light Reading


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DOShea
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DOShea,
User Rank: Blogger
3/12/2014 | 3:50:09 PM
More analyst input
Alex Henderson, Needham & Co., also had some positive thoughts re: the China opportunity, in his own research note:

(Excerpt) "JDSU is a good gauge of the situation in China.  Its core 100G coherent modulator line is sold out even as the company drives increases in production capacity.  It's also seeing strong growth in the coherent receiver arena.   In addition, JDSU is also seeing accelerating demand from the LTE build for both top of tower and backhaul applications.  It's pretty clear that the demand out of China, from JDSU's perspective, has accelerated and is across a number of product lines."
DOShea
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DOShea,
User Rank: Blogger
3/12/2014 | 3:44:09 PM
Component consolidation?
JDSU has been spending its acquisition dollars in test and measurement lately. Could the brighter outlook suggest it might help consolidate the optical components sector, too? Last time that happend, an industry-wide downturn soon followed, but hey, it's a new decade.
thebulk
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thebulk,
User Rank: Light Sabre
3/12/2014 | 3:38:48 PM
Always impressed
I have always been impressed with the JDSU line of equipment. I have worked with them for several years and used several product lines and always thought they stood out from others in the same space. 
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