Tunable laser startup Agility Communications Inc. strongly refutes rumors that it's in trouble.

The company is struggling, alright. But it's struggling to keep up with unexpected demand -- not struggling with yield problems and a shortage of funds, according to Ron Nelson, Agility's president and CEO.

Nelson says the market for tunable lasers has roared into life this year, confirming recent remarks made by a rival startup in this space, Iolon Inc.. He gives the same reason - that vendors are routinely designing tunable lasers into DWDM gear, and carriers are buying this sort of kit (see Iolon's Alright ).

The upsurge in orders caught Agility by surprise, according to Nelson. "Our lead times are stretched out," he says. The company is addressing the problem by bringing its full automated production plant in Pennsylvania out of mothballs and hiring staff to run it.

Nelson acknowledges that Agility cut its workforce by about 10 percent a month or two ago, but says this was part of an efficiency improvement plan, not a general layoff to cut costs.

"Just in the last week we've got two large orders from Tier 1 systems houses," says Nelson. "We've got just a ton of lasers that have been deployed and are carrying live traffic... I think we've probably got 80 to 90 percent of the market right now."

Nelson says there's no truth in rumors that Agility is in financial trouble. "We do want to raise a little bit more funding, but we're in no panic, and we've got a lot of interest from investors," he says.

Nelson declines to say how much Agility is raising, but says the company's strong order book means that the round is likely to be oversubscribed by existing investors.

"We're the trendsetter in tunable lasers," says Nelson. Plenty of big components companies would be interested in buying Agility, he says, "but we're not up for sale."

— Peter Heywood, Founding Editor, Light Reading

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