DALLAS, Texas – DZS (Nasdaq: DZSI), a global leader in access and optical edge infrastructure and cloud software solutions, today announced that it has entered into a partnership agreement with Fabrinet (NYSE: FN), a leading provider of advanced optical packaging and precision optical, electro-mechanical and electronic manufacturing services, enabling DZS to strategically shift to a contract manufacturing model.

Under this agreement, DZS will transition to Fabrinet its sourcing, procurement, order-fulfillment, manufacturing and Return Merchandise Authorization (RMA) activities in its Seminole, Florida facility by the end of calendar year 2022. The partnership will enable DZS to focus on advancing innovation across its access and optical edge platforms and cloud software solutions. The partnership is expected to improve profit margins, lower operational expenditures (OPEX) and improve working capital.

The new alliance is expected to enable DZS with the incremental scale to meet a growing pipeline of broadband access and optical edge infrastructure that has doubled since 2020, and to align with an anticipated decade long broadband upgrade cycle, Chinese cap & replacement projects and the more than $120 billion in global broadband stimulus. Increasingly, service providers are capitalizing on the unprecedented consumer demand for high-speed fixed and mobile broadband services fueled by interactive, low latency video and gaming, and IOT devices.

The transition to Fabrinet will begin in early October, with the goal of being fully operational by Jan. 1, 2023. Under the terms of the agreement, Fabrinet will provide turnkey procurement, manufacturing, testing, order fulfillment, and RMA services and systems integration from its state-of-the-art facilities. DZS will retain and continue to manage its supply chain relationships. Post transaction, the DZS Seminole, Florida-based operations, supply chain and manufacturing workforce will be reduced by approximately two-thirds and the remaining team will be relocated to an appropriately sized facility. For impacted employees, DZS will provide job placement support including onsite job fairs and internal transfer assistance.

Fabrinet has a global reputation as a trusted optical manufacturer that delivers state-of-the-art solutions and services to many of the most demanding technology companies in the world. Many of the DZS marquee customers are already very familiar with Fabrinet and trust its global capabilities.

Fabrinet is a world leader in precision optical, electro-optical, sophisticated electronic PCBA and electro-mechanical process technologies for high-mix, any-volume production, and offers a full range of vertically designed optical products and services. In addition to being an award-winning organization, Fabrinet is dedicated to ensuring full compliance with all associated quality and regulatory system requirements for each market they serve. This includes TL 9000, ISO 9001, 14001, 13485, 18001, TS 16949, AS 9100 and OSHA.

Read the full press release here.

DZS