Enablence Gets a Switch
The deal, announced today, takes Enablence beyond its primary market of fiber-to-the-home (FTTH) access and, possibly, into reconfigurable optical add-drop multiplexers (ROADMs).
Specifically, Enablence has agreed to acquire the technology for a DuPont-developed switching fabric. Beyond ROADMs, the switch can be used in test and measurement equipment, or in devices such as variable optical attenuators.
Enablence is issuing roughly $9.5 million in shares to pay for the transaction. In return, DuPont is planning to make a cash investment in the company.
Quite a few startups are targeting ROADM components, including Capella Photonics Inc. , CoAdna Photonics Inc. , and Xtellus Inc. ; they're having to compete with larger players such as JDSU (Nasdaq: JDSU; Toronto: JDU) and Optium Corp. (Nasdaq: OPTM), which is soon to be acquired by Finisar Corp. (Nasdaq: FNSR). (See Finisar & Optium Challenge JDSU.)
Optical switches have plenty of other uses, so it's possible Enablence has other plans for the DuPont technology. Enablence officials weren't available today to elaborate.
Enablence uses photonic integration to build next-generation transceivers for FTTH. Its home-grown products haven't started generating substantial revenues yet, but Enablence will be getting some revenues through recent acquisitions.
Enablence picked up components startups Albis and ANDevices, and it's also gone upstream by buying Wave7 Optics Inc. , an FTTH systems supplier. (See Enablence Completes ANDevices Buy, Enablence Acquires Wave7, and OFC: Mergers Pay Off.)
Much of its strategy appears to hinge on applying photonic integrated circuit (PIC) technology to make FTTH transceivers, though, and at least one analyst wonders if that could be as much a handicap as a boon. While PICs offer the promise of automated manufacturing, old-fashioned transceivers have become so cheap that some customers might not care.
"Two years ago, Enablence's opportunity looked a lot more attractive, but today the price environment appears to have eroded enormously," wrote TD Newcrest analyst Chris Umiastowski in an April report.
Enablence does have plans beyond FTTH, including a 100-Gbit/s Ethernet transceiver that could be ready to ship in 2009, Heavy Reading analyst Sterling Perrin noted in a March report on photonic integration. (See Silicon Photonics Advance PIC Possibilities.)
— Craig Matsumoto, West Coast Editor, Light Reading