Optical/IP Networks

Test Gear Shortage Snags Startups

A shortage of test equipment needed to build optical networking gear is snarling the plans of a range of vendors, particularly startups.

Companies say they're waiting two to four months for tools they need to make a bunch of products, from fiber optic cable subassemblies to DWDM platforms. The test tools include laser power meters, power loss testers, light sources, fault finders, and tunable lasers.

Startups seem most affected, because they don't have the relationships with suppliers that guarantee them a place in the queue. "If you're Joe Schmoe you're going to have a tough time," says one optical switch vendor, who requested anonymity. "I can't tell you how many times I've wound up on my supplier's loading dock because I just couldn't wait any longer. D'you think I'd have the same problem if I were Lucent?"

"Yes, there are some problems," says Rodolfo Calvillo, VP of business development at Optical Datacom Corp., a startup that makes cable assemblies -- and that is rumored to be frustrated at the dearth of test gear that's holding up its ability to expand its operations. "We're in a difficult industry. I can't really blame the suppliers for the rapid growth and tremendous demand."

Suppliers of optical test tools acknowledge the problem. "Demand is way up, and it's harder and harder to keep items in stock," says John Kane, national sales manager for RIFOCS Corp., which makes fiber optic test and measurement gear.

RIFOCS and its competitors, including companies such as Melles Griot Inc., New Focus Inc. (Nasdaq: NUFO), and Newport Corp. (Nasdaq: NEWP), claim there are several reasons why they can't meet their orders. These include a lack of manufacturing capacity, problems with manufacturing techniques, and reliance on a limited number of suppliers for the raw materials to make test tools.

The test equipment vendors say they're taking steps to alleviate these problems. Kane of RIFOCS, for example, says his company's buying larger quantities of raw materials, using more vendors, and asking customers to supply forecasts of their buying patterns, in order to avoid being caught short.

Others are trying to become more self-sufficient, in some cases by acquiring new companies, as GN Nettest did last week with its purchase of Photonetics (see Great Dane Aims for Best in Show). In other instances, test vendors are expanding internal facilities, as New Focus has done by opening a plant in Shenzhen, China.

All of this should help alleviate some of the wait times and free up supplies for startups as well. Still, it won't be easy. The shortage is expected to continue for some time, since it's part of the larger shortage of optical components (see Components Shortage Delays Deliveries). Even if shortages stop in one area, they could crop up in another. "We feel we're getting better at forecasting and planning. And we do plan to widen our facilities and take other measures," says Kane. "But it's an ongoing problem."

-- Mary Jander, senior editor, Light Reading http://www.lightreading.com

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