Huawei Gives Finisar a Boost
News of the contract comes from a statement by Kristina Keneally, premier of New South Wales, Australia -- home to Finisar's ROADM efforts. Keneally's office claims Finisar Australia will be boosting its capacity by 40 percent.
The deal follows up a November contract for Finisar to supply wavelength selective switches (WSSs) to Huawei. A WSS is the switching element that goes inside a ROADM.
ROADMs already represent 14 percent of Finisar's sales, but the company has some big growth plans. It's claimed ROADM sales could jump 20 percent to 30 percent this fiscal quarter (which ends in July) and the following quarter. That would get ROADMs to around 20 percent of the total, according to analyst Paul Bonenfant of Morgan Keegan & Company Inc.
"The news increases our confidence in our ROADM sales estimates and suggests they may be conservative given customer demand," Bonenfant wrote in a note issued early this morning.
It would help Finisar add to what's become a strong position in ROADMs. (See Finisar Climbs ROADM Ranks.)
ROADMs are a hot commodity in optical components, as carriers look for more flexiblity in the optical network. If anything, they're asking for ROADMs to get even more flexible. (See Verizon: Give Us More Flexible ROADMs for 100G and Nistica Hires a COO.)
One feature of Finisar's WSSs is a software programmability that can add to that flexibility, as the devices can be tuned to wider or skinnier DWDM grid assignments. Nistica claims to be the only other ROADM component company that can accommodate this possible "gridless" requirement, although to be fair, pretty much every WSS supplier says they'll be able to do it, if the need arises. (See OFC/NFOEC: For ROADMs, Less Is More.)
— Craig Matsumoto, West Coast Editor, Light Reading