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Optical/IP

Huawei Gives Finisar a Boost

Finisar Corp. (Nasdaq: FNSR) could be getting 20 percent of its revenues from reconfigurable optical add-drop multiplexers (ROADMs) by October, thanks in part to an expanded contract with Huawei Technologies Co. Ltd.

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

Stefan Sip 12/5/2012 | 4:30:07 PM
re: Huawei Gives Finisar a Boost

Huawei is probably top-10 in optics already, well established in RoW outside of North America.  With an additional boost in its ROADM purchase, does that mean they are making a significant in-road here in NA or are they just increasing their market share elsewhere into the top 5?

Balet 12/5/2012 | 4:30:03 PM
re: Huawei Gives Finisar a Boost

Huawei beats everyone by far in ROADm applications, IMHO.


Finisar has the world best WSS, period. JDSU is usual slow and w/o any marketing direction,  while their team in Ottawa is trying to save their jobs; CoAdna is cheap selling unqualified WSS as qualified, with a pretty non-flexible design; Capella is still alive (wow), XTellus (sorry Oclaro) needs to get their act together fast and more than Japan to their portfolio; Nistica must be dead ( even with all that NEL money) with a management they have; how about NEL's own WSS they are trying to market?


Any thoughts?

Pete Baldwin 12/5/2012 | 4:29:57 PM
re: Huawei Gives Finisar a Boost

Thanks for the input, Balet.  Scathing stuff.  I hadn't heard about NEL's own WSS...


fwiw, Oclaro has written in to tell us they, too, can do gridless ROADMs, at low port counts.  I'd suspect most of the vendors are going to be saying similar things soon.

Balet 12/5/2012 | 4:29:51 PM
re: Huawei Gives Finisar a Boost

Craig,


It looks like CoAdna and Xtellus are saying they can do gridless design. I am not sure they can, though, if I remember their products right. It's possible but difficult.


JDSU and Capella - don't see how they could do it at all.


NEL was showing their WSS at OFC, I believe. Not sure how it's desgined though. They were asking me 4 years ago to help with an LC approach, which I did not do.

Pete Baldwin 12/5/2012 | 4:29:46 PM
re: Huawei Gives Finisar a Boost

Interesting. I'll have to check out what NEL's got going on. Thanks, Balet.


I understand your doubts about some of the vendors, but you know how these things go... everyone's going to be saying they've got gridless.  Oclaro/Xtellus says they can definitely do it, for real, so - we'll see.

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