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Optical/IP

Finisar Moves Into ROADMs

Finisar Corp. (Nasdaq: FNSR) wants to strengthen its hand in telecom, and the company's first step this year is to insert itself into the world of reconfigurable optical add/drop multiplexers (ROADMs).

Finisar announced today it has taken an equity stake in Nistica , after contributing to the startup's $9 million funding round (plus a $1 million grant from the state of New Jersey). Finisar, through its sales channels, will start offering Nistica's MEMS-based ROADM components. (See Finisar, Nistica Team.)

Specific terms aren't being disclosed. Finisar CEO Jerry Rawls would only say that his company has become a "small investor" in Nistica. He expects Finisar could start seeing Nistica ROADM sales in the second half of the year.

It's an unusual move for a company better known for transceivers and lasers, but Finisar's reasoning is simple: Nistica happened to be out raising money.

"Since 2000, one of the things we have talked about is to increase our share of the market and to increase sales to telecom companies," Rawls says.

The Nistica deal is just a sign that the telecom effort is spreading beyond transceivers. Finisar is interested in getting into other telecom-focused products as well.

Tunable transponders would be an obvious choice, Rawls says. Finisar got into that area with last year's acquisition of Kodeos Communications Inc. , but could use a broader selection. (See Optium, Finisar Bulk Up.)

Finisar is after more than plain growth. The company sees systems makers trying to cut down on the number of suppliers they use -- a trend that usually favors the bigger suppliers. By piecing together a wider telecom net, Finisar hopes to be on more OEMs' short lists.

"We're trying to fill out some of those product voids we have, particularly on the long-haul WDM side," Rawls says. The process will probably take a couple of years, he adds.

Nistica emerged in 2006 as the brainchild of former Photuris executives. The startup is out to lower the cost of ROADMs, and it's at OFC/NFOEC this week touting a new core ROADM built with technology from Texas Instruments Inc. (NYSE: TXN). (See Photuris Crew Rides Again and Nistica Goes Full Fledge.)

— Craig Matsumoto, West Coast Editor, Light Reading



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