Optical components specialist Finisar is buying one of its industry partners, German vendor u2t Photonics AG, to boost its 100G portfolio. (See Finisar to Buy u2t Photonics.)
Finisar Corp. (Nasdaq: FNSR) is paying $20 million in cash and assuming debt of about $7 million to acquire u2t, which reported full year revenues of $33 million for 2013. The deal is expected to close before the end of January.
The deal will add u2t's indium-phosphide (InP)-based 100G high-speed receivers and photodetectors to Finisar's portfolio. But it will also give Finisar total ownership and control over the duo's collaborative efforts on InP-based IQ Mach-Zehnder modulators for 100G coherent applications, which were first announced in July 2013. (See Finisar, u²t Acquire 100G Tech.)
Finisar's plan is to combine all these elements with its own narrow-line-width tunable lasers so that it can offer integrated 100G coherent modules for the metro and long-haul transport markets, and then develop products for higher data rates and new telecom and datacom applications, and create form factors even smaller than the CFP2 module. (See OIF Updates on Optical Projects and Finisar Demos 100G CFP2.)
The move comes at a time when the market for 100G modules, where Finisar competes with the likes of Acacia Communications Inc. , Menara Networks , NeoPhotonics Corp. (NYSE: NPTN), and Oclaro Inc. (Nasdaq: OCLR), is set for a boost. The action in China is of particular interest to Finisar. (See 'China Hockey Stick' to Sweep Through Optical.)
Heavy Reading analyst at large Simon Stanley noted in his recent report, From 40/100G to 400G: A Competitive Analysis of Optical Modules & Components, that
- the introduction of second-generation pluggable optics is taking 100G networking for data centers and other enterprise applications into the mainstream market… The market for 100G networking in the all-important 80-500 km metro is rapidly taking off as vendors start delivering direct detect and coherent technology developed for the long-haul market in pluggable CFP optics developed for enterprise networks.
Finisar, which raised $225 million from the sale of convertible notes (bonds that can be converted into stock) last December, isn't the only optical components company that has splashed its cash to build up its 100G capabilities in recent times. (See NeoPhotonics Closes Lapis Deal and Mellanox Buys Silicon Photonics for 100G.)
— Ray Le Maistre, Editor-in-Chief, Light Reading