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Optical components

JDSU Tunes In Agility

Agility Communications Inc.'s long and sometimes agonizing story is over, as JDS Uniphase Corp. (Nasdaq: JDSU; Toronto: JDU) today announced an agreement to acquire the tunable laser vendor.

Terms of the deal, which is expected to close before Dec. 31, were not disclosed. JDSU would pick up all 90 of Agility's employees at first, with layoffs coming, as Agility's California chip fab and Allentown, Pa., packaging facility would be shut down (see JDSU Buys Agility ).

Agility CEO Ron Nelson would become the head of a new Telecom Modules business unit inside JDSU. His purview would include Agility and all of JDSU's telecom transponders.

For seven years, Agility has waited for the tunable laser market to ignite, racking up more than $200 million in funding along the way. The latest round closed earlier this year (see Agility Snares Another $15M).

Agility and fellow tunables pioneer Iolon Inc. had on-and-off relationships with Light Reading's Top Ten Private Companies list. Both were considered prime acquisition candidates at first, but as the years wore on with little activity to show for it, both fell off the list.

They have spent the past few years facing down repeated questions about their futures, as rumors periodically cropped up about one or both being on the verge of collapse (see Iolon's Alright and Agility Is Alright, Too).

Today's announcement moved JDSU stock up 5 cents (3%) to $1.60.

For JDSU, the deal represents a chance to get into tunable lasers, now that the prospects for the technology are more realistic.

Tunable lasers were all the rage in 1999, as they were a newfangled technology that could lower the costs of DWDM. But the lasers were too expensive at first, and the telecom downturn dampened the need for DWDM deployments.

"The need for tunable lasers is clear -- for sparing, for reducing inventory of fixed lasers. That's always been true, but the hype of tunable lasers got ahead of its time," says John Harmon, an analyst with Needham & Co. "This was a gap in JDSU's product portfolio, so it makes sense."

JDSU wants to pack tunable lasers into small modules, of the SFP and XFP variety. Agility had been focusing its development on monolithic integration of indium phosphide (InP) components, the kind of techology that would lend itself to such small packages. That became the deciding factor in picking up Agility, says Enzo Signore, director of marketing for JDSU.

"The proven monolithic technology was one we felt could get us to XFP and SFP fastest," Signore says. The tunable laser camp faces increased competition these days. offers tunable lasers, and Bookham Inc. (Nasdaq: BKHM; London: BHM) has demonstrated tunable technology at conferences; meanwhile, startups Santur Corp. and Syntune AB are staying in the game with recent funding rounds. (See Intel Launches Tunable Laser, WWP Names Customer, Santur Raises $16.6M, and Syntune Raises €4.7M.)

Previously, JDSU took a glance at the tunable laser market through its acquisition of SDL. When it chose not to pursue one of SDL's laser projects, group manager Bardia Pezeshki departed to found Santur, which received "a modest investment" from JDSU at one point, says Gurinder Parhar, Santur's vice president of marketing.

JDSU ships a tunable transponder that uses Santur's laser, and that product would still be supported after the Agility acquisition, Signore says.

The optical components market is beginning to see some long-awaited consolidation, but the action has been among the smaller companies. Startups have joined forces, getting an infusion of cash from investors along the way (see ASIP, T-Networks Reach Apogee and Continuum, Polatis Join Forces).

And while JDSU has made a few acquisitions in the past year, the deals have been outside of telecom optics, mostly. Its biggest buy was in the related test-and-measurement arena, where it snapped up for $760 million (see JDSU Buys Into Testy Market).

— Craig Matsumoto, Senior Editor, Light Reading

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Pete Baldwin 12/5/2012 | 3:02:44 AM
re: JDSU Tunes In Agility Here's how the companies fared on LR's past Top 10 lists:

2000: Agility, No. 2
http://www.lightreading.com/do...

2001: Agility, No. 3 / Iolon, No. 4
http://www.lightreading.com/do...
http://www.lightreading.com/do...

2002: Agility, No. 9 / Iolon, No. 8
http://www.lightreading.com/do...
http://www.lightreading.com/do...

No further appearances.

In a perfect world, I guess we would have dropped Agility from the list back in 2001 and left them off until the July 2005 version.

Does this mean we'll be squeezing Iolon onto the current Top 10 list? Well... I wouldn't hold my breath.
michaelflorida 12/5/2012 | 3:02:39 AM
re: JDSU Tunes In Agility Here is the summary of my (little bit outdated) knowledge of widely tunable laser companies:

ADC: discontinued 10/2002
Agere: stopped widely tunable some years ago
Agilent: ?
Applied Optoelectronics - AOI: ?
Bandwidth9: discontinued 08/2004
BeamExpress: ?
Blue Sky Research: discontinued 09/2002
Bookham (former Nortel/CoreTek discontinued): still around with former Marconi development
Fiberspace: ?
Fitel: ?
Fujitsu: very quiet
GWS Photonics: ?
Intel: OK
Intune: Still around?
Iolon: Small, but alive.
JDS-Uniphase: Own design seemed not to work
Nettest: quiet for telecom application
NTT/NEL: ?
Picarro: ?
Pirelli: I would assume, they don't have a Telcordia qualified product yet
Princeton Optronics: ?
Santur: OK
Sparkolor: bankrupt, assets acquired by Intel Virtual Photonics (Australia): ?

Bottom line: Is there really only Santur, JDSU (Agility), and Intel left over?
Vent 12/5/2012 | 3:02:39 AM
re: JDSU Tunes In Agility It is interesting that JDSU has gone for a tunable laser based on an intergrated chip solution.
Rumours have always had it that Agility's Chip yield was terribile,the other Tunable chip maker of note Bookham also I believe had poor chip yields(in fact the tunable product is only now being releaunched at a trade show in china).
The other start up mentioned Syntune may be inteesting and I don't know what the Japanese are doing.
While the integrated chip products have advantages especially when a small XFP module is required the external cavity vendors appear to have the edge at the moment (market leader Santur, again rumours persist about Iolon and it has bennup for sale for some time). The external cavity solution means complicated packaging however which= cost. Other external cavity vendors Intel, the package also lools costly and Pirelli(are they still around)and also Princeton Optronics Are there any more ? LR perhaps it time to do a new survey.
It will be interesting the chip solution will pan out eventually but it will surely mean a lot more cash to be spent (agility 200M$ +JDSU sale price ++++ ???)


Vent
Creagh 12/5/2012 | 3:02:37 AM
re: JDSU Tunes In Agility The JDSU - Agility acquisition will clearly be very positive from the perspective of tunables being more cost competitive. More not less cost competition is required to accelerate their adoption on major scale, in all manner of systems not just in the telecoms market.

I think you missed a few tunable vendors - Mistsubishi, Avanex are both still active amongst others - quietly working away in the background. Also it should be noted that companies like Intune and a couple of others listed are operating at a higher value added level i.e. making practical use of these vendors Tunables for advanced systems in communications, metrology, sensing and security. Finally the inclusion of Fiberspace here seems odd.

Creagh
sylviasm 12/5/2012 | 3:02:37 AM
re: JDSU Tunes In Agility I wouldn't hold my breath for JDSU to drive down tunables prices. The prices of their components have been very far from competitive for a long time now.
JDunne 12/5/2012 | 3:02:37 AM
re: JDSU Tunes In Agility Intune Technologies has been around for 6 years and is growing steadily. Not sure if we belong in this list as we don't manufacture and tunable lasers - we integrate them into products.
Creagh 12/5/2012 | 3:02:36 AM
re: JDSU Tunes In Agility It will come ..there are some major pilot activities going on today that will mature quickly into major vol opportunities for Tunable vendors particularly for semiconductor laser type tunables. The end customers have weight and deal scale to enable JDSU and others to bring the cost per laser down to DFB levels.

Sparing is not the end game for these guys anymore.

Sorry we'll agree to disagree

Creagh
deauxfaux 12/5/2012 | 3:02:35 AM
re: JDSU Tunes In Agility Considering that this thing might have been sold for .25/1.00 I think that you've got the wrong top 10 list.

I've heard that Iolon gave its customers notice for last time buys.
ex-cisco guy 12/5/2012 | 3:02:31 AM
re: JDSU Tunes In Agility JDSU has very competitive pricing.

It is the rest of the market that has poor pricing. At least JDSU pricing lets them have positive margins. Everybody else is negative.

What is healthy about that? Long term it eliminates companies such as Avanex and Bookham and then long term only JDSU remains.
whyiswhy 12/5/2012 | 3:02:30 AM
re: JDSU Tunes In Agility JDSU pricing?

1) If you are deemed a strategic customer, you get strategic pricing...meaning as low as it needs to be to permanently kill any competition. OTOH, if you need them more than they need you, well guess what?

2) They seem to have a pretty regular diet of "one time writeoffs" to explain losses nearly equal to sales.

3) Wonder if there is a correlation between 1 and 2?

Hummmm...

-Why
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