Optical components

Light Peak Puffs Up Enablence

Enablence Technologies Inc. (Toronto: ENA) shares have climbed 65 percent in two days, but some investors might be overestimating the Intel Corp. (Nasdaq: INTC) win that apparently spurred this outburst.

Enablence reported on Wednesday that its photodiodes have been chosen for use in Intel's Light Peak modules -- the 10-Gbit/s optical interconnect for PCs. Light Peak is intended to be a universal replacement for USB, Firewire, and other interconnects.

Here's the interesting part. Analyst Daniel Kim of Paradigm Capital Inc. , one of the firms that underwrote Enablence's IPO, wrote in a report issued today that Enablence's "contribution to Light Peak will amount to approximately $10-12 per PC."

Enablence's shares had already risen about 26 percent the day after the Intel announcement. But today, possibly on the strength of Kim's report, Enablence climbed another 18 cents (55 percent) to 51 cents per share. That's a 96 percent gain in two days.

But is $10 to $12 per PC realistic? Light Reading ran that figure past some experts and got the phone equivalent of a funny look.

"I don't know about anything double digits" inside a Light Peak module, says Richard Doherty, an analyst with The Envisioneering Group and a longtime follower of Intel. "These speeds don't require one-photon sensitivity photodiodes, or the kind of x-ray photodiodes NASA uses."

One source familiar with optical components pricing puts photodetectors, even 10-Gbit/s ones, at between 50 cents and $1. "And if you're going to see volume, the price is going to come down."

Neither source thinks Intel needs a high-end photodetector for Light Peak. Moreover, if it's a commodity photodetector that Enablence is providing, then the company is likely to face long-term competition from bigger, higher-volume competitors.

Intel wouldn't comment when asked about the likely price of a Light Peak module, but given that it's meant for PCs, it can't be very high. Or, to put it another way: If Enablence's piece alone is going to cost Intel $10, that bodes ill for the total cost of Light Peak.

"I think their goal was to be in the low tens of dollars and to have that drop over time. USB 1.0 started in the low tens of dollars," Doherty says.

Even 50 cents per PC could be a good haul for Enablence. Kim estimates 112 million desktop PCs will get sold in 2010 -- based on the 337 million total PCs that Gartner expects will ship. But not every PC is built with Intel inside (blasphemy, we know) and it's probable that not every PC will have Light Peak. Moreover, Light Peak, which hasn't begun shipping, won't reach real volumes until 2011.

Given all the question marks, Kim's report doesn't give a specific estimate for how much the Intel deal is worth to Enablence. He didn't change his forecast, which calls for Enablence to see revenues of $45.2 million this year, $64.9 million in 2010, and $104 million in 2011.

Enablence officials and Kim couldn't immediately be reached for comment.

— Craig Matsumoto, West Coast Editor, Light Reading

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madoff_sr 12/5/2012 | 4:45:17 PM
re: Light Peak Puffs Up Enablence lol, unbelievable garbage continues. Madoff_jr had the future in past posts.
Stevery 12/5/2012 | 3:51:42 PM
re: Light Peak Puffs Up Enablence

Shares of Enablence are soaring on news that a dinky photodiode can be worth $10 to $12. Really?

You had an negative impact on the stock. So you should be sued.

Larry Joe 12/5/2012 | 3:51:41 PM
re: Light Peak Puffs Up Enablence

... if it's ever going to be used on a high volume PC or server.

Intel is not actually manufacturing/assembling Light Peak are they? From their website, it says "Intel is planning to supply the controller chip, and is working with other component manufacturers to deliver all the Light Peak components..." Investors should ask JDSU, or Avago, or Finisar, or Foxconn or whoever else is building these modules if they are planning to use Enablence (Albis) photodiodes in their products that will be sold to Dell, Sony, Apple, HP, etc.

Another question: is Intel driving an existing industry standards body to define the details (pinout, optical specs, etc.), or just do it themselves?

Larry Joe




danp5648 12/5/2012 | 3:51:40 PM
re: Light Peak Puffs Up Enablence

  Since when did you ever cover small cap stock movements on the Canadian venture exchange? And if its about the strange price movements  (which did only happen at the end of today 4 pm) how can you also be working on it if light peak didn't peak your interests? At what point did the work begin and why? Also your "sources" should include people who where short Enablence or at least knowledgeable in stock trading not just technology relayed "sources"...

   I am not convinced you just happen to be keeping an eye on E but maybe they stood out on some ranking system and then you did some backtracking. Kim might have over done it which caused the shorts to run like crazy but if you ever had to cover a short position I think you would have I better understanding. I would also look at level 2 trading to see who the players are and see if if they are just playing around with the stock. Normally price surges don't last multiple days plus Friday is a great day to walk away with profits in hand so I have no idea why the shares didn't fall and I have no idea what is going to happen on Monday..  I have shares in the lower 20's so I was thinking about getting out...  

I also wonder if first hand sources have ever answered the phone or answered a single question and if they never do why do you keep calling?

danp5648 12/5/2012 | 3:51:40 PM
re: Light Peak Puffs Up Enablence

This news happened three days ago ... who tip you off?? In-the-dark-reading. Also on the 1st was the enablence 3rd contract annoucement selection by TUTOR expected to connect the first 5,000 customers within the next year and 65,000 subscribers in the region in the next 10 years. The other  Light Peak suppliers are FOCI and Oclaro. Oclaro will make the VCSEL Laser and FOCI well something else.


Pete Baldwin 12/5/2012 | 3:51:40 PM
re: Light Peak Puffs Up Enablence

No, this news happened today.  It's not about Light Peak (which doesn't interest me much) but about the runup in ENA's stock (which does).  Is the deal worth another 55% of a jump?  I'm not convinced.

I know you like to think you tipped us off, Dan, but I was working on the story already when you posted that previous message.

danp5648 12/5/2012 | 3:51:38 PM
re: Light Peak Puffs Up Enablence

Foci Fiber Optic is making the cables

Foci in its discussion did provide insight as to the design of early cables. As glass fiber optic cables are normally brittle, companies were originally expected to use plastic fiber. However, its performance was poor enough for Foci that it instead used a particularly flexible variety of glass fiber treated for extra resistance. The result has the speed needed to sustain Light Peak's 10Gbps but can be coiled as tightly as an inch in diameter." and ..

Light Peak can do more than just connect your hard drives up--it could well serve as the cable to connect a PC to a display, and even to your broadband router, since it's got plenty of bandwidth. As a result, you could end up with fewer different cable standards to worry about (USB, VGA, HDMI, audio, Cat 5, and so on) and thus less cabling mess. It's possible that a single Light Peak cable could actually connect up every one of your peripherals.

danp5648 12/5/2012 | 3:51:37 PM
re: Light Peak Puffs Up Enablence <h3 class="GenericStory_Message">Enablence Technologies Inc. up +150% in three days. I am rich bitches!</h3>
olsen 12/5/2012 | 3:51:19 PM
re: Light Peak Puffs Up Enablence

Today this figure made the WSJ, courtesy of another analyst (read: ENA shareholder). Craigh, please twist Chhatbars arm (or at least pry his mouth open) so that the correct number can surface. This $10 photodiode sounds like a bad joke.

Polder 12/5/2012 | 3:51:18 PM
re: Light Peak Puffs Up Enablence

Danp5648, thanks for the vulgar gloating.&nbsp; I can only hope you sold at .70 cents now that it is trading back down around .40 cents.&nbsp; I would strongly urge you to look at their latest financials and calculate the burn rate against cash in hand.&nbsp; Ask not for whom the bell tolls but a review of the finances does not create a pretty picture.&nbsp; I would also recommend you look at the announced wins at places like Tutor.&nbsp; While it is a nice win, 5000 ONT's over a year means they have to have staff capable of installing 96 ONT's per week.&nbsp; Lets then&nbsp;pretend that the ONT's were sold for $200 USD each, that is only $1M USD in revenue.&nbsp; Compare that revenue to their burn rate.&nbsp; I would highly doubt you are accumulating stock at the "bargain" price of .40 cents.

You should be hoarding your money for the Calix IPO.&nbsp; I wouldn't put lipstick on that pig either...

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