OFC: Optics & IPOs
The show remains relatively small, with 565 exhibitors this year, but the mood was worlds apart from the last few years. (See Smiles Abound at OFC/NFOEC.) More companies talked of being profitable, and a bigger count of analysts and investment bankers seemed to be prowling the floor. Their trip out here was rewarded by a stock spike just before the show, giving everyone plenty to talk about. (See Optical Stocks Climb Again.)
That includes talk of IPOs. Transceiver vendor Opnext Inc. (Nasdaq: OPXT), last year's favorite to go public, might have disappointed by staying quiet. Plenty of other candidates appear to be in the wings, though.
"I count, at the component level, five or six [private companies] that are well over $10 million a quarter," said Richard Craig, CEO of Santur Corp. , speaking at the The Optical Society (OSA) (OSA) Executive Forum 2006 the day before OFC/NFOEC. "Two or three of those companies are already starting to talk IPO. You'll probably see it late this year or early next year."
Craig wouldn't make any picks, but he noted that a certain unnamed tunable laser company saw revenues jump 400 percent each of the last two years. (Did we mention Santur makes tunable lasers?)
Santur isn't leading the IPO buzz, though. Most sources at the show pegged Opnext or Optium Corp. (Nasdaq: OPTM) as the most likely candidates; neither company openly verified any plans, naturally. Opnext, a Hitachi Ltd. (NYSE: HIT; Paris: PHA) spinoff, was said to exceed $100 million in revenues last year. Optium Corp. (Nasdaq: OPTM) has quietly built a solid business with 10-Gbit/s transceivers and just this month made the move into reconfigurable optical add/drop multiplexers (ROADMs) with the acquisition of Engana Pty. Ltd. (See Optium to Acquire Engana.)
Further down the list was Fiberxon Inc. , a company, based mostly in China, with its eye on a Silicon Valley-like IPO. (See Fiberxon Mulls IPO.) Chief executive Li Hsu says Fiberxon has been profitable for 12 quarters in a row, with revenues hitting $39 million in 2005.
On the product side of OFC/NFOEC, the recovery isn't old enough for crazy new ideas to come forth yet, although Lambda OpticalSystems Corp. is reviving talk of the 256x256 all-optical switch. (See Lambda Optical intros OXC.)
Overall, this year's product parade looked a lot like last year's, maybe with smaller sizes and improved specs. Here's a look at some of the hot topics of discussion.
40 gig. Yes, again
Are you tired of this one yet? Vendors are continuing to report progress in OC768/STM256 networking -- 40-Gbit/s links -- becoming a real market. Sort of.
"There's interest, but let's be realistic -- it's not hundreds of millions of dollars. You're talking $10 million, maybe, in the next year and a half," says Todd Swanson, vice president of marketing for Finisar Corp. (Nasdaq: FNSR).
Nearly all the 40-Gbit/s work being done is in very short-reach links, connecting routers or switches to each other inside a data center, but the technology is seeping into the network. Lucent Technologies Inc. (NYSE: LU) announced (at CeBIT, technically) a field trial with Japan Telecom Co. Ltd. and says it's got two 40-Gbit/s contracts signed, although neither customer is ready to deploy the technology yet. (Lucent officials would neither confirm nor deny whether Japan Telecom is one of the two.) (See Lucent Spews CeBIT News.)
Bigger numbers are on the horizon. CyOptics Inc. is developing 80-Gbit/s links for a Cray supercomputing project. And Lucent reported it's run 100-Gbit/s Ethernet in the lab using 40-Gbit/s components and duobinary modulation.
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