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Optical components

OFC: Optics & IPOs

ANAHEIM, Calif. – The optical recovery hasn't brought sweeping new product categories back to OFC/NFOEC yet, but at least the business side of the business is back.

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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Pete Baldwin 12/5/2012 | 4:02:21 AM
re: OFC: Optics & IPOs Any other favorite candidates for IPO potential? Fabrinet got mentioned here and there, but I don't know what Tom Mitchell's thoughts are there. (Separate thread: When are the other CMs going to step up and compete more with Fabrinet? They all seemed hot on optical a couple years ago.)

CyOptics is an interesting possibility considering they used to be TriQuint/Agere/Lucent, but I doubt they're ready just yet.

Others?
optical 12/5/2012 | 4:02:19 AM
re: OFC: Optics & IPOs With the mention of Lambda Optical, could this mean that optical switches in the network are finally going to happen? What other companies are left out there in this space? Interested in hearing thoughts on these questions.
Pete Baldwin 12/5/2012 | 4:02:18 AM
re: OFC: Optics & IPOs With the mention of Lambda Optical, could this mean that optical switches in the network are finally going to happen?

Could be, although it seems too early. There's also a question that comes with any technology idea that lingers too long: Has the world found a cheaper/easier way to do what it was supposed to do? (Infinera, although they DON'T do core routing, would probably nod yes.)

Lambda OS's CEO, Irfan Ali, says the company is in trials with KDDI and is getting tested with Telecom Italia (they did a showcase together at Supercomm last year). And they're talking to everybody else (KT, e.g.) but that's the usual story, right? -- whether any money comes out of it all, we'll see.
redface 12/5/2012 | 4:02:18 AM
re: OFC: Optics & IPOs Photop is another IPO possibility. They have been profitable for at least a year.

Talking about OFC 2006, looks like the exhibitor number is down 13%, from 650 to 565. Booth sizes are smaller too. For example, Newport used to have gigantic booth. This year, they split it into several tiny booths. As a result of many companies downsizing their booths and the smaller number of exhibitors, the floor was much more empty than last year. I did not see any company giving away anything more expensive than very cheap pens. There are many more Chinese exhibitors this year than last year.
bw 12/5/2012 | 4:02:17 AM
re: OFC: Optics & IPOs Talking about profitability for Photon, THAT"S BEFORE NeoPhotonics merged with them. You should go to ask what's break-even plan post-Merger...As they now have to feed expensive head counts in Silicon valley now...

bw
redface 12/5/2012 | 4:02:17 AM
re: OFC: Optics & IPOs I doubt that Lambda actually makes switches. They probably buy switches made by Calient or Glimmerglass.
Pete Baldwin 12/5/2012 | 4:02:17 AM
re: OFC: Optics & IPOs redface -- excellent point about the lack of giveaways. I forgot to mention that.

They did feed the press, though -- good stuff, at that. I seem to recall them doing that last year too, but the fancy dessert was new, wasn't it? (a guy making bananas foster or something similar; i didn't try it).

That's not trivial -- when things are in the dumps, press room frills get tossed aside.

http://www.lightreading.com/do...
Pete Baldwin 12/5/2012 | 4:02:16 AM
re: OFC: Optics & IPOs bw -- I think he was talking about Photop, not Photon. Different company.

http://www.photoptech.com/new0...
Pete Baldwin 12/5/2012 | 4:02:16 AM
re: OFC: Optics & IPOs I doubt that Lambda actually makes switches. They probably buy switches made by Calient or Glimmerglass.

Yes, Lambda uses switches made by Glimmerglass.
bw 12/5/2012 | 4:02:16 AM
re: OFC: Optics & IPOs Talking about profitability for Photon, THAT"S BEFORE NeoPhotonics merged with them. You should go to ask what's break-even plan post-Merger...As they now have to feed expensive head counts in Silicon valley now...

bw
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