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New Optical Ecosystem at Jabil

July, 2016

After over 15 years of both optical component and system suppliers struggling to generate meaningful margins in the telecom and data communications market, it may be way past time to concede that there may never be much of a positive change in the future. Actually, the nature of DWDM itself right from the beginning and before the bubble burst around the turn of the century, promised the current state of affairs. While there are a number of generic strategic options available to the present players in the space, the example of Jabil Circuit, a global supply chain management company, partnering with Optelian and acquiring AOC Technologies may represent an effective type of new ecosystem that would be most beneficial not only for optics vendors, but for technology manufacturers across the board. In April, 1999,

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Singapore: GlobalFoundries/Coherent/Poet

January, 2017

As a delegate to the EPIC mission to Singapore, this writer was impressed by the entrepreneurial enthusiasm, work ethic, and exceptional hospitality of the people in the country. While I am hardly a fan in general of public-private partnerships or too much of an emphasis on technology development at universities in which the best engineers are not necessarily in the front lines of businesses, which are more inclined to push for technological R&D more pragmatically, the relatively small population of Singapore helps ensure that there is limited separation (as well as more direct cooperation) between the three major entities involved in optical development. The nation is also just about at top of the list in...

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Oclaro’s Limited Options?

July, 2017

Regular followers of our other blog were able to read the recent article, “Oclaro's Possible Mistake,” in which we stated: “While we have been very complimentary toward the Oclaro leadership, we believe it could have made an error in advertising [to financial analysts] that it would be open to selling the company….Now that everything appears to be set up as well as possible for a purchase, [such as relatively attractive margins and an impressive balance sheet], what does Oclaro tell the Street, if it does not get a reasonable bid, which we assume would be no lower than $2 billion?” Optimally, it would have been better to stay relatively quiet about its intentions, and have potential suitors make unsolicited offers. Although in fairness, Oclaro tried to walk any such

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ADVA/MRV: Another Ecosystem Break

July, 2017

      In the past, we have provided countless examples of the dominant ICPs demonstrating an unsatisfactory amount of concern for the long-term viability of the optical ecosystem. One of the most damaging practices has been the emphasis on OLS, which allow these customers to selectively pick and choose various piece-parts of different system vendors in order to achieve the lowest cost per bit possible in the aggregate, including less expense somewhat operationally, such as with the least amount of power usage. In our opinion, it is quite clear that ADVA Optical Networking

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Finisar: 3D-Sensing Opportunity in Context

March, 2017

As we pointed out in a recent blog post, Finisar’s potential for diversifying its VCSEL business into the smart phone business should not be characterized as “tremendous.” While the impact will certainly be noticeable, there should be ample competition from suppliers, such as Lumentum Holdings, Broadcom, II-VI, and perhaps one or more other players to cut down on its revenue potential. Assuming the relatively high level of competition, we estimate that additional sales per quarter for Finisar would be optimistically no more than $60 million, and we project only a few more points on total gross margin because of the large quantity of other products sold by the firm. One can easily bet that a company like Apple will want to maintain a good number of vendors in order to avoid any...

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