Fiberoptics Industry Report

Jan. 1, 2001
Lucent names its microelectronics spinoff Agere Systems; KMI forecasts a $54-billion DWDM market; BU Photonics Center and Beacon Telco will partner with Verilink

Lucent names its microelectronics spinoff Agere Systems
Lucent Technologies is calling its latest spinoff company Agere Systems. Agere is the name of a Texas-based company that Lucent acquired earlier this year. The operation, which is the former Microelectronics Group of Lucent, manufactures silicon chips and optical components such as lasers in telecommunications applications. An initial public offering for up to 20% of the new company is expected to take place in the first calendar quarter of 2001. The remaining shares will be spun off in a tax-free distribution, with the total process being completed by next summer. Agere is the second business unit to be spun off by Lucent in its recent major restructuring. This fall, the company also spun off the firm Avaya Inc., which produces office telephone systems.

KMI forecasts a $54-billion DWDM market
Industry analyst KMI Corp. (Newport, RI) expects the dense wavelenght-division-multiplexing (DWDM) market to reach $54 billion by 2005, with a compound annual growth rate approaching 43%. This growth reflects the maturation of the long-distance segment of the DWDM equipment market, stiffening competition that will lead to price pressures, and the infiltration of shorter-distance products in the market. The short-distance segment of the market alone should exceed $9.6 billion and capture 18% of total market share. These projections fall on the heels of the 1999-2000 DWDM market boom, which saw the number of vendors offering system-level products more than doubling to beyond 30—despite the various acquisitions in the industry. The number of carriers deploying DWDM also climbed from 75 to 175 in the same period.

BU Photonics Center and Beacon Telco will partner with Verilink
The Photonics Center at Boston University (Boston, MA) and venture-capital development firm Beacon Telco (Boston) will tap into the projected $15.2-billion optical-networking-systems market through a stake in Verilink Corp. (Madison, AL). Beacon's claim is in the form of warrants for 15% of Verilink's common stock that will vest over time subject to acceleration based on development milestones and other parameters. Verilink, which provides business-to-business connectivity solutions, will establish a product development site at the Center's Business Incubator, focusing on cutting-edge optical access solutions in telecommunications applications. As part of the deal, Verilink will have access to the Center's $110 million infrastructure, including $25 million in equipment and a state-of-the-art fiberoptic draw tower in the university's Lightwave Technology Lab.

Corning to boost fiber capacity
The board of Corning Inc. (Corning, NY) has approved a plan to invest $450 million to further expand its Concord, NC-based optical-fiber manufacturing facility, which will reportedly make it the largest fiber plant in the world. Advanced funding also has been approved for preliminary engineering activities and site selection for a new US optical-fiber manufacturing facility. The firm's expansion programs will allow it to increase its fiber-manufacturing capacity at a rate of at least 25% per year through 2004.

Bookham Technology signs an epiwafer supply agreement with IQE
UK-based Bookham Technology, which designs and manufactures components that integrate optical processing functions on a single silicon chip, has signed a contract with epiwafer manufacturer IQE plc (Bethlehem, PA) for the provision of specialist epitaxy services. Bookham will initially subcontract time on IQE's epitaxy equipment and has entered into agreements to procure dedicated epitaxy production at IQE to meet rapidly growing wafer requirements.

Also in the news . . . (Kirkland, WA) has acquired the exclusive rights to the Optiguide laser fibers line from QLT Inc. (Vancouver, CA).... ADC (Minneapolis, MN) has become the first next-generation CMTS/router vendor to earn EuroDOCSIS qualification.

Paula Noaker Powell

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