JDSU continues acquisition strategy
JDS Uniphase continues to demonstrate that it prefers an aggressive market strategy, both in the commercial laser sector and in the optical telecom space.
SAN JOSE, CA - JDS Uniphase continues to demonstrate that it prefers an aggressive market strategy, both in the commercial laser sector and in the optical telecom space. The company has entered into a definitive agreement to acquire Agility Communications (Santa Barbara, CA), a provider of widely tunable laser solutions for the optical network. According to the company, the acquisition establishes JDSU as a major player in the rapidly growing market for tunable lasers and transponders, and positions the company with one of the broadest end-to-end agile optical network portfolios in the marketplace. Terms of the all-stock acquisition, which is expected to close in December, were not disclosed.
Agility Communications is privately held with approximately 90 employees and several top-tier customers for its tunable transmitters and transponder products, including Siemens, Marconi, Mahi Networks, Tropic Networks, and ECI. Agility currently has manufacturing capabilities in Allentown, PA; JDSU plans to transfer this manufacturing to its China facility and its chip fab in San Jose, turning Agility’s Santa Barbara facility into an R&D center. Ron Nelson, CEO of Agility, will become vice president and general manager of a new business unit within JDSU that will be responsible for the telecom modules business.
“We believe the shift to tunables is inevitable and that the transition will be rapid,” said Mike Ricci, vice president of JDS Uniphase’s Component and Modules Group. “Agility’s single chip monolithic platform is capable of addressing the entire market and is not limited to a single form factor. Agility’s proven architecture, coupled with JDS Uniphase’s scalable manufacturing capability, paves the way for high volume, tunable, pluggable solutions.”
There are several potential benefits inherent in Agility’s monolithic platform. Unlike alternative architectures, Agility offers the only proven architecture capable of fully integrating a tunable laser with a modulator via a highly scalable semiconductor wafer process. Agility also provides the only currently accepted platform that can enable tunable 2.5 Gb/s SFP and 10 Gb/s XFP form factors. Migration to pluggable solutions is expected to enable vendors to enjoy significant reductions in power dissipation, footprint and provisioning costs. The platform also offers switching speeds of less than 10 milliseconds, and is less sensitive to shock and vibration than other solutions, thus enabling deployment of robust, agile optical networks.
“What is happening in the telecom market, on the optical transport side, is that the cost of provisioning these networks is still high,” said Enzo Signore, vice president of corporate marketing at JDSU. “With tunable technologies, you can have a universal transponder that can be tuned at any wavelength and operated from a single console to manage an entire network. And this eliminates errors and reduces costs.”
The acquisition of Agility is also important on a macro level, in that it represents JDSU’s ongoing commitment to the optical telecom market, according to Signore. He notes that this market has seen steady growth for the last several quarters, particularly in some key niches.
“DWDM transponders is the market that would first benefit from this technology, and that is a $400 million market, according to RHK,” Signore said. “And within this market, tunability is becoming mandatory. The growth rate of tunability in this market is expected to be 50% over the next few years, and this is one of the reasons we are excited to be participating in this part of the market.”
In addition, the optical communications market-currently about a $2.5 billion market-grew 20% last year and has continued to sustain 5%-10% growth over the last several quarters, he added.
“While this is not stellar, under the covers you can see there are many segments that are growing at a very fast clip, such as tunability and ROADMs (reconfigurable optical add/drop multiplexers),” Signore said. “So by having a product portfolio strategy that targets investment in high growth markets, we are pruning some of the products we had in the past to simplify our portfolio and focus our R&D resources on where the market will be in the near and far future.”
This deal is the fourth major acquisition for JDSU in the past year, the others being Lightwave, Acterna, and Photonic Power. According to Signore, while the Lightwave and Agility acquisitions were similar in style and strategy-designed to expand the company’s existing portfolio of products and fortify its next-generation products-the Acterna deal differed in that it took JDSU in a new direction: test and measurement. The Photonic Power purchase did both, creating new opportunities for JDSU with existing communications customers while also broadening the company’s reach into previously untapped industrial markets.
“The Acterna purchase is another element of our agile optical network strategy: to help our customers create and deploy optical networks that provide a next-generation set of scalability, reconfigurabiliy, and robustness at the optical level, vs. the electronic level,” he said. “By adding test and measurement capabilities we can now provide our OEMs and service providers with the ability to detect and correct problems very quickly, in addition to all the other ingredients that an OEM or service provider needs to deploy an agile optical network.”
- Kathy Kincade