Investors betting that the race to boost capacity on already-lit optical fiber networks will continue have placed a big-time wager on a Hitachi spin-off that is developing a 40-gigabit-per-second transmission module.
"Service provider networks are not lighting up new fibers," says Harry Bosco, president and CEO of OpNext. "When you look at the industry and take it apart, the active piece is the one part thats staying pretty decent."
OpNext, an Eatontown, N.J., maker of laser diodes, transmitters and receivers, recently closed on a $321 million round of financing from Clarity Group — a partnership of Los Angeles venture capital firm Clarity Partners and Marubeni Group, a Japanese trading house. Bosco is a special venture partner of Clarity Partners, and former Optical Networking Group president of Lucent Technologies.
When OpNext was teased out of the Fiber Optic Components Business Unit of Hitachis Telecommunications & Information Infrastructure Systems Group last September, Clarity Partners said that it would invest up to $450 million in the venture.
Hitachi had been selling parts internally, doing about $100 million in annual sales. But Clarity Partners saw more potential in the $7.5 billion active optical components market. "Hitachis been in lasers for a long time. Theyve had 10G [10 Gbps] technology since the late 70s," Bosco says. "We thought, if you pull out the active optical, create a company and influx the cash to grow it, youve got a great opportunity to get value out of the issue."
OpNexts catalog includes a full range of laser diode modules used to translate and transmit fat streams of data across long-haul and metro fiber networks, including 10-Gbps Ethernet gear. Researchers, including a team in Thousand Oaks, Calif., are plugging away at next-generation technology, and OpNext expects to debut a 40-Gbps transceiver module sometime in 2002. "The real business for that probably wont occur for two years," Bosco says, "but you have to keep driving that base."
OpNexts customer roster numbers about 25, including Alcatel, Cisco Systems, Lucent, NEC and Sycamore Networks.
"Were small starting off; we have good funding and a good technology base," Bosco says. "Its just managing through this storm."