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To: JakeStraw who wrote (18)9/12/2017 2:59:56 PM
From: FUBHO
   of 23
 
The people that write for the Fool have me SMH most of the time. I am not sure he got one technical issue correct in that article. The three biggies would be: Infinera's solution is a digital optical one which also uses DSPs, not an optical interconnect. Acacia's modules are not all silicon, but marry silicon photonics to a laser for reach. And the biggest, Infinera USES Acacia modules in their XTM II line of metro products.

He did spell the names of the companies correctly...

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From: FUBHO9/19/2017 11:27:27 AM
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Acacia Can Ride the Rise of Silicon Photonics, Says MKM

barrons.com


ByTiernan Ray
Updated Sept. 18, 2017 7:25 p.m. ET



MKM Partners networking analyst Michael Genovese this afternoon initiated coverage of fiber-optic component supplier Acacia Communications ( ACIA) with a Buy rating, and a $64 price target, writing that it is the "only optical components name we would recommend to long-term investors with a 3+ yr time horizon."

Acacia is poised, he believes, to replace the “digital signal processor,” or DSP, that various networking vendors develop “in house” for their equipment.

"In our view, Ciena is the only in-house DSP maker that can challenge Acacia for technological leadership over the long term,” writes Genovese, referring to fiber-optic networking giant Ciena ( CIEN).

Acacia’s pace of innovation will outstrip most of these other vendors, he writes:
Optical transceivers operating at 40+G speeds and 50+km distances require electronic DSP chips to overcome dispersion. Several of the large Optical systems vendors have in-house DSPs they refresh every 2+ years, with each new DSP costing $50mn-$75mn to develop. Acacia is the leading merchant DSP vendor. It sells six DSPs, and it introduces a new one every 12-18 months. Merchant solutions have ~1/3 of the DSP market share. We expect this share to grow over time driven by purchases from vendors that have in-house DSPs. Some of the larger systems players are looking to diversify DSP sourcing for application flexibility and because of the high cost and long development cycles for in-house DSPs. In case you were wondering who those system vendors are, they include Ciena and all its competitors, as Genovese outlines in a chart in the report:






Some of the things that have recently hampered the company are looking like they’ll improve, such as the slump in demand from China that has hit all the vendors, writes Genovese:
Acacia missed 1H17 expectations because of weak Chinese demand, lumpiness in its DCI opportunity and a contract manufacturer product quality issue that caused supply constraints. All of these factors are now improving […] Acacia is seeing improved order rates, compared to 1H17, from its large Chinese customer (ZTE) driven by inventory normalization and formerly delayed backbone expansion projects that are now moving ahead. It is also seeing improved order rates in the DCI market, particularly from a Tier 1 Hyperscale that it sells 400G modules to directly.

He likes the company’s lead in moving up to higher and higher speeds with its DSPs:
The company has a new 1.2Tbps DSP chip scheduled to be generally available in mid-2018. It is also the strong market leader in the emerging CFP2-DCO module category with over 15 customers. ACIA has roughly 1,000bps higher GMs than its peers due to selling DSP-ASICs and from Silicon Photonics. We think it merits a valuation premium to the group

(For more on Ciena’s efforts with its WaveLogic DSP chipset, see my recent interview with Ciena CEO Gary Smith.)

Genovese sees the silicon approach of Acacia winning out over the exotic materials such as indium phosphide used in most of fiber-optics component manufacture:
We believe the demand trends in Optical transceivers, including faster and faster speeds and smaller and smaller form factors, bode well for SiPh over time. Acacia views CMOS-based optics as key to lowering overall system design costs. Photonic integration reduces the number of discrete components and saves on packaging costs. Acacia’s transceivers do not need lenses, do not need to be hermetically sealed, and have especially compact waveguide designs. Wafer-level testing (testing chips while still on the silicon wafer) also helps save on costs. Over the long term, we believe SiPh is the best positioned technology to deliver compact, low- power, low-cost modules. As the technology continues to develop, SiPh should enable greater component integration densities over time. It also offers co-packaging opportunities with electronics such as DSP-ASICs, amplifiers, and drivers. All of this promises to reduce the power consumption and costs of coherent modules going forward. Some of the near-term impediments that need to be overcome are the lack of uniformity in design, processes, and techniques being used by today’s SiPh industry players. However, as volumes increase we expect to see more uniform tools and processes take center stage.

As far as estimates, Genovese sees Acacia making $417 million in revenue and $1.90 per share in the fiscal year ending this December, just slightly above consensus for $416 million and $1.87.

For 2018, he models $513 million and $2.59 per share, which is also higher than consensus for $416 million and $1.87 per share.

For a different take on silicon photonics, see my recent interview with Stefan Murry, the CFO of optical component vendor Applied Optoelectronics ( AAOI).

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From: FUBHO9/20/2017 9:30:07 PM
   of 23
 


Acacia Communications debuts 1.2-Tbps AC1200 coherent optical module

September 20, 2017
By Lightwave Staff



Acacia Communications (NASDAQ: ACIA) says it plans to begin sampling a 1.2-Tbps coherent optical module during the first half of next year. The AC1200 Coherent will leverage the company's Pico coherent DSP to transmit a pair of 600-Gbps wavelengths. It also will occupy a footprint 40% smaller than current 5x7-inch optical modules, the company asserts.

The AC1200 module will feature "continuous baud rate adjustment" to optimize spectrum use, a patented fractional QAM modulation capability designed to enable the selection of QAM constellations with what Acacia terms "very fine resolution," and enhanced software-defined forward error correction (SD-FEC). The coherent module also will support encryption and a variety of host interfaces.

Acacia says it will offer a software development kit for the coherent optical module as well.

The company expects the AC1200 to find use in a wide range of applications, including data center interconnect, metro, long-haul, and submarine networks. The company is positioning the AC1200 as an alternative to the 5x7-inch 400-Gbps optical modules Lumentum, NeoPhotonics, and Oclaro are developing using DSP technology from Ciena (see "Ciena to license WaveLogic Ai coherent DSP to optical module vendors").

Acacia also attracted commentary from a high-profile source for the announcement.

"Our growth is continually driving the need for better optical performance within the network. Technology that raises the bar with high baud rate integrated photonics and signal processing algorithms in a well-architected interconnect solution provide the high performance that is imperative," said Glenn Wellbrock, director of optical transport network architecture, design and planning, Verizon, via Acacia's press release.

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From: FUBHO10/1/2017 2:53:36 PM
   of 23
 
Last week of SHYSTER law firms polluting my portfolio news feeds with their bogus suits.

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From: FUBHO1/19/2018 8:37:02 AM
   of 23
 
New 5-Year Optical Component Plan from China’s MIIT spells trouble for foreign suppliers: Cignal AI


lightwaveonline.com


January 18, 2018
Author Stephen Hardy
Editorial Director and Associate Publisher
Market research firm Cignal AI reports that a 5-year plan from China's Ministry of Industry and Information Technology (MIIT) released last month calls for Chinese optical component developers to evolve from a focus on low-end products to high-end products for optical communications systems. Chinese systems houses such as Huawei and ZTE should aid this effort by favoring domestic suppliers, say the plan's authors. The effort could have a significant impact on the revenue streams of Western and Japanese optical component suppliers, says Cignal AI founder and chief analyst Andrew Schmitt. He estimates that incumbent Western component vendors could see their addressable market shrink by as much as 30%.

Schmitt acquired a copy of the plan, written in Chinese (naturally), and had it translated. He's posted copies of the original document and the translation on the Cignal AI site (subscription required). The document outlines six areas of focus within the new 5-year plan:

  1. Optical communication devices
  2. Optical fiber and cabling
  3. Specialty optical fibers
  4. Image and photosensors
  5. Solid-state (LED) lighting
  6. LCDs/OLEDs.

The plan's authors state that a lack of domestic supply of optical communications devices leaves control of this core technology in the hands of foreign entities and thus threatens the success of the nation's information technology initiatives. While companies such as Huawei and ZTE have achieved scale through success in foreign markets, their reliance on foreign component suppliers renders them "big but not strong," according to the plan.

The plan therefore calls for a combined effort to grow the number of Chinese component companies in the worldwide Top 10 from the current one to two or three by 2020 – and that one of those companies should shoulder its way into the Top 3. Overall, Chinese component companies should achieve a total market share of 30% by 2022, according to Cignal AI's translation of the plan.

This effort should include the development and production of high-end components and subsystems, the plan states. The document lists 23 areas of focus for component development, including:

  • 200G/400G/1T client-side optical transceivers
  • 100G/200G/400G CFP2-DCO coherent transceivers
  • 25G industrial temperature transceivers
  • Colorless/directionless/contentionless (CDC) ROADMs
  • Silicon photonics coherent transceivers and PAM4 silicon
  • Planar lightwave circuit (PLC)-based arrayed waveguide gratings (AWGs)
  • LiNbO3 modulators.


Overall, the plan calls for Chinese optical systems vendors and others to procure 60% of low-end (below 10 Gbps) and 20% of high-end optical components domestically by 2022. The plan calls for more development of domestic optoelectronic chip supply sources as part of this effort, as well as an emphasis by optical transport systems companies on nurturing and using domestic component suppliers.

The plan obviously isn't good news for incumbent component suppliers in Japan or the West, notes Schmitt. A greater number of Chinese component companies, striving to hit the worldwide market share targets outlined in the plan, could put further downward pressure on prices, he says in an article describing the plan and its ramifications.

One strategy to deal with the plan's fallout is further merger and acquisition activity among incumbent suppliers, Schmitt states. "In the face of this rising competition, the need for consolidation among Western vendors has never been greater," he writes. "The current disparate market structure is vulnerable to the entrance of well-funded Chinese component makers into the higher-end markets. But even consolidated markets such as WSS [wavelength-selective switch] components (two suppliers) will face pricing pressure from aggressive new entrants more focused on market share than profitability."

The release of the plan complements previous reports that Chinese systems houses were cultivating domestic supply sources last year (see "Chinese systems houses engaging with alternative component, subsystem sources: LightCounting").

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