Optical module bring billions of dollars for CEM

Posted on by FS.COM

Just mentioned in the the hot communications market, one of the most popular products – fiber optic transceiver. The contract manufacturers CEM are two shiny. According to industry watchers, CEM Once you’ve mastered the complex optical interconnect technology and related accessories manufacturing technology each year will be able to win billions of dollars in revenue. Observers say that, even if the optical fiber Internet technology is still in the development phase, but it will still be the fastest growing areas in the huge market in the communications industry.

“The market is very strong demand for cheap and high-quality fiber optic module.” Jon Peddie Associates analyst Jon

Peddie said. The fiber-optic module is mainly used in high-bandwidth telephone lines, Internet access and other communications-related applications. During transmission of the light signal by means of a series of devices to accomplish various functions, including the signal generator, the guide, separation, regeneration, amplification, loading, Synthesis, emission, reflection and re-directing. Merrill Lynch analyst Thomas B. Astle said. “We believe that optical technology is one of the fastest growing areas in the telecom market. Estimated that in 2002, the annual growth rate of the overall market will reach 40%,” he added.

Dataquest, said fiber optic transceivers reached $ 6 billion in sales revenue in 1999. Its analyst Stan Bruederly of that sales revenue will reach $ 7.6 billion this year, and will reach $ 12 billion by 2003.

This demand situation has made some OEM telecommunications and networking products as well as some components suppliers, began to transfer their production of fiber optic equipment to CEM technology. Nortel Networks, for example, last year, part of its own fiber optic outsourcing to SCI Systems, analysts have estimated annual revenues of $ 1.5 billion will bring SCI.

However, the SCI Corporation Nortel spokesman declined to answer whether the production of fiber-optic module, or just processing for the Canadian telecommunications giant light board. He just said: “part of our optical networking products have been outsourced processing.

Merrill Lynch analyst Jerry Labowitz said, another high-grade fiber-optic devices and fiber optic module manufacturer JDS Uniphase, are also being considered less complex fiber module production outsourcing to a CEM.

JDS Uniphase, a major cause of the rapid development of the internal core force of aggregation, the company’s Chief Financial Officer Anthony Muller said. Another reason is that CEM has been a year ago mastered more fiber module production technology.

“Technologies are relatively well-understood,” Anthony Muller said, “We are more concerned about the CEM is how do, how to train them harder and faster to meet the needs of the user.”

Engaged in the optical networking business, Alcatel, Ciena network, Corning, Lucent Technologies, NEC, and Sycamore Networks, Inc..

Lucent spokesman said the company does not intend to outsourcing fiber optic transceiver  production. The company recently announced that, in order to meet the growing market demand for high-speed optical communication network devices, the company will spend $ 40 million to expand its production capacity in Southern California.
“Some OEM to develop rely on the manufacture of fiber optic devices, and they do not want to do anything else.” Said Srivinas Rao, Solectron’s vice president of technology. The company is one of the world’s largest CEM.

For competitive reasons, some OEM suppliers require their outsourcing the processing partner not to disclose the level and types of the production of optical devices. This is the CEM as several well-known production of Jabil Circuit, SCI and Solectron its contracted fiber optic devices do not want to talk about. Jabil’s positive efforts to become a leader in the optical components market. We hope that the optical components market in significant growth in the coming period, Jabil, a spokesman said.

In the last year, CEM supplier Celestica and optical networking company Sycamore Networks signed a two-year-old contract. However, Celestica Company Chairman and Chief Executive Officer Eugene Polistuk unwilling to disclose the inside information processing for Sycamore. In addition to the production of optical devices, Celestica also two other factories to provide high-tech optical module welding services. “Polistuk said:” This is a whole new field, it has become a hot spot. ”

The fiber optic module is a part of the production process of the entire processing, said Solectron’s company Rao. “It’s just being a hot chase, but does not represent the entire market.” He added.
This market can be divided into three stages: the Wavelength Division Multiplexing (WDM) for WAN, LAN WDM MAN WDM.
“We are in the middle of the first stage, WAN WDM is the use of fiber-optic network constructed fiber optic cable infrastructure,” Merrill Lynch Astle said, “At this stage, including the rapid development of the submarine communication system, it will solve the intercontinental bandwidth bottleneck problem. ”

“The local WDM and Metro WDM market rise estimated for this year and next year, the main driving force is the ISP constantly want to build local area networks and metropolitan area networks using WDM technology,” Astle said, “We estimate that the arrival of the third stage of the between the years 2002-2004, when a full-mesh optical networks, and all light-based switching and routing. ”

CEM are already prepared for this. “We are in contact with a lot of companies,” said Chairman and CEO Michael Marks of Flextronics, “We do the processing of the light board, but does not provide light welding services. Now we are to strengthen our capacity in the optical networking and user contact . “

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