News Article

OCP Director Resigns Over InP Fab Argument

Robert Shih resigns from the optoelectronics company after a "heated" disagreement with Oplink CEO Joe Liu over its future chip manufacturing strategy.

Optical Communication Products (OCP) director Robert Shih has resigned from the company after falling out with Joe Liu, the CEO of OCP s parent company Oplink Communications.

Shih, who was a VP of business development at Oplink, said in a resignation email to Liu that following a "heated discussion" over the future of the company s InP wafer fabrication facility, that the two would be unable to work together in the future.

The revelation appears to place a major question mark over the future of the InP facility.

In his scathing email, Shih wrote: "I firmly do not believe the decision you have made is to the best interest of Oplink/OCP in terms of its customers, employees, business outlook and financial [sic]."

"The decision may take the planned OCP revenue of $70 million in 2008 to $35 million run-rate at the end of 2008, with minimal profit [and] it will not have the critical mass to support research and development activities to develop products going forward."

OCP took on the InP wafer manufacturing facility, which is located in Taiwan, in 2006 through its acquisition of the chip manufacturer Gigacomm (see related stories).

Then, earlier this year, Oplink acquired OCP in what appeared to be a somewhat hostile take-over battle.

Oplink is now thought to favor a fabless manufacturing business model that is more appropriate for making commodity products in very high volumes.

Clearly, Shih - a former employee of fiber-optic component maker Finisar and compound semiconductor substrate firm AXT - disagreed with this philosophy and the value of the InP fab. However, the style of Liu s management and decision-making also seems to have been a major factor in his resignation.

"I have also discussed alternative plans with you [i.e. Liu] that offer less disruptive changes to customers, and create value from OCP s asset, rather than a destructive one."

"However, your decision-making process convinced me that we will not be able to work together in harmony going forward."

Shih continued: "It is best that you find an executive that can carry out your order at this early stage of the Oplink/OCP integration effort."

Whether Oplink is able to sell the former Gigacomm fab remains to be seen, although it would be fair to say that there is not a general clamor for InP wafer manufacturing capacity at present.

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