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3S Photonics unfazed by Avanex tunable woes

The tunable wavelength laser business has become overcrowded according to the French InP fab, as its former owner Avanex closes a center working in this market.

Optical communications equipment vendor Avanex will shed 47 employees before the end of October as it rationalizes its tunable transponder and transceiver operations.

The company will close its Melbourne, Florida, center of excellence for 10 Gbit/s tunable products, cutting 8 percent of the total workforce it claimed at the end of June.

Although this does indicate some challenging market conditions, 3S Photonics "“ the company established from Avanex s former InP chip manufacturing facility "“ surprisingly says the move won't affect its sales.

Yannick Bailly, 3S vice-president of marketing, told compoundsemiconductor.net that Avanex now only contributes less than 8 percent of his company s sales. The Nozay, France-based fab does not produce tunable laser diodes like those that Avanex s Melbourne operation integrates into transponders and transceivers.

“Santur and JDSU made good business in the past, but now the market is overcrowded,” Bailly said. “Margins are very low when compared with the high level of investment needed.”

Instead of tunable products, 3S is developing photonic integrated circuit (PIC) technology and high-power linear transmission lasers. This builds on the company s expertise in submarine pump lasers, a niche that Bailly says is comparatively immune to economic worries felt by US companies.

“Our main customers are based in Asia and thus we are much less affected by the US market turndown.“

Avanex has had a tough year so far, with the company losing CEO Jo Major and CFO Marla Sanchez in July. However, a contract dispute between Avanex and 3S Photonics is now resolved, and the two companies are planning new business opportunities, according to Bailly.

After its closure, the Melbourne site s fixed assets will be transferred to Avanex s 40 Gbit/s tunable transponder operation in Villebon Sur Yvette, France, or its Shanghai, China, product engineering center.

Avanex s executive officers have also voluntarily taken a 10 percent pay cut as part of the company's cost-reduction activities.

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