Masthead Corporate Logo
Subscribe > e-Newsletter   > Magazines  
Search  Advanced

The Lightwave Blog

Subscribe to an RSS Feed of this Blog.
<< Home

Posted by Stephen Hardy

While researching an article I'm doing for our July issue on the current funding environment, I've been talking to VCs about whether their community's ongoing lack of enthusiasm for the optical communications space (when it comes to photonics, it's all about green technology, photovoltaics, and sold-state lighting these days, they say) and the hostile IPO environment might finally drive consolidation, particularly in the components and subsystems space. It might, they say -- but some wonder whether the sector will see as much benefit as we've all assumed.

That's because most of the observers whose opinions on consolidation we hear about are focused on Western companies. Yes, moves such as the Finisar/Optium merger should be good for the industry. Indeed, other well-known companies will be looking to M&A; to increase their scale or broaden their product lines, taking smaller companies off the board.

But while the number of Western companies may start shrinking, the number of companies in the East, particularly in China and India, continues to grow. They're looking to be the next Fiberxon or Opnext, I'm hearing.

The trend may mean that the total number of companies in components and subsystems may not change much at all in the short term -- and the new entrants will be focusing on low-cost approaches that may continue to put margin pressure on the entire sector.

One VC described the phenomenon quite apply, I thought: "Scary."


Blogger Poor Publisher said...
You are correct in putting the east is fastly growing in FTTH and related accessories. Did you purposely missed the developed countries in East like Japan, Taiwan, Singapore, Korea etc? They are faster than US and many western Europe.
I used to blog at along with my friends.
Wednesday, July 16, 2008 11:03:00 AM EDT  

Blogger Light Wave Blog said...
Poor Publisher: I highlighted India and China because those were the two countries cited in discussions with my sources. (One brought them up, the other subsequently offered commentary on the first source's point.) You're right that new companies are springing up throughout Asia that might escape the attention of observers too focused on the West. Stephen
Wednesday, July 16, 2008 1:47:00 PM EDT  

<< Home

The Lightwave editorial staff uses The Lightwave Blog to share their thoughts on optical communications and whatever else might be the current topic of conversation from cubicle to cubicle. Feel free to add your own opinions.

Stephen Hardy is editorial director and associate publisher of Lightwave, which makes him responsible for the editorial aspects of the Lightwave franchise. A technology journalist since 1982, he once had his job duties described as "gets paid to tick off advertisers ".

Meghan Fuller is senior editor of Lightwave. She has degrees from Franklin & Marshall College in Lancaster, PA, and the University of Delaware and is a card-carrying member of Red Sox Nation.