Emcore Selling VCSEL Assets for $17M
ALBUQUERQUE, N.M., and SAN JOSE, Calif., March 28, 2012 — Emcore Corp., a provider of compound semiconductor-based components and subsystems for the fiber optics and solar power markets, announced Wednesday that it will sell its vertical-cavity surface-emitting lasers (VCSEL) and VCSEL-enabled transceiver technology to optical and wireless communications products maker Sumitomo Electric Device Innovations USA Inc. for $17 million in cash.
The VCSEL is the preferred light source for data transmission in short-distance links, interconnects for data center and local networks (LANs, SANS, etc.). The VCSEL-based module products are designed to enable next-generation data interconnect capabilities for service providers and OEMs. Applications include rack-to-rack, ganged serial links, logic-logic data links, board-to-board and shelf-to-shelf configurations. In addition, the portfolio will offer solutions for 10 GbE, 40 GbE, 100 GbE parallel optic modules and active optical cables, and future developments will target consumer and automotive markets as well, Sumitomo Electric Device (SEDU) said.
The VCSEL product lines contributed about 5 percent of overall revenue in fiscal 2011, Emcore said, adding that it will retain its telecom and broadband fiber optics products, which include tunable lasers, tunable XFPs, cable TV modules and transmitters, FTTx transceivers, indium phosphide (InP)-based lasers, photodiodes, and modulators, video transport and specialty photonics products.
"The decision to sell the VCSEL-based product lines is strategic and market driven," said Emcore CEO Dr. Hong Hou. "Our product and technology portfolio is strongly aligned to support current and future requirements in tunable, coherent high-speed transmission systems and next-generation broadband architectures. The proceeds from the transaction significantly improve our balance sheet, and the sale is expected to reduce the time to reaching profitability. Along with the improved operating model, the transaction will benefit our customers as we focus our investment in telecom, broadband and specialty photonics products to remain industry leaders in those respective product lines in our fiber optic business segment."
SEDU said it plans to continue the VCSEL fab operations in Albuquerque and to consolidate the Enterprise engineering team currently in Newark, Calif., to its nearby operations in San Jose. On or prior to the closing, SEDU said it will sign transition service agreements with Emcore to ensure a smooth business transition.
The deal is expected to close soon after receiving regulatory approval.
For more information, visit: www.emcore.com or www.sei-device.com