Despite the traditional impairments of the Italian economy, the Milan area is gaining some visibility in the photonics business, and it is working to configure itself as a possible "Optics Valley" south of the Alps. Corning Inc. has closed the $3.6 billion acquisition of Optical Technology, a high-tech company formerly owned by Pirelli Cavi & Sistemi spa (90 percent) and Cisco Systems (10 percent). Optical Technology's laboratories are moving to a site on the outskirts of Milan, where new space is already available for future expansions. Besides Pirelli and Corning -- which is expected to maintain and expand its new local operations -- the recently established Cisco Photonics contributes to the creation of a lively environment for photonics innovation. Analysts expect other foreign companies to settle in the same zone, which offers easy access to top-grade academic research and specialized professional skills at a cost still acceptable to US investors. Photonics in Italy The acquisition gives Corning new research and manufacturing resources in ultrafast lithium niobate modulators, 980-nm amplifier pump lasers, add/drop filters, phase modulators and acousto-optic filters, which have proved useful in long-haul transmission systems and cross-connects. Corning paid $3.4 billion in cash for the business unit and has agreed to pay an additional $180 million after the firm achieves a certain number of business objectives. For Pirelli, the financial result will allow upgrades and expansions in other sectors of photonics, such as optical fibers and submarine telecom.