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Technology Stocks : Oclaro, Inc. (Avanex-Bookham)
OCLR 8.2600.0%Dec 10 4:00 PM EST

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To: Andy Yamaguchi who wrote (323)3/17/2000 2:17:00 AM
From: Andy Yamaguchi  Read Replies (4) of 2293
 
What is AVNX'S OPTICAL PROCESSOR? It is actually an Optical Dispersion Compensation Device. Most people like LU and NT do not call it OPTICAL PROCESSOR. But AVNX's got a good name. Why do we need this "OPTICAL PROCESSOR"? I try to explain it technically here:

Most existing fibers are old fiber which has a zero dispersion at around 1300 nm(wavelength). However, current DWDM and optical networking system are moving to 1550 nm region. At 1550 nm region, the old fiber has a dispersion effect on the optical signal. What is the dispersion effect? This is said that the transmit velocity for different wavelength is differently for the optical signal. As a result, the shape of the signal would be changed after as the signal transfer from one location to another location. This distortion of signal due to the dispersion would greatly reduce signal to noise ratio of the optical system. They also increase the pulse width-pulse widerning. As the data rate increase, this dispersion problem would be more and more important. How to solve this problem, one solution is to compensate this dispersion. For example, most people would add a compensator with a negative dispersion slop at the receiver side. The negative dispersion slop compensator would cancel the dispersion because the dispersion for old fiber are in positive slop. Another method is to use zero dispersion fiber which Corning has developed. Recently Corning is shipping zero dispersion fiber for 1550 nm application. It is significant because the new GLW fiber does not need AVNX's optical processor and it is also much cheaper comparing to using optical processor.
That is why I think that AVNX's optical processor might be loosing momentum soon as the new fiber became cheaper and cheaper and more and more carriers are deploying GLW's new zero-dispersion fiber as indicated by GLW's announcement today.

LU and NT all have dispersion compensators integrated with their receivers. However, AVNX claimed that their optical processor is the only one the market. Actually, an independent "PROCESSOR" is a bad choice, technically. The best way to compensate the dispersion is to place the dispersion compensator at the receiver. The trend is to integrate the compensator(the processor) with the receiver as LU and NT did. AVNX does not have receiver technology so that it would be difficult for them to integrate their processor with a receiver effectively. That is also a draw back for AVNX's product. Although AVNX can always work with OEM to integrate their processor with each OEM one by one, but it would not be a cost effective way.

In short, since GLW announced that significant order increase for their new zero-dispersion fiber, Corner also announced the negative dispersion slop fiber compensator,these products are much cheaper than AVNX's OPTICAL PROCESSOR. GLW's new products are all fiber and have no mechanical parts. It is much reliable comparing to AVNX's OPTICAL PROCESSOR. I guess that demand for AVNX's dispersion compensator(optical processor) is going to vanished eventually.

BTW, AVNX's optical processor has not pass BELLCORE test yet. There is a long way to go to be qualified by OEMs.

Next time, you may want to know why AVNX has yield problem-for their DWDM prodcution now while CORNING/ETEK/JDSU do not have. Is it a design problem?!
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