NT is about 20% of AMCC's business and shrinking quickly. From every indication I heard the OC-192 stuff is just flying, it is the older stuff that is having a slowdown.
In addition, if Nortel's problems are lack of competitive product, than that is not a real concern for AMCC. Because, if it is a high-end product, almost certainly the competing alternative is also using AMCC chips. Ciena, as an example, uses AMCC chips. So does Juniper. So if Cisco slips in routers, Juniper will make up for it, etc. AMCC is nearly the perfect proxy for high-end optical equipment, except growing somewhat faster.
That is the explanation I was looking for.
I had also vaguely remembered that AMCC was high end optical. Thanks for the information.
Looking to load up on Ciena, JNPR and AMCC, on general weakness if we are lucky enough to get it.
Also looking at JDSU, which makes optical components and has no exposure to other sectors. Their SDLI division (newly acquired) has long long lead times and is really the strength of the company.
I guess the news out of NT is that legacy systems are seeing big declines in spending, consistent with what the CEO of Ciena stated. |
