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Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: PAL who wrote (6913)	2/29/2000 1:18:00 PM
From: Lee	Respond to of 24042

Paul,..Re:.today's ibd front page. a nice write-up on jdsu. Date :02/29/2000 Author : Copyright :Investor?s Business Daily Title :IT?S NOT EASY BEING JDS UNIPHASE - Firms, Large And Small, Rely On Fiber-Optic Gear Maker By Jonah Keri Never mind those wild fluctuations in the stock market. JDS Uniphase Corp. has a job to do. The race to keep up with screaming demand in the fiber-optic marketplace is the telecommunications industry's World Series - and JDS Uniphase is the cleanup hitter. So next week, the company's rolling out no less than 30 new switches, modules and other electronic gear designed to move sound and pictures quickly along communications networks. The company says it will be able to quadruple today's top fiber-optic speeds with this slate of new products. "We have made extensive investments in new product development to serve the rapidly changing needs of our customers," said Jozef Straus, co-chairman, president and chief operating officer of JDS Uniphase. "In the first six months of fiscal 2000 we invested almost $40 million in new product development." Pressure From Customers JDS Uniphase is right where it wants to be: atop the heap of fiber-optic component makers. But just as the star slugger must come through in the clutch for his team, so must JDS Uniphase deliver under enormous pressure from its customers. Clients like Lucent Technologies Inc. and Nortel Networks Corp. still do their own fiber-optic work. But they can't keep up with demand. Regional phone firms, competitive local exchange carriers, Internet providers and cable companies in booming economies all are crying out for fiber-optic networks that can support heavy traffic on the Internet. Developing countries such as India and China are getting telephone and Internet service for the first time in many areas, driving demand sky-high there too. "There's a big time-to-market pressure for all of these companies," said Arun Verrappan, analyst for Robertson Stephens. Handing Over Business That's why systems builders such as Lucent and Nortel have outsourced a large portion of their optical gear business to JDS Uniphase; 36% of its $281.7 million sales last quarter came from those two industry leaders. JDS Uniphase faces the same challenge that Lucent, Nortel and the rest must deal with: a big capacity constraint in optical gear production. To combat that problem, JDS Uniphase landed two big fish. The company's $2.8 billion purchase of Optical Coating Laboratory Inc. in November solidified a long-standing relationship between the two firms. For years, Optical Coating made filters for JDS Uniphase as part of a joint venture. The outright purchase bolstered JDS Uniphase's line of products that manipulate fiber-optic signals, while also adding manufacturing capacity. Last month, JDS Uniphase upped the ante, shelling out $15 billion in stock to acquire E-Tek Dynamics Inc. In E-Tek, the company found another leading maker of fiber-optic components, filters and other products. But once again, JDS Uniphase did more than add to its stable of products. Got Major Competitor "The three major players in the optical component marketplace were JDS Uniphase, E-Tek and (SDL Inc.), so they acquired a major competitor in E-Tek," Verrappan said. "But the main thing is, it adds capacity to JDSU's (factory) space." JDS Uniphase should strengthen its relationship with long-standing customers such as Nortel and Alcatel Alsthom SA since E-Tek also had ties with those systems firms. But the two deals will not be enough to meet the insatiable fiber-optic demand. To close the gap, JDS Uniphase is hiring 100 new employees a week for its plants in Ottawa, said Anthony R. Muller, chief financial officer and senior vice president. The company also is expanding existing factories and building new facilities in Canada and at its U.S. headquarters in San Jose, Calif. Insiders predict major industry moves. Systems builders such as Lucent and Nortel, already under huge capacity pressure, are trying to focus on core businesses, especially with demand for new Internet-ready networks running rampant. investors.com