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To: Dealer who wrote (29624)	8/19/2000 8:29:36 AM
From: Dealer	Read Replies (1) \| Respond to of 35685

JDSU--JDSU was specifically recommended, on PBS' Wall Street Week, last night by Mary Farrell of PaineWebber. In fact, her two technology picks were JDSU and CSCO.

To: Dealer who wrote (29624)	8/19/2000 8:34:45 AM
From: Dealer	Respond to of 35685

JDSU-SDLI--SHOWWEI CHU Technology Reporter Saturday, August 19, 2000 Nortel Networks Corp. says it has told JDS Uniphase Corp. that it has concerns about the industry-shaking acquisition of JDS's biggest rival, even as the two companies look to strike a long-term supply agreement. Nortel chief executive officer John Roth has already expressed worries over the rapid consolidation in the fibre-optics component sector. But until yesterday his company had not singled out JDS and its proposed $41-billion (U.S.) stock bid for SDL Inc. Nortel spokesman Jeff Ferry said his company is talking to JDS and other firms about securing supply sources for its optical systems. The JDS discussions have touched on that company's latest takeover bid, he said. "We're also talking to them about our concerns relating to the proposed merger with SDL." But Mr. Ferry declined to outline the concerns and said that any supply agreement with JDS won't alter Nortel's plans to expand its own component production capacity. "We are investing in expanding our optical components production and our optical systems production in order to meet the explosive growing demand," he said. "That's part of the strategy." Nortel is JDS's No. 2 customer behind Lucent Technologies Inc. In the last fiscal year ended in June, Nortel accounted for 15 per cent of JDS's $1.4-billion in sales. If the JDS acquisition of SDL is approved, Nortel may not be able to buy components from one if the other runs out. Nortel's Mr. Roth first disclosed his concerns last month about the consolidation trend within the fibre-optics industry, saying it is prompting his company to expand its own production. Nortel, which recently held talks to acquire Corning Inc., another JDS rival, announced last month that it will spend $1.9-billion to expand its fibre-optics capacity. About $1.2-billion of that money will be geared toward components, with the remainder for systems. Without further details on the supply agreement, it's difficult to gauge whether the talks between Nortel and JDS will increase, decrease or just maintain their existing relationship. A JDS spokeswoman said it has a long-term contract with Nortel and it undergoes reviews occasionally. Kenneth Leon, a telecommunications analyst at ABN Amro, said there's little chance that JDS and Nortel will sever or seriously cut back their relationship, even if Nortel boosts its own production substantially. "I still think Nortel is intending to expand its capacity, but JDS is a very important supplier, so in some ways there's a chess game going on." He also said that Nortel may be trying to secure a bigger share of supply from JDS because it's now competing with more emerging network systems companies. "There are so many new optical networking companies going public and competing in the market," Mr. Leon said.