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To: Shaw who wrote (1381)	12/21/2000 9:16:10 AM
From: Gustaf	Read Replies (1) \| Respond to of 2293

Fujitsu May Buy Small U.S. Makers of Optical Network Parts Tokyo, Dec. 21 (Bloomberg) -- Fujitsu Ltd., Japan's biggest computer maker, said it may buy small U.S. companies with proprietary optical communications technology to help it compete against Nortel Networks Corp. in the U.S. market. ``We are always looking for collaboration, which includes purchasing small U.S. companies or forming joint ventures with big companies'' with technology for optical communications equipment and components, Fujitsu Executive Vice President Akio Moridera said. Revenue from optical cable networks is surging, especially in the U.S., where many households own personal computers and Internet traffic through modem or network connections is more widespread than through mobile phones. Fujitsu, now in seventh place, wants to become at least the No. 2 company in the U.S. after market-leader Nortel. ``Acquiring technology is necessary to build customers,'' said Yoshihide Ohtake, an analyst at Tsubasa Research Institute Ltd., who rates Fujitsu ``average.'' ``Fujitsu wants to take steps to reduce Nortel's dominance.'' WDM Systems Fujitsu aims to raise its share of the U.S. market for Wavelength Division Multiplexing optical network systems from 3 percent to about 23 percent by 2003, Moridera said. That would place it No. 2 behind Nortel, which has 57 percent of the market, according to researcher RHK Inc. WDM networks transmit data faster than those with conventional Sonet technology. That's because WDM technology enables the transmission of several wavelengths of light through one optical fiber cable simultaneously, thus allowing more information to transmit over the same cable. U.S. sales of WDM optical cable networks will rise 51 percent each year to $26.6 billion by 2004, from $7.7 billion this year, according to RHK. The U.S. accounts for 76 percent of global WDM equipment sales this year, and the ratio will fall to 68 percent in 2004, according to RHK. Fujitsu holds a 23 percent share of the U.S. Sonet optical network equipment market, the second-largest share behind Nortel's 42 percent, according to RHK. NEC Ahead Fujitsu's communication equipment business lost money in the six months ended Sept. 30 because the company delayed its entry into the WDM business, losing potential customers who want more powerful machines. The business accounted for 15 percent of Fujitsu's group sales in the period. Domestic rival NEC Corp. is ahead of Fujitsu in the fiber optical communication equipment business. NEC this year has 9 percent of the U.S. WDM market, making it the second-biggest after Nortel. Also, NEC said in July it is spending 600 billion yen to acquire venture companies in the U.S. and Japan that offer the latest technology in optical network systems, microchip design and related areas. NEC and Hitachi Ltd., Japan's largest electronics maker, in October agreed to jointly develop fiber optic network systems. The duo said they aim to team up for production and sales in the future quote.bloomberg.com