Ciena buys TeraXion InP Modulator Assets for $32M

Ciena applies for membership to the exclusive Indium Phosphide club.

Active Insight
Ciena is increasing vertical integration by moving additional component expertise in house. Unlike Infinera, Ciena will not have an InP fab. Others, such as Huawei, have also invested in this area but not deployed solutions commercially.

TeraXion is best known as a provider of dispersion compensation components and benefitted from a surge in 40G WDM, only to see demand ebb as 100G coherent technology reduced demand for these components. The assets that Ciena acquired are InP and silicon photonics (SiPhx) design assets (no fab), and include assets from Cogo Optronics, acquired in 2013 (link).

Cogo was working on standalone InP based optical modulators, a technology which cuts the cost of 100G for shorter reach deployments. These standalone modulators are now in the process of being overshadowed by the more integrated technology used in CFP2-ACO.

TeraXion pursued SiPhx components as well – but overall they did not meet with great commercial success in the modulator market. Ciena is currently a big customer of Lumentum for modulator technology and we’re not aware that TeraXion was in production systems at Ciena.

The announcement at the TeraXion site (link) provides much more color and indicates that Ciena will have an R&D facility in Quebec City and will integrate this technology into existing systems. Ciena indicates this builds on an existing relationship they had with TeraXion, and that they plan to shutter external sales of these components – though we can’t determine where they were used in material volume.