Lightwave summarizes the news that the US Dept. of Commerce has blocked all exports to ZTE in China.
However, Oclaro won’t be the only company to feel the bite of the Commerce Department’s ruling. According to Andrew Schmitt, founder of Cignal AI, sales to ZTE represent about 25% of coherent optical transceiver vendor Acacia Communications’ revenues. The loss of revenue could affect the company’s plans for an IPO (see “Acacia Communications IPO a referendum on optical subsystems space?”).
“The impact of this decision is very hard to predict, but in the near term it certainly is negative for Acacia’s IPO plans as ZTE was their largest customer in 2015,” says Schmitt.
The overall impact of the export ban remains unclear. “Critical demand from Chinese carriers can be soaked up by Huawei and Fiberhome in the absence of ZTE supply,” Schmitt says. “The key question is what impact this has on Chinese macro demand â€“ do customers wait for ZTE to return to the table or do they move forward with other vendors?”