When it comes to technology development, some of the leading analysts in the financial community have a tendency to blindly follow a template of conventional wisdom. One of the most egregious examples was during the bubble when there was the widespread notion that the need for bandwidth could not be satiated, and service providers were literally being punished for installing insufficient dark fiber. A similar injustice has occurred with Finisar with the imagined threat to the company by the introduction of silicon photonics.
These investment firms talk about the “checks” they conduct in drawing their conclusions. Well, how about spending approximately five minutes checking with an objective optical scientist? As we suggested in a recent blog article, it is clear that in general, development of silicon photonics for active components has for several decades been akin to placing a square peg into a round hole.
From the standpoint of an adequate supply chain or a sufficient production quality yield viewpoint, Si photonics is nowhere near ready for prime time. In addition, supposed competitive vendors, such as Intel, make announcements all of the time about new developments that cannot necessarily be taken at face value.
Perhaps it should be also be taken into consideration that Intel’s exit of the optical components space a few years ago does not necessarily put it in a superior position as it relates to the advancement of silicon photonics. In fact, after leaving that market, the company’s press releases have been more about partnerships with other players – an indication of its unwillingness to go it alone publicly on an uncertain path.
Concerning Finisar itself, it may have been better off sticking to its guns rather than putting itself in a defensive position by announcing a silicon solution at ECOC. Of course, it was for a 50G product, a rate, which has not been standardized, yet. More importantly, Cisco Systems made a statement on the press release, which is a strong indication of its heavy dependence on Finisar, as well as proof that the threat by the former with its CPAK has been widely exaggerated.
[written by Mark Lutkowitz]