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25 April 2012
 
EMCORE has reached an agreement to sell its VCSEL-based product lines to Sumitomo Electric Device Innovations USA (SEDU). The deal, valued at $17 million (€12.9 million) includes EMCORE’s parallel optical transceivers, active optical cables, and other VCSEL and photodiode components targeting applications in data centers and local area networks.
 
The assets to be sold include those that EMCORE acquired from Intel in 2008 – the move that got the company into datacom in the first place.  But the datacom market never became a major focus: In fiscal year 2011, the VCSEL-based product lines contributed just 5% of the company’s overall revenue, EMCORE says. 
 
"The decision to sell the VCSEL-based product lines is strategic and market driven," stated Dr. Hong Hou, EMCORE's chief executive officer. "Our product and technology portfolio is strongly aligned to support current and future requirements in tunable, coherent high-speed transmission systems and next-generation broadband architectures.”
 
He added: “The proceeds from the transaction significantly improve our balance sheet and the sale is expected to reduce the time to reach profitability. Along with the improved operating model, the transaction will benefit our customers as we focus our investment in telecom, broadband and specialty photonics products to remain industry leaders in those respective product lines in our fiber-optic business segment."
 
Telecom and broadband product lines remaining at EMCORE include tunable lasers and XFP modules, cable TV modules and transmitters, FTTx transceivers, indium-phosphide-based lasers, photodiodes, and modulators, video transport and specialty photonics products.
 
On the other side of the deal, SEDU anticipates that it will use the VCSEL product line to expand into a variety of computing and datacoms applications, including rack-to-rack, ganged serial links, logic-logic data links, board-to-board, and shelf-to-shelf requirements. SEDU also sees potential opportunities in consumer and automotive markets.
 
The deal is subject to certain closing conditions including US Government approval such as regulatory approval by the Committee on Foreign Investment in the United States (CFIUS). 
 
SEDU says it is planning continue the VCSEL fab operations in Albuquerque, NM, but consolidate the enterprise engineering team currently residing in Newark, CA, to its operations in San Jose.
 
By Pauline Rigby