Enablence Gives 100G a Shot in China

Photonic integration technology from Enablence Technologies Inc. (Toronto: ENA) will be at the heart of 40Gbit/s and 100Gbit/s modules being made by a Chinese joint venture, the components company announced Monday morning.
The modules will use transmitter and receiver optical subassemblies (TOSAs, ROSAs) developed by Enablence.
The three-partner joint venture is being led by an unnamed Chinese supplier -- one with "annual revenues in excess of $100 million" that has China Mobile Ltd. (NYSE: CHL), China Telecom Corp. Ltd. (NYSE: CHA) and China Unicom Ltd. (NYSE: CHU) as customers, according to Enablence's press release.
Why this matters Admit it: The first name that popped in your head was Huawei Technologies Co. Ltd.
But it could be someone else. Enablence's other Chinese joint venture, Sunblence, is with an obscure (to U.S. ears) name: It supplies splitter chips for Sunsea Telecommunications' fiber access networks. And Huawei's annual revenues are a lot more than $100 million.
Regardless of who the partners are, what's interesting here is that another company sees potential in the 100Gbit/s module market, which is just starting the shift from in-house parts to merchant devices.
Module startup Acacia Communications Inc. has gotten into that market because of the importance of electronics to the OIF 100Gbit/s framework. Enablence, by contrast, is betting that photonic integration can be a key difference-maker.
Sort of in between those approaches, Cisco Systems Inc. (Nasdaq: CSCO) acquired silicon photonics startup Lightwire, a play for Cisco to develop its own modules.
The joint venture secures Enablence a customer, but that might not be enough to bring the company back to health. It recently sold off its PON systems business and its photodiode business, and its CEO and CFO left not long ago.
Monday's release mentions some financing details -- a $6 million private placement, a new line of credit -- but the fact remains that the company is a literal penny stock (closing at 1 cent per share Monday on the Vancouver Stock Exchange) with a market capitalization of less than $5 million.
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