NEWS ANALYSIS
– was once considered niche, service providers now see the technology as a must-have for scaling future networks. Clearly Infinera’s dogged development twinned with industry insight – bypassing 40G and building OTN switching into architectures – has spawned sales, but Bennett also attributes success to the company’s unique structure.
“We are the only long-haul systems vendor that builds its own chips. We design and fabricate our InP PICs, we have our own fab in Sunnyvale and we integrate these PICs into our own system products,” he says. “We do not sell these chips to anyone and we have
Making waves: Telecoms providers across the world are turning to Infinera’s latest platform, based on InP-based PICs, to take communications further
complete control of our supply chain. We don’t have to pay any margin to a components company; we are completely vertically integrated.”
Bennett will not be drawn on where in the supply chain his company’s profitably lies; InP PICs are notoriously difficult and costly to fabricate while systems integration is relatively straightforward. But as he highlights: “Infinera took a huge risk in developing its own InP technology. That risk was venture capital funded and couldn’t have been funded in any other way... so it’s now good to see that risk being awarded by unprecedented market acceptance.”
“We were shipping for just one quarter and we jumped from zero [market-share] to market leader; that’s just astonishing,” he adds.
Critically, the company’s high risk InP technology is holding the cheaper, China- based competition – namely Huawei and ZTE – at bay, for now. Huawei is busy deploying its 100G WDM system across China, but Infinera still claims most 100G market share.
“Infinera is number one, Huawei is number two.
Geoff Bennett, Director Solutions & Technology, believes vertical integration is key to Infinera’s success
August / September 2013
www.compoundsemiconductor.net 21
ZTE and Huawei are winning market- share by undercutting the competition... so when we encounter our Chinese competitors we’ve got to work really hard to differentiate our product,” explains Bennett.
“We can do this with our 500G super cards and OTN switching but I fear for our western competitors,” he adds. “They are basically shipping the same stuff as Huawei and ZTE and that’s why they are not able to make money.”
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