Huawei has acquired UK photonic integration specialist, CIP Technologies, from the East of England Development Agency (EEDA) for an undisclosed fee. The acquisition gives the Chinese system vendor a wealth of optical component expertise and access to advanced European Union R&D projects.
"By acquiring CIP and integrating the company’s R&D team into Huawei’s own research team, Huawei’s optic R&D capabilities can be significantly enhanced," says Peter Wharton, CEO at the Centre for Integrated Photonics (CIP). CIP Technologies is the trading name of the Centre for Integrated Photonics.
Huawei now has six European R&D centres with the acquisition of CIP.
CIP Technologies has indium phosphide as well as planar lightwave circuit (PLC) technology which it uses as the basis for its HyBoard hybrid integration technology. HyBoard allows actives to be added to a silica-on-silicon motherboard to create complex integrated optical systems.
CIP has been using its photonic integration expertise to develop compact, more cost-competitive WDM-PON optical line terminal (OLT) and optical network unit (ONU) designs, including the development of an integrated transmitter array.
The company employs 50 staff, with 70% of its work coming from the telecom and datacom sectors. About a third of its revenues are from advanced products and two thirds from technical services.
The CEO of CIP says all current projects for its customers will be carried out as planned but CIP’s main research and development service will be focused on Huawei’s business priorities. “We expect all contracted projects to be completed and current customers are being assisted to find alternate sources of supply," says Wharton.
CIP is also part of several EU Seventh Framework programme R&D projects. These include BIANCHO, a project to reduce significantly the power consumption of optical components and systems, and 3CPO, which is developing colourless and coolerless optical components for low-power optical networks.
Huawei's acquisition will not affect CIP's continuing participation in such projects. "For EU framework and other collaborative R&D projects, the ultimate share ownership does not matter so long as it is a research organisation based in Europe, which CIP will continue to be," says Wharton.
CIP said it had interest from several potential acquirers but that the company favoured Huawei.
What this means
CIP has a rich heritage. It started as BT's fibre optics group. But during the optical boom of 1999-2000, BT shed its unit, a move also adopted by such system vendors as Nortel and Lucent.
The unit was acquired by Corning in 2000 but the acquisition did not prove a success and in 2002 the group faced closure before being rescued by the East of England Development Agency (EEDA).
CIP has always been an R&D organisation in character rather than a start-up. Now with Huawei's ambition, focus and deep pockets coupled with CIP's R&D prowess, the combination could prove highly successful if the acquisition is managed well.
Huawei's acquisition looks shrewd. Optical integration has been discussed for years but its time is finally arriving. The technologies of 40 Gigabit and 100 Gigabit is based on designs with optical functions in parallel; at 400 Gigabit the number of channels only increases.
Optical access will also benefit from photonic integration - from board optical sub-assemblies for GPON and EPON to WDM-PON to ultra dense WDM-PON. China is also the biggest fibre-to-the-x (FTTx) market by far.
A BT executive talking about the operator's 21CN mentioned how system vendors used to ask him repeatedly about Huawei. Huawei, in contrast, used to ask him about Infinera.
Huawei, like all the other systems vendors, has much to do to match Infinera's photonic integrated circuit expertise and experience. But the Chinese vendor's optical roadmap just got a whole lot stronger with the acquisition of CIP.
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