Jan 18 Jefferies & Co downgraded Finisar Corp's
stock, saying demand for the company's traditional
optical communication components could be hit by new
silicon-photonics products from Intel Corp and Cisco
Finisar shares fell 8 percent to $14.33 on Friday morning on
Intel said silicon-photonics technology for data centers
could soon be available commercially.
Intel's silicon products would be "bad news for
manufacturers of traditional, manually-assembled optical
transceivers for data centers, such as Finisar," analyst James
Kisner wrote in a note.
Integrating silicon photonics will allow for much higher
data transfers between processors and devices than is possible
with electronics-based optical components, translating into
lesser hardware requirement and lower building and operation
"While we suspect it will be a while before we see optical
transceivers from Intel, our checks suggest a number of players,
including Cisco, are likely to launch silicon
photonics-based transceivers for 100G applications in the data
center in 2013 and 2014," Kisner wrote.
Kisner downgraded Finisar's stock to "underperform" from
"hold" and nearly halved its price target to $7.50.