Finisar could move Allen staff to Sherman by end of 2019

The Finisar Corp. production facility in Sherman could see the addition of 200 workers from the company’s Allen facility by the end of the year. During a …

The Finisar Corp. production facility in Sherman could see the addition of 200 workers from the company’s Allen facility by the end of the year.

During a ribbon cutting event for the local facility in July, Finisar CEO Michael Hurlston told the Herald Democrat he had informed staff in Allen that eventually their 160,000-square-foot facility will be shuttered and moved to the nearly 700,000-square-foot building in the former MEMC building on Sherman’s south side. Finisar Sherman General Manager and Vice President Jeff Brown said in December that could happen by the end of this year.

“We are planning to move the Allen operation to Sherman by the end of 2019 or beginning of 2020,” Brown said via email last month.

Hurlston previously stated Finisar plans to make Sherman the “VCSEL Capital of the World.” In July, Hurlston said the Sherman facility “has plenty of room to house” the equipment in the company’s Allen plant.

“What we’ll do is all the equipment from Allen that’s dedicated to our old optical networking business, we’ll keep dedicated to that and then all the equipment that’s here (in Sherman) that’s new — that’s called the six-inch production line — will be on these new consumer applications,” Hurlston said.

Finisar announced in December 2017, it would hire 500 new employees to expand its production of vertical-cavity surface-emitting lasers at its new Sherman facility to help meet Apple’s demand for the technology in its iPhone line. VCSELs are small semiconductor devices that emit light vertically and measure the depth at which that light is reflected. That depth-sensing technology helps power Apple product features such as facial recognition, portrait mode selfies and proximity-sensing capabilities.

In addition to the numerous smartphone applications, Finisar Executive Vice President and General Manager of 3-D Sensing Julie Eng previously said VCSELs could soon be put to use in new markets such as medical and manufacturing, to make vehicles safer for drivers and other motorists and even in vacuum cleaners and lawnmowers.

“We’re trying to go into these more consumer applications and without (the) Sherman (facility), we simply can’t do that,” Hurlston said in July. “What happens is our old business, which is the laser business and optical networking, typically you think of an order of hundreds of thousands of units in a month. The volumes are big, they’re substantial, but when you talk about these consumer applications, you’re talking millions of units even a week, so the numbers are wildly different. And in order to deliver that kind of scale, we need a factory like this — a bigger factory that can deliver that kind of capacity.”

Brown said in December the company has hired 250 employees and expects more will be added as the facility moves toward commercial production. The company shipped out its first samples in the fall. Brown said Finisar’s total investment in the Sherman facility is expected to be approaching $200 million by the end of 2019.

“The factory space in Sherman has been completed,” Brown said via email. “We are now focusing on adding office space and modernizing the existing office space. We expect to continue some level of construction through most of 2019.”

Acquisition

In November, it was announced Finisar is to be acquired by global manufacturer of engineered materials and optoelectronic components II-VI Incorporated in a deal worth about $3.2 billion. In a teleconference call held following the announcement, Hurlston said he believes the combined company will have substantial growth potential.

“By joining II-VI, I’m confident that we’ll be able to accelerate our growth in ways that neither of our teams could achieve as independent companies,” Hurlston said. “Further, we believe this transaction represents a compelling value composition for Finisar shareholders as it delivers immediate cash value while providing the opportunity to participate in the significant upside potential of our combined organizations once the transaction is completed.”

The definitive merger agreement, which has been approved by the boards of both companies, states II-VI will acquire Finisar in a cash and stock transaction that will see Finisar’s stockholders receiving, on a pro-rated basis, $15.60 per share in cash and 0.2218 shares of II-VI common stock.

Brown didn’t directly address any impact the potential acquisition by II-VI would have on the Sherman facility, but indicated VCSEL production will continue locally.

”As we have communicated to our employees, we continue to believe that Sherman is a world class facility and is expected to deliver high volume VCSEL output for years to come,” Brown said.

During the teleconference call, II-IV President and CEO Vincent D. Mattera Jr. said the merger will create a formidable photonics and compound semiconductor company.

“We believe that combining with Finisar will enable us to be even more effective as we accelerate the development of our portfolio of products in the emerging markets of 5G, 3D sensing, cloud computing, electric and autonomous vehicles and advanced microelectronics manufacturing,” Mattera said.

Mattera said the combined company plans to utilize its existing operations to the best of their capabilities. Once the transaction closes, Finisar and II-VI will have over 24,000 employees in 70 locations worldwide. Finisar Director of Corporate Communications Victoria McDonald said, in a prepared statement issued via email at the time of the announcement, the company expects the transaction to close in the middle of 2019, subject to approval by each company’s shareholders, antitrust regulatory approvals and other customary closing conditions.

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Finisar being purchased for $3.2B by II-VI Incorporated

Less than a year after moving into Sherman, Finisar Corp. is being acquired by a global manufacturer of engineered materials and optoelectronic …

Less than a year after moving into Sherman, Finisar Corp. is being acquired by a global manufacturer of engineered materials and optoelectronic components in a deal worth about $3.2 billion.

II-VI Incorporated and Finisar announced the acquisition in a recent joint-released press release. In a teleconference call held following the announcement, Finisar CEO Michael Hurlston said he believes the combined company would have substantial growth potential.

“By joining II-VI, I’m confident that we’ll be able to accelerate our growth in ways that neither of our teams could achieve as independent companies,” Hurlston said. “Further, we believe this transaction represents a compelling value composition for Finisar shareholders as it delivers immediate cash value while providing the opportunity to participate in the significant upside potential of our combined organizations once the transaction is completed.”

The definitive merger agreement, which has been approved by the boards of both companies, states II-VI will acquire Finisar in a cash and stock transaction that will see Finisar’s stockholders receiving, on a pro-rated basis, $15.60 per share in cash and 0.2218 shares of II-VI common stock.

II-IV President and CEO Vincent D. Mattera Jr. said the merger will create a formidable photonics and compound semiconductor company.

“We believe that combining with Finisar will enable us to be even more effective as we accelerate the development of our portfolio of products in the emerging markets of 5G, 3D sensing, cloud computing, electric and autonomous vehicles and advanced microelectronics manufacturing,” Mattera said. “Together we will be capable of serving the broad set of fast-growing markets of communications, consumer electronics, military, industrial processing lasers, automotive semiconductor equipment and life sciences.”

Finisar announced late last year that it would hire 500 new employees to expand its production of vertical-cavity surface-emitting lasers at its new Sherman facility this year to help meet Apple’s demand for the technology in its iPhone line of products. VCSELs are small semiconductor devices that emit light vertically and measure the depth at which that light is reflected. That depth-sensing technology helps power Apple product features such as facial recognition, portrait mode selfies and proximity-sensing capabilities.

II-VI develops innovative products industrial, optical communications, military, life sciences, semiconductor equipment and consumer market applications, and has a headquarters in Saxonburg, Pennsylvania.

“This merger should create substantial growth potential for the combined company,” Sherman Economic Development Corp. Executive Vice President Stacey Jones said via email. “With room to grow at our Finisar Sherman facility, this seems to be a great opportunity for Sherman.”

When Mattera was asked about his expectations of the evolution of the 3D sensing market after the transaction during the teleconference call, he said the combined company’s focus is on getting the manufacturing platform in place to be able to offer the marketplace differentiated products made on those platforms.

“Thinking about the product portfolio and the next generation of lasers and optics that will be required for the marketplace is where we’re going to spend more of our time as we get the manufacturing technology platforms in place,” Mattera said. “I think we’ve done a real good job of that in the United States, in our Warren, New Jersey facility and — as far as I can tell since I had an opportunity to visit the Sherman and Allen plants just in the last few weeks or so — I’m excited to see the efforts that are going on in Sherman and the hard work that the team are doing in Allen as well.”

The II-VI president and CEO also said the company plans to utilize its existing operations to the best of their capabilities. Once the transaction closes, Finisar and II-VI will have over 24,000 employees in 70 locations worldwide.

Finisar Director of Corporate Communications Victoria McDonald said, in a prepared statement issued via email, the company expects the transaction to close in the middle of 2019, subject to approval by each company’s shareholders, antitrust regulatory approvals and other customary closing conditions.

“Finisar is excited about our joint announcement to combine with II-VI,” McDonald said. “We have no other updates to provide at this time.”

Hurlston said II-VI has been a supplier to Finisar for quite some time, but declined to comment when asked about VCSEL production in Sherman.

“Unfortunately, we’re in our quiet period, so I don’t want to talk about our numbers and anything directionally with our business,” Hurlston said.

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‘We’re open for business’; Finisar cuts the ribbon on new Sherman plant

(KXII) – Tech company Finisar cut the ribbon Monday in their new building. Their arrival has already brought hundreds of jobs to Grayson County.

SHERMAN, Tex. (KXII) – Tech company Finisar cut the ribbon Monday in their new building. Their arrival has already brought hundreds of jobs to Grayson County.

“We’re super excited to be here,” said Finisar CEO Michael Hurlston.

Back in December, Apple announced it was investing nearly half a billion dollars in Finisar: a technology company who had recently announced it was moving into Sherman’s old MEMC building off US 75.

“It’s a huge step for us to go from a raw shell of a building to production in less than six months,” Hurlston said.

Hurlston said they’ve hired 500 people so far and only have a few more hires to make.

“We expect production in the next couple weeks,” he said, “And once we do, we actually operate 24 hours a day, around the clock.”

Finisar specializes in high tech lasers called VCSELS.

Apple likes the VCSELS because they power their Animjoi and Facial ID feature in the iPhone X.

But Finisar leaders say the VCSELS can be used for future applications like gesture recognition in cars– like sounding alarms if you leave a kid in a car or if you’re sleeping at the wheel–and even high powered smart glasses or virtual reality applications.

“Phone or automotive wise, these are huge in volume,” Hurlston said.

Local leaders said the company’s arrival has spurred new housing developments and brought in new people.

Congressman John Ratcliffe thinks it’s just the start of more things to come.

“With an iconic brand like Apple, people are gonna take notice of that,” said U.S. Congressman John Ratcliffe. “In the tech field, those kind accompanies look at why they should relocate to a county like Grayson.”

“It’s a very unique cooperation between Finisar and the local community and we really enjoy it,” Hurlston said. “We’ve only been here a few months, but its been such great support from community.”

The company is expected to start production of their lasers in the coming weeks.

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Finisar readies Sherman plant for VCSEL production

Optoelectronic component maker Finisar says that it is on target to begin production of vertical cavity surface-emitting lasers (VCSELs) at its giant new …

02 Jul 2018

Ribbon-cutting ceremony takes place next week; re-fitted Texas facility expected to be up and running by the end of the year.

Optoelectronic component maker Finisar says that it is on target to begin production of vertical cavity surface-emitting lasers (VCSELs) at its giant new facility in Sherman, Texas, by the end of 2018.

The site, previously owned by silicon semiconductor firm MEMC and solar panel maker SunEdison, was acquired by Finisar late last year and has been undergoing a major re-fit since December 2017.

California-headquartered Finisar says that it intends to make Sherman the “VCSEL capital of the world” once production does start in earnest. It is targeting applications in 3D facial recognition, augmented reality (AR), automotive in-cabin sensing, and even automotive lidar with the tiny devices.

Ribbon-cutting ceremony

July 9 will see an official ribbon-cutting ceremony take place at the facility, even though the full opening is not due for nearly six months.

Speakers from Finisar’s executive management team, including the company’s relatively recently appointed CEO Michael Hurlston, will take part in the event alongside local community leaders.

While Finisar has long-standing expertise in VCSEL production at its Allen facility, also in Texas, the new site – supported to a large extent with what amounts to an early purchase order placed by Apple – will enable a massive increase in capacity, and the production of devices on larger (6-inch diameter) wafers that should enhance yields and help to push down the price point of VCSEL technology.

Finisar is one of a handful of competitors developing state-of-the-art processes to improve the performance and increase the availability of VCSELs for anticipated new high-volume applications in consumer electronics and the automotive sector.

Others to have made hefty recent investments include US-based II-VI and Lumentum, as well as Philips Photonics in Europe. Austria-headquartered AMS is working on a major expansion in Singapore, while Osram recently acquired VCSEL specialist Vixar.

According to Finisar, the updated Sherman facility is currently certified as “clean room operational”, with the first production tooling already installed and qualified. The company has also hired nearly 200 employees, including the operations and support staff necessary to begin production.

That recruitment activity will be further stepped up later this year to support the anticipated ramp to high-volume production.

“Finisar is excited to unveil this new state-of-the-art facility which will expand critical production capacity of our VCSEL products needed to support customer requirements,” said Hurlston in a release announcing the July 9 ceremony. “We are also pleased to create hundreds of manufacturing jobs in the US and to hire talent from the local area as we work together to make Sherman the VCSEL Capital of the World.”

Fix costs weigh on margins

News of the expected ramp comes just a couple of weeks after Finisar posted what Hurlston described as “disappointing” quarterly financial results, affected by the timing of new smart phone introductions featuring VCSEL arrays for 3D sensing.

In the three months that ended April 29, the company delivered a $26.7 million loss as sales slipped nearly 7 per cent year-on-year to $310 million.

Hurlston partly blamed the fixed costs of the firm’s Allen, Texas, VCSEL facility for that loss – with the slack demand weighing on Finisar’s margins – but during a conference call with investors the CEO added:

“We expect to see an increase in demand for our VCSEL laser [arrays] for 3D sensing applications in the second fiscal quarter [which runs August-October], in connection with the expected timing of new product introductions by our customers. In addition, we have closed a number of design win for our VCSELs in consumer and automotive applications.”

Of the Sherman site, he added: “[We] still expect to be qualified and in production using 6-inch wafers by the end of the calendar year, which we expect to significantly increase our production capacity.”

While the vast majority of that forthcoming VCSEL demand is related to smart phone handset deployments, Hurlston said that device production for automotive applications would likely take place in 2019 and 2020.

“We’re definitely starting to see additional traction in the handset space, which is the highest volume opportunity,” the CEO added.

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Finisar reveals ‘disappointing’ financial results

Finisar a global technology leader for subsystems and components for fiber optic communications, has announced what new CEO Michael Hurlston …

19 Jun 2018

New CEO Hurlston unhappy with latest results, but expects revenues and margins to increase in next quarter.

Finisar a global technology leader for subsystems and components for fiber optic communications, has announced what new CEO Michael Hurlston called “disappointing financial results” for its fourth fiscal quarter and full fiscal year, ending April 29th.

In the latest quarter, sales of datacom products decreased from $266.1 million to $248.0 million, down (6.8%) compared to Q3, 2018, which the company said was “primarily due to a decline in revenues for our VCSEL laser arrays for 3D sensing applications”.

Sales of telecom products also decreased from $66.3 million to $62.1 million, by (6.4)%, compared to Q3 2018, which was “due to the full three-month impact of the annual telecom price reductions,” the company said.

”Considering our fourth quarter results, overall revenue for the fourth fiscal quarter was $310.1 million compared to $332.4 million in the third quarter,” Kurt Adzema, CFO, told the analysts’ conference.

“Our top 10 customers represented 61.1% of total revenues compared to 63.3% in the prior quarter. Non-GAAP gross margin was 24.7% compared to 28.6% in the third quarter. This was primarily due to the impact of the full three months of the telecom price reductions under absorption of fixed manufacturing expenses in our Allen, Texas, VCSEL laser fab and an increase in non-cash inventory reserves.”

Full year, 2018

Sales of products for datacom applications decreased by $12.8 million, or (1.2)%, compared to the preceding year, primarily due to lower demand from our Chinese OEM customers. And sales of products for telecom applications decreased by $120.0 million, or (29.5)%, compared to the preceding year primarily due to lower demand from our Chinese OEM customers.

CEO Hurlston, who only joined Finisar in January from Broadcom – boasting much experience in semiconductors – commented, “Fiscal fourth quarter revenues were in line with the mid-point of our guidance range, but the gross margin was lower than expected driven by under-absorption of fixed manufacturing expenses in our Allen Texas VCSEL laser fab and an increase in non-cash inventory reserves.

“While we are disappointed in last quarter’s results, we do expect both revenues and gross margins will increase in our fiscal first quarter. In addition, we have begun to make changes at Finisar that I believe will not only bring more focus to our product development efforts, but will lead to better execution and efficiency, allowing the company to reduce relative expense levels.”

Outlook

Finisar indicated that for the first quarter of fiscal 2019 it currently expects revenues in the range of $305 to $325 million, non-GAAP gross margin of approximately 26%-27%, non-GAAP operating margin of approximately 4-5%, and non-GAAP earnings per fully diluted share in the range of approximately $0.10 to $0.16.

Looking ahead, Hurlston told analysts, “While our fourth quarter financial performance was disappointing, I’m encouraged by our outlook for revenue growth and improved gross margins in the first fiscal quarter. We expect to see an increase in demand for our VCSEL laser arrays for 3D sensing applications in the second fiscal quarter in connection with the expected timing of new product introductions by our customers.”

“We have closed a number of design wins for our VCSELs in consumer and automotive applications. Our opportunity funnel continues to increase in areas beyond automotive and handsets. We continue to make progress with respect to uplift of the building and the ordering and receipt of capital equipment for our VCSEL laser fab in Sherman, Texas for 3D sensing applications and still expect to be qualified and in production using 6-inch wafers by the end of the calendar year, which will increase our production capacity.

In our core business, we’re seeing increased demand for ROADMs as India and China deploy more advanced networks. In our datacom transceiver business, we’re seeing increased unit volumes in the data center market, but this is being offset by continued AST [ph] pressure. We have a set of cost reductions in process to provide greater pricing flexibility.

Hurlston concluded, “On the horizon, we believe we are well positioned with the major 5G wireless OEMs on 25-gig and 100- gig data rates for both short and long reach applications. We also believe we’re well positioned for the 400 G transition starting in calendar year 2019.”

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