OFC: EFFECT Photonics acquires coherent DSP business from Viasat, increases funding

News and Business

EFFECT Photonics has signed a definitive agreement to acquire coherent optical DSP and forward error correction (FEC) technology as well as a highly experienced engineering team from global communications company, Viasat Inc. Viasat is a long-established player in DSP and FEC technologies, with eight generations of design IP. EFFECT Photonics has also secured an additional US$20 million in Series-C funding bringing the total to US$63 million. Additionally, pursuant to the DSP acquisition agreement, Viasat will be joining EFFECT Photonics’ supervisory board and hold a minority interest in the company.

EFFECT says the acquisition means the company will own the entire coherent technology stack of all optical functions, including a high-performance tuneable laser, together with DSP and FEC. This will enable the company to deliver on its ambition to make high performance coherent communications solutions widely accessible and affordable. It will also enable longer term economic and environmentally sustainable communications due to the ability to deliver high-end performance and reach within a small footprint and with lower power consumption.

This transaction is expected to mean that EFFECT Photonics will be able to optimise the complete solution for any application addressing both existing challenges and new possibilities. With full ownership of the key optical, DSP and FEC functions, EFFECT Photonics can offer seamless integration, cost efficiency and security of supply and EFFECT photonics will be an independent vendor able to offer a full portfolio of building blocks such as the tuneable laser and DSP, and/or complete solutions, increasing the choice reduced by recent mergers and acquisitions in the industry

James Regan, CEO of EFFECT Photonics said, “This is a significant step in accelerating our ambition to make coherent optical communications ubiquitous and further drive our product portfolio growth. We look forward to welcoming the team of highly skilled and experienced design architects and engineers who will be joining us to drive the development of energy efficient, high performance and affordable coherent solutions. With all the recent changes in the industry landscape, this means that EFFECT Photonics is the only independent vendor able to deliver both the active optical components and the DSP. This will offer the market more choice and the ability to source superior solutions.”

“Given the trend of the fibre optic communications industry towards consolidation to provide vertically integrated end-to-end solutions, we believe that combining Viasat’s assets and capabilities with the unique integrated photonics capabilities of EFFECT Photonics will create substantially more market opportunities and better products. By investing in this Netherlands-headquartered company, we will also further expand our presence in Europe and be able to partner with EFFECT to bring state-of-the-art integrated photonics to Viasat’s own customers,” commented Russell Fuerst, business area leader and vice president, Viasat.

Editorial comment: It is true that the deal will allow EFFECT to supply other players in the industry with both active optical components and DSP’s, countering the recent consolidation in the industry, but there is another side to the purchase of Viasat’s DSP technology. Having to source the active optics and DSPs from different sources can create significant supply chain problems, as explained by Robert Hughes CEO, Westbury Photonics, in the spring issue of Optical Connections. Having the complete stack in-house is a distinct advantage.

For more information, visit www.effectphotonics.com