Sunblence - Our First Chinese Joint Venture

The Company continues to support the efforts of its joint venture with SUNSEA Telecommunications Co. Ltd. Sunblence, the joint venture, positions Enablence to capitalize on the significant opportunities presented by the Chinese market for optical splitter components required for very high-speed telecommunications equipment.

Sunblence has begun production of splitter chips, with the initial focus being the 1X8 configuration. Sunblence achieved $148 of customer revenues for the quarter ended September 30, 2012 (Enablence’s 49% share of that amounts to $72), and improved its manufacturing yield significantly during the quarter. Sunblence also achieved initial production of 1x16 and 1x32 splitter chips. Sunblence’s staff are focused on refining its production processes and working with Enablence staff to improve its yields. Management continues to expect the joint venture to create significant shareholder value in the future as it grows its production and shipments and improves yields. Sunblence revenues are expected to rise significantly in 2013 and 2014.

 

Our Second Chinese Joint Venture

Three partners, including Enablence, have established the Second Chinese JV to develop, manufacture and sell 40G/100G communication modules based on Enablence's PLC-based photonic integrated circuit technology. This will allow Enablence to participate as a minority partner, holding a 22% ownership interest, in the Second Chinese JV’s efforts to become a 6 leading vendor for 40G/100G communication modules. The modules will be made by the Second Chinese JV with PLC-based PIC TOSA/ROSA sub-assemblies supplied by Enablence. The TOSA/ROSA products and the advanced PIC chips are part of an array of Enablence products that have been developed to address the 40G/100G market in parallel with the global market migration to these standards over the next several years. The joint venture will benefit Enablence by providing the Company with a market for its some of its TOSA/ROSA products.