News

2 November 2006

 

OCP subcontracts to SAE China for high-volume manufacturing

Fiber-optic component manufacturer Optical Communication Products Inc has reached an agreement for vertically integrated contract manufacturer SAE Magnetics (H.K.) Ltd, a subsidiary of TDK Corp, to manufacture some of its product lines in China, starting in summer 2007.

"Our partnership with SAE enhances our ability to serve our customers by dramatically expanding our manufacturing capacity," said Otto. "With the acquisition of GigaComm [of Hsinchu, Taiwan] in August 2006, we entered Japan, the world's most advanced telecommunications market, and took a leading position in the fiber-to-the-home optical components market. Now, we plan to move into high-volume production in China to augment our proven capabilities in short-run, specialized applications," he adds. "Manufacturing in Asia will enable us to increase our manufacturing capacity and flexibility, while simultaneously reducing costs.

SAE has a workforce of over 30,000 occupying 2.5 million square feet of manufacturing space, mainly in the Dongguan area of the Pearl River Delta. OCP will maintain its existing manufacturing facilities at its headquarters in Woodland Hills, CA, USA and its former GigaComm facility in Taiwan, but will reduce their staffing levels by 150-180 and 70-80. "We will continue to fulfill low-volume, fast-delivery requirements from our facilities in the US," explained CEO Philip F. Otto."We should see little change in our operations in either the US or Taiwan for many months, so there will be more than enough time for us to prepare for this new phase," said Otto. "We expect to retain many qualified employees in both the United States and Taiwan who will continue to develop the various new products demanded."

In connection with the staff cuts, OCP expects to incur one-time transition charges of $3-3.5m in its fiscal 2007 (started 1 October 2006).

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