Week of June 5, 2000
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Opto-Omnivorousness: Lucent Adding
2,500 Worldwide Jobs, Cisco May Add 12,000 in RTP

Surging demand in the global optoelectronics market is prodding omnivorous expansion appetites among the sector's major players.

The latest evidence comes from Lucent Technologies (www.lucent.com), which has just announced that it will add some 2,500 new jobs in the next few months.

Only a few days later, Cisco Systems (www.cisco.com) acquired a huge tract in North Carolina's Research Triangle Park (RTP at www.rtp.org). Cisco thus far has only specified that it will add 2,000 employees at RTP over the next two years. But the new acreage could eventually house a work force of 12,000 employees.

What's spurring such major expansions is the heavyweight impact of the Internet's explosive growth on optoelectronics components. System providers are scrambling to meet the snowballing demand for next-generation Internet services. Optoelectronics components, which are tiny semiconductor-based devices, produce and receive light signals that carry voice and data traffic across fiber-optic networks.

That demand surge pushed 1999's market for fiber-optic communications components to US$5.5 billion -- 40 percent-plus growth from 1998, say industry analysts.

450 of Lucent's New Jobs
Headed for Southern California

Lucent's optoelectronics business is growing at an even a more torrid clip, increasing by more than 80 percent in 1999.

Of the 2,500 new jobs that Lucent is adding to meet that demand, 450 have a clear-cut destination: Lucent's operations in Southern California that manufacture optical-network components.

The Southern California jobs will be part of Alhambra, Calif.-based Ortel Corp., a leading developer of optoelectronics components for cable TV networks that Lucent acquired only a few weeks ago for $2.95 billion.

The expansion will includes construction of a new facility in Irwindale and renovations to existing manufacturing operations in Alhambra and Irwindale. The Southern California announcement came just after Lucent completed a $30 million expansion of its automated optoelectronics components facility in Breinigsville, Pa. The Pennsylvania expansion is expected to quadruple that operation's output and create more than 500 new jobs.

Lucent's $40 million capital investment in Southern California will have an even more dramatic productivity impact. Lucent officials say the West Coast expansion will produce a 16-fold increase in the output of its Southern California factories.

"Demand for optoelectronics components, especially those that enable access to the Internet, has grown tremendously in the last few years," Jeff Rittichier, general manager of access products in the optoelectronics components division of Lucent's Microelectronics Group explained.

"The upgrades to our Alhambra facility and the expansion into Irwindale will help us bring those types of products to a capacity-constrained market faster through new and improved equipment and processes, including flexible production schedules, automated manufacturing capabilities, and reduced cycle times," Rittichier added.

2,000-Plus New Lucent Jobs
Ticketed for EMEA Region

On the same day the Southern California announcement was made, Murray Hill, N.J.-based Lucent announced an even bigger job generator at a conference in Madrid, Spain, which it had organized for members of the media.

The company announced that it will hire more than 2,000 people for its regional operations in Europe, the Middle East and Africa (EMEA).

The new hires come online very rapidly -- over the next six months, company officials say. To facilitate that speed in its hiring binge in the EMEA region, Lucent will utilize mksearch.com, an Internet recruiting firm.

Lucent's burgeoning business in the EMEA region is fueling its hiring speed. In 1999, Lucent's business in Europe alone grew by nearly 50 percent. By the end of year 2000, Lucent officials say the company will have bulked up to some 20,000 EMEA -region employees, some 13 percent of its total worldwide employees.

Eric van Amerongen, Lucent's chief executive officer and president for the EMEA region, noted at the announcement, "Europe is one of the hottest communications markets, and our recruitment plans, plus our continuing investment in new and existing facilities, are evidence of our intention to remain at the forefront of this exciting region."

Other Moves Underscore
Lucent's Aggressiveness in EMEA

Lucent's announcement of the 2,000-plus new EMEA jobs coincided with yet another event that should boost its business in the region: The company announced that it has signed a contract with NETs, a new, French-based international service provider, to expand Lucent's European optical network.

Lucent's aggressiveness in the EMEA region has been boldfaced by a raft of major moves in the last few months. That flurry of announcements has included:

  • A new optical networking "center of excellence" in Germany;
  • A $150 million expansion of Lucent's optical networking facility in Dublin;
  • An expansion of the company's fiber-manufacturing facility in Denmark;
  • A four-year, $400 million contract for Lucent to build a digital subscriber line network for QS Communications, a German service provider;
  • A $250 million contract to build an optical network, in conjunctions with Telia, Sweden's biggest service provider, that will span both Europe and the United States.

Cisco's Big RTP Move

Several days later, Cisco Systems made its big move in North Carolina. The company purchased 140 acres (56 ha.) of land on the western side of Cisco's current Research Triangle Park campus. The company also optioned 175 acres (70 ha.) of adjacent land.

"North Carolina and RTP are a top market for the information technology industry. We hope to continue our leadership position in the Internet economy and expand our RTP presence over the next few years," Selby Wellman, Cisco senior vice president, said as the purchase was announced. Cisco concurrently announced that its Technology and Mobile Wireless Business Unit will be headquartered in RTP.

Cisco officials suggested that the expansion of its presence in RTP could, over the long term, result in its adding 12,000 new jobs at the prestigious North Carolina address. For the moment, Cisco has only formally announced that it plans to add 2,000 workers over two years in RTP and will possibly base a new division in the park.

Development of the newly acquired 140 acres inside RTP should begin this summer, company officials say. If fully developed, that tract could house 1.1 million sq. ft. (99,000 sq. m.) of office space that could accommodate 3,500 employees.

©2000 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.