Mellanox exits 1550nm Silicon Photonics

Mellanox Technologies will discontinue its 1550nm silicon photonics development activities, effective immediately.

The company said the decision to exit this segment was based on sales performance and that the company will focus its efforts on delivering 200 Gbps and 400 Gbps cables and transceivers.

“The Mellanox Board of Directors and management team continually review our strategic priorities and investments to ensure they meet our future goals. We began our review of the silicon photonics business in May of 2017, but as the business did not become accretive as we had hoped, we decided to discontinue our 1550nm Silicon Photonics development activities,” said Eyal Waldman, president and CEO of Mellanox Technologies. “We appreciate all of the efforts of the silicon photonics team over the years and wish them success in their future endeavors.”

Mellanox will incur an estimated aggregate charge of $21 million to $24 million, including approximately $4 million to $5 million of cash expenditures – mostly related to the severance costs of a reduction in force of about 100 people – as well as approximately $17 million to $19 million of other charges, consisting primarily of non-cash items.

The company does not expect an impact on fiscal 2018 revenues.

No impact is expected for its Variable Optical Attenuators (VOA) product and Mellanox will continue to sell to and support its VOA customers.