OCP acquires GEPON component supplier GigaComm

July 17, 2006 Woodland Hills, CA -- Optical Communication Products (OCP), manufacturer of optical subsystems and modules, has agreed to acquire privately held GigaComm Corp., a Taiwan-based supplier of passive optical network (PON) fiber-to-the-home (FTTH) components, in an all cash transaction. OCP will pay approximately $20 million for GigaComm.

July 17, 2006 Woodland Hills, CA -- Optical Communication Products (OCP), manufacturer of optical subsystems and modules, has agreed to acquire privately held GigaComm Corp., a Taiwan-based supplier of passive optical network (PON) fiber-to-the-home (FTTH) components, in an all cash transaction. OCP will pay approximately $20 million for GigaComm.

Based in Taiwan, GigaComm is currently the leading supplier of FTTH modules in Japan, which is presently the world's largest FTTH market. GigaComm provides PON components to many of Japan's leading technology companies, including Mitsubishi Electric Company.

The transaction is OCP's initial venture in Asia and is projected to be completed by the end of the summer. Acquiring GigaComm is part of OCP's strategy to make its product offerings more comprehensive, bring focus to its efforts in Asia, and to extend the company globally, say company representatives. The strategic combination is expected to increase OCP's level of current revenues by approximately 25%.

The Japanese FTTH market is the largest in the world, with the number of FTTH subscribers nearly doubling from 2.9 million at the end of March 2005 to 5.4 million by March 2006. GigaComm holds the majority of the country's market share for Gigabit Ethernet PON (GEPON) modules. The GEPON standard (also known as EPON in North America) is widely deployed in Japan to enable data, video, and IP voice services over fiber-optic networks. NTT, Japan's largest service provider, has reported that it expects to have 30 million FTTH subscribers by 2010.

A recent report from market researcher Heavy Reading indicates that the number of households connected via FTTH worldwide will soar to nearly 86 million in 2011, up from about 11 million in 2006, a nearly 700% increase. FTTH growth over the next five years will be dominated by Asia, where the number of connected households will grow to 59 million by 2011. The rest of the subscriber base is expected to be split equally between the Americas (mainly the U.S.) and the Europe/Middle East/Africa region by 2011.

"As the largest supplier of FTTH modules in Japan, GigaComm gives us instant penetration into the Asian market, as well as positioning OCP to take advantage of the emerging Gigabit Passive Optical Network [GPON] markets in North America and Europe," notes Dr. Muoi V. Tran, OCP's chairman and CEO. "The acquisition of GigaComm also gives us an enhanced ability to increase capacity through its integrated manufacturing facility, an important second and competitive source of lasers, and a talented pool of engineers and management in Asia."

"GigaComm has been an outstanding PON supplier," adds Jun Uenobo, general manager of Mitsubishi Electric Company's Purchasing Department. "Over the past year, GigaComm has shipped us over one million GEPON Optical Network Unit [ONU] modules without a single defect to support the Japanese GEPON initiative. We look forward to our growing partnership with GigaComm and the OCP team."

GigaComm will become a wholly owned subsidiary of OCP and continue to operate in Taiwan. Dr. Jacob Tarn, GigaComm's president and CEO, will remain with GigaComm and continue to lead the Company's operations.

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