NTT Electronics and Oki Team Up in the Optical Communication Device Business
- Enhancing Competitiveness and Management Efficiency by Integrating Production Lines and Creating Synergy Between Products -

"In the optical component business area, many mergers and acquisitions have been reported, but this will be the first significant such alliance in Japan," said Dr. Hiroshi Yoshimura, Managing Director and Executive Director of the Photonics Business Group of NEL. "NEL will be able to improve and strengthen the component business through this alliance. I believe both NEL and Oki will be able to offer better service to our customers."

"Through the alliance, Oki will be able to further enhance its base in the optical communication device business, which can be expected to grow along with the expansion of broadband networks," said Masaharu Nishiwaki, President of the Optical Components Company at Oki Electric. "Both Oki and NEL have strengths in this area. We believe that both companies' technologies and skills in production and sales will prove complementary, resulting in excellent solutions that satisfy customer requirements."

Both NEL and Oki are leading vendors in the optical communication device market. NEL excels in process technology for high-speed laser diodes with greater-than 2.5Gb/s products, as well as wavelength multiplexing products. Oki's strengths lie in its abundant product lineup and volume production technology for photo diodes from 2.5Gb/s to 10b/s and 2.5Gb/s laser diodes.

Under the agreement, the two companies will integrate their wafer-process and volume-production technologies for laser diode chips, photo diode chips, modulators, and hybrid-functioned devices into NEL's production lines. They will enhance each product lineup by jointly developing new optical communications devices and by offering each product through OEM, which will result in reducing development time and redundant investment. In order to strengthen sales capabilities, NEL and Oki will also effectively use their sales channels to reinforce their respective activities. Through these measures, the two companies intend to increase their competitiveness and expand business.

While the two companies cooperate for the integration of wafer process and the effective use of sales channels, the two companies aim to extend the alliance range for further enhancement of their optical communications device business. This includes the study for the improvement of assembly process and the effective usage of mutual resources.

Outline of the alliance:

1. Integration of wafer process (chip production)
   The alliance integrates the two companies' production facilities, and prepares production lines at the NEL Ibaragi plant for joint operation.
2. Effective use of both companies' sales channels
   The alliance increases both companies' sales by expanding their product lineup and by using both companies' sales channels.
3. Joint product development
   The alliance effectively uses the two companies' technologies and know-how, through which they aim to improve product development efficiency as well as to decrease development time.
4. Possible expansion of the scope of the alliance
   The two companies will study the potential expansion of the alliance, including the integration of assembly processes and offshore manufacturing.

About Oki Electric Industry Co., Ltd.
Founded more than a century ago in 1881, Oki Electric Industry Co., Ltd. is Japan's first telecommunications manufacturer, with its headquarter in Tokyo, Japan. With the corporate vision, "Oki, Network Solutions for a Global Society," Oki Electric provides top-quality products, technologies and solutions to its customers through its telecommunications systems, information systems and electronic devices segments. All three segments are integrated into one effective organization that functions as a collective force to create exciting new products and technologies, including information and telecom converged solutions. Through its business activities, Oki Electric satisfies a spectrum of customer needs in various markets.

About NTT Electronics Corp.
NTT Electronics Corporation (NEL) is one of the members of NTT (Nippon Telegraph and Telephone Corporation) group. It has been providing the state-of-the-art devises for optical telecommunications networks with collaboration of NTT laboratories, covering a wide range of products such as DWDM lasers, PLC-based passive components, ultra-high-speed electronic devices, MPEG-2 products, and datacom equipment. For AWGs, in particular, NEL keeps on the first track in terms of sales and technical performance. For more information, visit NEL web site: www.nel-world.com/.