Communications' Biggest Bottleneck

Faster is better. That's why fiber-optic networks, brimming with rivers of email messages and Web pages, are looking for ways to squeeze out more bandwidth. Companies such as Ciena (CIEN Quote), Alcatel (ALA Quote) and Lucent (LU Quote) are working on a number of products to pack more light waves into each optical fiber.

The result is a backlog of orders for the optical components built by Uniphase (UNPH Quote), its merger partner JDS Fitel (JDS Quote), SDL (SDLI Quote) and E-Tek (ETEK Quote). Their arcane pump lasers, filters and amplifiers are the scarcest technology in the communications business.

"We're ramping manufacturing as hard as we can, but at the same time demand continues to grow," says Kevin Kalkhoven, CEO of Uniphase, a leading builder of several components based in San Jose, Calif. "That's our biggest challenge right now," echoes Donald Scifres, CEO of SDL, a maker of pump lasers based in San Jose, Calif. ...