Infinera Corp, US Optical Networking Products Manufacturer, Considers Sale Amidst Industry Challenges

Infinera Corp, a leading US-based semiconductor manufacturer specializing in optical networking products, is reportedly exploring a sale of its business. The company competes with Chinese telecom giant Huawei in the market for optical semiconductors and network equipment.

According to sources familiar with the matter, Infinera, which has a market capitalization of $1.6 billion, is working with investment bank Centerview Partners to initiate the sales process in the coming weeks. However, it is unclear whether a deal will be reached.

Infinera designs and produces a range of optical networking products, including digital optical transport systems, optical line systems, and packet-optical networking platforms. These products are widely used by telecommunications companies and network operators to manage their networks and handle increasing data traffic.

The company has been facing challenges in recent years, particularly in improving its profitability and supply chain efficiency. Its stock has declined by 15% over the past year, almost double the industry average, due to various pressures, including rising raw material costs and increased competition.

The potential sale of Infinera presents both opportunities and challenges. On the one hand, the uncertainty surrounding the company's future may lead to instability in the supply chain and potential delays in fulfilling orders. On the other hand, for companies seeking to expand their offerings in the optical semiconductor and network equipment markets, the potential acquisition of Infinera may provide a strategic opportunity to gain a competitive edge and expand their market share.

It is worth noting that Infinera's acquisition of Coriant, a manufacturer of optical networking equipment, from Oaktree Capital in 2018 has made the investment firm a significant shareholder of Infinera, with a seat on the board of directors. Infinera has not responded to requests for comments, while Oaktree Capital declined to comment on the matter.