Transcript Business Overview

Cowen and Company
20 / 20 TMT Conference
May 29, 2008
Forward-looking Statements
Statements herein may include forward looking statements, including those related to future growth in the
markets we serve, acceptance of our products, and the general market and industry outlook. These
statements involve risks and uncertainties that may cause actual results to differ materially from these
statements. Among other things:
• Projected growth and the general outlook are based on estimates, assumptions and projections management
believes to be reasonable at this time, but are often beyond management's control; and
• Because the market in which Opnext operates is volatile, actions taken may not achieve the desired impact in
light of changing conditions.
• Other factors that could cause results to differ from expectations include: the impact of changing technologies
and competition; the ability of Opnext to source critical parts and to react to changes in industry/market
conditions; changes with respect to rights to intellectual property, the adoption of industry standards; and
consolidations within the industry. These factors are not an all-encompassing list of risks and uncertainties.
Additional information can be found in Opnext's SEC filings. Opnext disclaims any obligation to update these
statements.
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Opnext
“ Opnext
is a leading designer and manufacturer of
transmit and receive optical modules and components
which enable high-speed telecommunications and data
communications networks globally”
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Demand for Bandwidth is Growing Exponentially
Deployment of Broadband Access Capabilities (CATV/FTTC/FTTP)
+
Bandwidth Demand
Proliferation of applications
IP-TV
Online Gaming
Multimedia
Video
Conferencing
Storage
Now
Peer-to-Peer
HD
Video
Future
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Total IP Traffic
30,000
20,000
Mobility
5%
Business Internet Traffic
13%
Business IP WAN Traffic
6%
PB/month
Consumer Internet
Consumer Non-Internet IP
Video Traffic
43%
10,000
33%
2005
2006
2007
2008
2009
2010
2011
• IP Traffic will double every two years
• Consumer IP traffic is growing at a 52% CAGR
• One third of all Internet Traffic in 2011 will be non-Internet traditional video services
Source: Cisco January 2008
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Network Architecture
IP / Optical Infrastructure
Video On
Demand Servers
Voice Application
Servers
PSTN
MultiService
Edge
Router
ONU
•••
Internet
OLT
PON
Head
End
Cable
Modem
MSO
National IP Network
Residential
Network
DSLAM
xDSL
Corporate
Network
Metro
Sonet/SDH
Rings
All Optical Backbone
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IP Layer Evolution
Applications are Driving More and Higher Speed
Data Across the IP Network, this Requires:
• Higher Speed Interfaces
– Migration from 10G to 40G
and 100G in the Future
• Smaller Size Packages for Higher Density
• Lower Power Dissipation
– Un-Cooled Lasers
– Higher Efficiency Lasers
– Wide Temperature Operation
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Optical Backbone and Metro Layer Evolution
Transport Requirements of the IP Layer Drive the
Need for Large Blocks of Bandwidth:
• Multi-wavelength Optical Pipes
– Migration from 10G to 40G
with 100G in the Future
100G Pipe
10000 HDTV Signals
40G Pipe
4000 HDTV Signals
10G Pipe
1000 HDTV Signals
HDTV signal = 10Mbps using MPEG 4
40G-TRV
• Reconfigurable Optical Layer for Scalability and
Flexibility
– Tunability
– Reconfigurability
• Hybrid Metro Networks with Sub-Channel
Management and Multiple Wavelengths
– Multi-Rate DWDM SFPs
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Broad 10G Portfolio
As of Nov. 2007
MP
Under Development
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40G and 100G Portfolio Overview
As of Dec. 2007
MP
Under Development
Under Study
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Opnext Core Business Continues To Be High-Growth 10G and
40G Segments
Total Optical Component Spending ($mm)
$3,922
$3,276
10G and 40G Module Spending ($mm)
10G and 40G
comprise
~80% of our
revenues
$1,148
134% CAGR
$932
$732
$36
20% CAGR
20% CAGR
Source: Ovum-RHK Forecast 2008, and LightCounting 2008
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Selected Opnext Customers
Major Telecom Customers
Major Datacom Customers
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Design Wins Plant the Seeds for Future Growth
60% Increase in Design Wins for Opnext’s Top Ten Customers from 2006-2008
May 2008
Approximately 460 Design Wins
Maturity: Stable Revenue
Growth: Rapid
Deployment
Transition to
Next Gen. Product
Product
Introduction
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Annual Financial Data
*Excludes Stock-based Compensation Expense
** Unaudited
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