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Fiber-optic networks operate on the premise that flashes of light - representing voice, video or data - can travel hundreds of miles over wires made of twisted glass and still retain clarity once they reach their destination point.
But fiber-optic component companies, which make the equipment allowing this process to happen, see a future that is significantly more clouded. That's because the market for such gear - once driven by soaring demand from new carriers building state-of-the-art networks - has been shattered by the ruin of these same carriers that vastly overestimated their business potential and are now being cycled through the nation's bankruptcy courts.
Now, however, some industry watchers say they are seeing some light at the end of the tunnel. 'Me glut in equipment inventory that forced many buyers to delay purchases is starting to clear out. And order cancellations, which have plagued equipment providers for much of the year, are also starting to diminish, although that may be because few new orders have been made in the first place.
"The end-user market is going through a bad period right now," said Joseph Wolf, an optical component analyst with UBS Warburg. "The feeling (that the market has bottomed out) comes from the fact that backlogs have pretty much been gone through and order cancellations are done.
"But there's a difference between bottoming out," Wolf added, "and growing again."
Market forces have put a pinch on optical component startups in the Bay Area, many of which are clustered near Fremont. Having raised more than $800 million in venture...