Finisar Shares Down After Losing Key Apple VCSEL Deal

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Today brings some bad news for a major supplier of 3D facial scanning components critical to Apple’s TrueDepth camera.

Reportedly, Finisar Corporation has lost out on a key deal to supply Apple with VCSEL sensors, according to a BlueFin Research report spotted by SeekingAlpha.

Shares of Finisar are down 6.64 percent as of early Monday afternoon (Pacific Daylight Time).

Details surrounding the loss of the critical deal are sparse as of the writing of this article. But according to BlueFin analysts John Donovan and Steve Mullane, Finisar is having “major difficulties” finding certain 6-inch wafer equipment sets (via Benzinga).

That may have “opened a window” for II-VI, Inc — another electronic component manufacturer.

Market watcher Notable Calls suggests it could be good news for the firm as a “second source supplier” of VCSEL sensors.

Previously, Finisar was Apple’s exclusive supplier of VCSEL arrays.

VCSEL technology is a key component of Apple’s TrueDepth camera and Face ID platform. Those systems first debuted on the iPhone X, but analysts predict that all three of this year’s iPhones could sport the technology. Due to that, Apple’s orders for VCSEL might obviously see a bump.

The laser technology is also used in the proximity-sensing components for Apple’s AirPods — which have proven to be massively popular since their launch.

Late last year, Apple awarded $390 million to Finisar as part of its Advanced Manufacturing Fund. The component supplier was using that money to ramp up VCSEL production — which included remodeling a sprawling 700,000-square foot production plant in Sherman, Texas.

In December, The Motley Fool reported that Finisar would use 6-inch wafers to produce more VCSEL arrays throughout 2018. If that plan succeeded, the publication noted, then the cost of production for the arrays would decline. While the exact details are still unclear, today’s report suggests that the component supplier is having trouble finding the proper manufacturing equipment to do so.

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