July 4, 2011, Wuhan, Two of the biggest fiber optics component companies in mainland China announced the long expected merge today. The merge of  Accelink (Shenzhen stock market, 002281) and WTD will generate the No. 1 component supplier in China, with revenue more than 2 billion RMB (350 million USD). A security company first published this news last Friday, CFOL verified the news with both WTD and Accelink today.

Accelink went to public last year and it became the first real public fiber optic component company in main land China. Its 2010 revenue is 927million RMB with 127 million RMB profit. As the largest passive component supplier in mainland China, Accelink holds a lot of technology on WDM, PLC etc. The state hold company attributes its history to the former solid state component research institute under WRI(Wuhan Research Institute).The company is also one of the 2 largest EDFA manufactures in mainland China.

WTD’s history is much longer than Accelink. As the no.2 joint ventured company in whole main land China, the company was founded nearly 31 years ago. At first, it was joint ventured with U.S. based Lasertron, later its partner changed to Corning when Corning acquired Lasertron. Several years ago, WRI purchased back all the asset belonging to Corning and made WTD another wholly state-hold company under WRI. WTD also holds a lot of fiber optics technology, especially on active component. It introduced transceiver first in China. It is the only Chinese company who has real 40G product. The strong laser diode chip manufacturing ability makes it the real vertical integration ability. In 2010, its revenue is also about 1 billion RMB.

It is not the first time that the two companies were said to merge. When WTD became a state-hold company again, we heard the rumor for the first time. However, the merge suddenly stopped at that time. Because the two companies belong to the same group, WRI, and they are in the same area, there are always requests to merge the two companies both inside and outside WRI. The merge is to the benefit of WRI, because the merge will generate a huge component company, the merge will let WTD’s asset into public market. Because there are already 2 public companies under WRI, Accelink and Fiberhome, there is no hope for WTD to go public in China again. The merge is the best way for WTD to go public.

Up to now, the merge is still waiting for the final certification from government.