SDL Inc. (Nasdaq: SDLI) jumped 9 percent Tuesday after it said it and JDS Uniphase (Nasdaq: JDSU) will extend a contract through 2001.
Under the deal, SDL and JDS will continue to swap optical networking gear. SDL will provide grating-stabilized 980 mm pump lasers to JDS Uniphase for its erbium doped fiber amplifiers (EDFAs).
The contract extension more than doubles the base quantities which were agreed upon in the previous contract, the companies said.
SDL shares were up 18 7/8 to 216 5/8, or 10 percent Tuesday. They got a boost just last week after announcing second quarter results will be "well in excess" of estimates, propelled by strong bookings and a recent acquisition. JDS shares were up 4 1/8 to 84 5/8, or 5 percent.
JDS Uniphase supplies EDFAs, the optical amplifiers needed for high-speed dense wavelength division multimplexing (DWDM) telecommunications networks. Rapidly growing demand for DWDM-based bandwidth has created an increase in demand for high performance optical amplifiers and pump lasers.
"Our production capability of both the laser diode chips and the modules that house them is among the largest in the industry. We are ramping to meet the expected demand for pumps in both terrestrial and undersea telecommunications systems.'' said Donald R. Scifres, CEO and chairman of SDL, Inc in a company statement.
SDL competes with Coherent (Nasdaq: COHR), Lucent (NYSE: LU) and JDS Uniphase, according to Hoover's Online.