Apple’s $390 Million Deal with Finisar Revealed to Be an Advance Order and Not an Investment

Yesterday, news broke out about Apple investing $390 million in Finisar as part of its Advanced Manufacturing Fund. Well, Finisar has now offered some clarification on this front, mentioning that it’s more of an advance order rather than a full blown investment. This is a strategic move by Apple to ensure that its business with Finisar remains unharmed.

For those unaware, Finisar makes VCSEL wafers used in the iPhone X TrueDepth camera system. As such, it is one of Apple’s crucial suppliers. Keeping this in mind, it’s only logical that the company is investing heavily with regards to future orders to ensure a steady supply of its components.

Analysts claim that since the VCSEL wafers offered by Finisar are in short supply right now, making an advance order like this helps Apple keep the competitors away who might be looking to develop similar features on their devices.

VCSEL wafers are only made by Finisar and Lumentum at the moment, with the latter seemingly facing issues with yields. So it’s clear that Apple is essentially locking out Finisar to stop the competition from coming up with similar features.

Analyst Gene Munster said “If you’re Samsung today, you’re thinking, who can do these types of VSCEL arrays? I don’t know of anybody else. It’s a little bit of a tough spot for them.

VCSEL units are also used in Apple’s AirPods, particularly with the case which detects the insertion and removal of the earbuds. The component has become even more crucial for Apple with the launch of the iPhone X. Apple has significantly improved wait times for the iPhone X around the world, and by streamlining supply of essential components, the company is basically safeguarding its future.

[Via Reuters]

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