Lucent Technologies plans to boost spending on fibre optic cable production by more than $650m (£411m) over the next two years to try to exploit a boom caused by increased internet use.
The move also follows a 23 per cent drop in the telecoms equipment supplier's fiscal first quarter profits to $1.18bn or 36 cents a share compared with the same period in 1998. The fall was partially due to the company's inability to keep pace with demand for new optical networking products.
The investment comes on top of a $350m scheme already underway, which will bring the total injection of capital to $1bn and lead to the creation of about 300 jobs. Fibre optic cable is able to carry both voice and data packets that can be picked up by telephone and internet users.
Denys Gounot, president of Lucent's cable systems business, said: "To keep pace with demand, we have more than doubled our global capacity to manufacture fibre optic products in the past two years alone - and we will increase our fibre and fibre cable capacity in 2000 by more than 60 per cent."
As a result of the investment, Lucent will add manufacturing capacity to optical fibre and cable factories in the US, Denmark, Germany, China, Thailand, Russia and Brazil.
The company also just announced plans to invest a further $30m in quadrupling the output of its optoelectronic products. Gounot said that Lucent intends to invest nearly $1.5bn in researching and developing optoelectronic and optical fibre products over the next three years.
At the same time, Lucent said that it had agreed standards with Hitachi and Alcatel covering fibre optic transceivers, which send and receive signals to each other. The aim is to make the devices compatible by establishing standard dimensions and common electrical interfaces.
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