Plano-based tech firm DZS Inc. (Nasdaq: DZSI) has announced a partnership with Thailand-based manufacturing company Fabrinet (NYSE: FN), according to a news release.
The agreement will enable DZS to focus on innovation across its access and optical edge platforms and cloud software solutions. The partnership is also expected to improve profit margins, improve working capital and lower operational expenditures.
"This new sourcing and manufacturing model will provide DZS with the scale, agility, state-of-the-art tools and world-class manufacturing capabilities required to meet customer demand and deliver on a growing backlog that has increased more than 300% since 2020," Charlie Vogt, CEO of DZS, said in the release.
Under the partnership, DZS will also transition its sourcing, procurement, manufacturing, order fulfillment and return merchandise authorization activities in its Florida facility to Fabrinet.
The DZS operations, supply chain and manufacturing workforce in Florida will be reduced by two-thirds, and the remaining team will be relocated to a different facility. Impacted employees will receive job placement support, according to the release.
"The overhead of a manufacturing facility, including maintenance and equipment costs, can severely impact an organization's balance sheet and slow innovation and execution," Harpal Gill, president and COO of Fabrinet, said in the release. "This partnership allows us to leverage our purchasing power and advanced manufacturing expertise to drive efficiencies for DZS."
DZS will continue to manage its supply chain relationships. The transition began in early October with the goal of being fully operational by Jan. 1, 2023.
In June, DZS acquired California-based Adaptive Spectrum and Signal Alignment Inc. for $25 million in cash.
