Calix expands domestic partnerships to join the BABA movement

Calix will expand several manufacturing partnerships to bow to the “Build America, Buy America” (BABA) initiative, specifically to ensure its service provider customers comply with requirements of the $42.5 billion Broadband Equity, Access and Deployment (BEAD) program.

The company made the announcement today preceding a press conference held at a facility operated by equipment manufacturer Jabil in Auburn Hills, Michigan. Calix will extend its 5-year partnership with Jabil with a manufacturing services agreement at its Michigan facility to produce optical network terminals (ONTs) and optical line terminals (OLTs).

Calix will expand two other longstanding relationships including its 10-year partnership with Hisense Broadband to produce optical modules at its New Jersey facility, and its 8-year partnership with Gemtek to produce ONTs at its California facility.

The company is joining a cohort of equipment providers that have onshored operations as the industry prepares for BEAD funding to hit the market. The National Telecommunications and Information Administration (NTIA) has decreed that recipients of BEAD comply with Congress’ BABA, which requires that fiber networks must use components that are at least 55% made in the U.S.

Calix CEO Michael Weening noted during a press conference that more domestic manufacturing will cut time to deployment as equipment is “not sitting for months on a boat.”

"One of the benefits of having localized manufacturing is that it allows us to get back to that just-in-time mindset," said Weening.

Calix has more than 1,300 active customers in the U.S., “nearly 100%” of which serve rural markets, according to the company. Ramping domestic production will ensure that Calix’s customers are eligible to tap into the BEAD program and create more than 100 manufacturing jobs across the country. Calix manufacturing partners will hire workers in manufacturing, operations, engineering, quality assurance and administrative roles as they expand U.S. production of Calix optical equipment.

Calix’s initial investment into the domestic manufacturing push will fall between $4 million to $6 million, with ongoing spend for operations anticipated to cost around $10 million to $15 million per year. The company said additional jobs will open up as Calix’s service provider customers participate in the BEAD program over the next five to 10 years.

Weening noted it will be an ongoing investment for Calix that he expects will expand “quite rapidly” as its customers take advantage of the BEAD program. “Think of it like a seed fund for us,” he said. “And then as customers take on, it'll grow substantially.”

Other companies that have announced new domestic manufacturing investments as a result of BABA include Nokia, Adtran and Infinera.