ATX CEO: Our new US factory could help cable score more BEAD money

ATX Networks is on the verge of opening a new manufacturing plant in Michigan which will be capable of pumping out 400,000 to 500,000 new amplifiers each year and eventually also produce as many as 30,000 nodes each year. That plant, CEO Dan Whalen told Fierce, could be the key to helping cable operators win more funding from the $42.5 billion Broadband Equity, Access, and Deployment (BEAD) program.

Whalen’s theory is based on the idea that strict enforcement of Buy American requirements attached to BEAD funding – requiring components used to contain 55% domestic content – could make it nearly impossible to source materials for fiber builds in a timely manner. ATX’s factory, the thought goes, could allow cable operators to seize on that time to market opportunity.

According to Whalen, ATX plans to focus on producing 1.8 GHz amplifiers at its new plant. These amplifiers can be used to implement high-splits using DOCSIS 3.1 or to make the leap to DOCSIS 4.0.

“We’re very intentional about this,” Whalen said. “We think that that [1.8 GHz] product is arguably a fiber-like or even fiber-plus product for the cable operators. They could easily go lobby that this is something that should be eligible for BEAD funding because we’re providing fiber-like services for customers…and by the way, we’re buying a product that more than 55%” is made in the U.S.A.

Nodes and returns

At the end of last year, ATX inked a deal to take over development of Cisco’s popular GS7000 nodes. Whalen said ATX versions of those nodes (under the GigaXtend brand) will be manufactured at the factory in Michigan later this year, meaning operators will be able to source two key products domestically.

ATX’s new nodes also tie into another initiative it launched late last year which is aimed at ensuring operators which haven’t deployed distributed access architecture (DAA) can also benefit from high-splits.

Back before ATX struck the node licensing agreement with Cisco, the pair inked a deal which allowed ATX to develop 204MHz Digital Return transmitter and receiver modules for the GS7000 nodes. Operators with analog optics can use these modules to boost upstream capacity to deliver symmetrical 1-gig broadband services.

ATX just began shipping Digital Return modules to customers. Whalen said while ATX has around 20 GS7000 customers, just over half are looking at the digital return modules. Most of these operators are in North America, though Whalen said there could also be some customers in Latin America and potentially even Europe.

Cost expectations vs reality

The new factory will also help ATX address another issue: the snarled supply chain. While many vendors have made statements about how the supply environment is improving, Whalen said those can be misleading. Often, when customers hear that supply chain conditions are improving, they interpret that as costs being down. That’s not really the case, Whalen said.

Yes, he said, it’s true that conditions have improved and costs have gone fallen over the past six to nine months. But from a baseline perspective, costs are still more than two times higher than they were in a pre-Covid environment and ATX hasn’t seen “any beneficial cost decreases" in the supply chain over the past two years.

The move to ramp domestic manufacturing will help ATX avoid costs and delays related to overseas shipping. It will also reduce its exposure to increased labor and fuel costs as well as delays on the rail and trucking side of things, Whalen said.

Still “I’m not going to sit here and say I’m not worried about it,” he said. “We’re in a really great spot to address the actual supply part of the equation. The cost and price expectations are things that keep me a little more worried.”