SHENZHEN -- Optical network OEM Oclaro has signed a definitive agreement to transfer its final assembly and test operations here to top 10 EMS provider Venture Corp.

Oclaro also will transfer production to Venture’s Malaysia facility over the next three years.

Oclaro had said last year that it would seek a buyer for the plant and instead focus on product innovation. The plant accounts for about 65% of Oclaro's manufacturing.

What this means for Fabrinet is less clear. What production Oclaro previously outsourced was exclusive to Fabrinet in Thailand, and the company accounted for 17% of Fabrinet's sales in fiscal 2011.

Oclaro did not indicate how much of its production would be transferred to Venture. However, in January Oclaro credited Fabrinet for its quick recovery after the harsh Bangkok area floods shut down production last fall.

In a research note today, Deutsche Bank analyst Sherri Scribner said that while some might see the news as a negative for Fabrinet, the actual impact might be nominal.

"[W]e do not expect this deal to impact Fabrinet’s business with Oclaro in the near term. Fabrinet focuses on new product introductions and higher complexity products, which we believe will continue to be the case. Longer term, with Oclaro outsourcing the majority of its manufacturing capacity to contract manufacturers, we believe there is the potential for Fabrinet to win additional business with Oclaro."