Fiber-optic component maker Finisar (FNSR) could be at risk of losing business from Cisco Systems (CSCO) as a result of the latter’s purchase last week of component maker Lightwire, writes Jefferies & Co.’s James Kisner, cutting his rating on Finisar to Hold from Buy, while reducing his price target to $22 from $24.

Cisco is focusing on developing its own components, writes Kisner, echoing comments yesterday from Mizuho’s Joanna Makris:

Our discussions with industry contacts suggest that Cisco plans to launch proprietary interfaces (in lieu of those provided by Finisar) for high-speed (40G/100G) interconnects using Lightwire technology by July 2013. Our checks suggest that this technology is potentially very disruptive, reducing the cost of 100G solutions by 90% while increasing platform density. We estimate that only 5-10% of Finisar’s current revenue is at risk as a result of the Lightwire acquisition, but we’re concerned that this portion of Finisar’s revenue stream is among the fastest growing. There is clearly significant uncertainty around Cisco’s ability to successfully integrate Lightwire technology, but we believe this issue could become more prominent in investors’ minds at the OFC optical industry conference in Los Angeles next week.

Kisner advises investors look instead to invest in JDS Uniphase (JDSU), whose shares he rates Buy.

Finisar shares this morning are down 78 cents, or 3.4%,at $22.24.

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