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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
      Form 10-K
   ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d)
 OF THE SECURITIES EXCHANGE ACT
    OF 1934
 For the fiscal year ended March 31, 2009
  Commission file number
    000-33306
      Opnext, Inc.
 (Exact name of registrant as
    specified in its charter)
      Delaware

22-3761205(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)46429 Landing Parkway, Fremont, California(Address of principal
    executive office)

94538(Zip Code)  (510) 580-8828
 (Registrants telephone number, including area code)
      Securities registered pursuant to Section 12(b) of the
    Act:
 None
  Securities registered pursuant to Section 12(g) of the
    Exchange Act:
   Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, $0.01 par value

The NASDAQ Stock Market LLC    o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K




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##### 





Table of
    Contents
   
 PART IItem 1.

Business


3Item 1A.

Risk Factors


13Item 1B.

Unresolved Staff Comments


30Item 2.

Properties


30Item 3.

Legal Proceedings


31Item 4.

Submission of Matters to a Vote of Security
    Holders


32PART IIItem 5.

Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


33Item 6.

Selected Financial Data


36Item 7.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


38Item 7A.

Quantitative and Qualitative Disclosures about
    Market Risk


50Item 8.

Financial Statements and Supplementary
    Data


51Item 9

Changes in and Disagreements with Accountants
    on Accounting and Financial Disclosure


84Item 9A

Controls and Procedures


84Item 9B

Other


86PART IIIItem 10.

Directors, Executive Officers and Corporate
    Governance


86Item 11.

Executive Compensation


86Item 12.

Security Ownership of Certain Beneficial
    Owners, Management and Related Stockholders Matters


86Item 13.

Certain Relationships and Related
    Transactions, and Director Independence


86Item 14.

Principal Accountant Fees and Services


86PART IVItem 15.

Exhibits and Financial Statement
    Schedules


84SIGNATURES


89EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2    EX-23.1:


CONSENT OF ERNST & YOUNG LLPEX-31.1:


CERTIFICATIONEX-31.2:


CERTIFICATIONEX-32.1:


CERTIFICATIONEX-32.2:


CERTIFICATION   2




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PART I  Item 1.
    Business  Business
    Description
  Form 10-K
    30-year
   3




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Industry
    Background
  IP-based peer-to-peer
      
    The Power Challenge.  Modules that operate at
    10Gbps and 40Gbps consume two to more than five times as much
    electrical power as modules operating at the preceding data rate
    and the power challenges are expected to become more difficult
    as the industry moves toward 100Gbps. Network service providers
    generally have fixed, limited space in their network central
    offices, closets, and data centers to house network equipment,
    creating de facto standards on the physical size allowed for
    each piece of network equipment regardless of data rate. To
    offer increasingly higher-speed systems, network system vendors
    need more efficient modules to support greater port density
    while adhering to power supply and cooling system constraints.
    These constraints drive the need for laser technology with
    higher-temperature tolerance and improved efficiency, which
    reduces power consumption and enables smaller form factor
    modules to be used. Most carriers and system vendors also now
    have well established green programs and award preference to
    suppliers that help them reduce their carbon footprint through
    lower power consumption.
    The Temperature Challenge.  Within an optical
    module, the laser diode is the component most sensitive to
    temperature. As a result, 10Gbps modules have in the past been
    constrained to 70°C maximum operating case temperature.
    Even in temperature controlled environments, heat dissipation
    from neighboring electronic components can raise internal
    equipment temperatures to levels that degrade laser and module
    performance. Furthermore, some network equipment is located
    outdoors in non-temperature controlled environments where
    transceiver modules need to operate reliably up to an operating
    case temperature of 85° C. Therefore, customers are
    demanding optical modules that can operate at wider temperature
    ranges, especially incorporating uncooled lasers that do not
    require costly and inefficient thermoelectric coolers. A 4




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benefit of more efficient and uncooled lasers is that they draw
    less current which reduces power consumption and helps the
    environment. We are extending this technology to reaches of up
    to 80km at 10Gbps.  
    The Size Challenge.  The system throughput,
    data rate of each port and the overall chassis dimensions of a
    system define the bandwidth capacity of that system. Network
    service providers and enterprises have limited space in which to
    house their optical network equipment within an office or
    equipment room. Expanding the capacity of a system requires
    increasing the number of ports and the data rate of those ports.
    To meet these higher speed and density requirements, industry
    leaders have defined smaller 10Gbps transceiver packages. As the
    size of these packages decreases, so does their ability to
    dissipate heat, making it virtually impossible to support
    cooled-laser technology. Therefore, lower power consumption
    uncooled-laser technology with higher temperature tolerance and
    improved efficiency is required to meet the thermal capacity of
    these smaller packages.    time-to-market
  Our Key
    Advantages
    Technology Leadership.
  Broad Product Line. line-side
 5




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Superior Performance.
  Continuous Innovation.
  MSA Leadership.
  Technology
    and Research and Development
    Semiconductor Laser Design &
    Manufacturing.
 6




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Optical Semiconductor Materials.
  Subassembly Design.
  Analog Integrated Circuit and Radio Frequency
    Design. time-to-market.
  Analog Optical Design.
  Digital Logic Design. OC-768
  Module Design.
 7




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Modulation Techniques.
  System-Level Software.
  time-to-market
  Products
         8




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time-to-market.
      Product LineProduct Types

Equipment

Application

Speed

Reach

ShippingSubsystem

Transport

Telecom

43 Gbps

Tunable PSBT and NRZ-DPSK

Since 2005Custom modules

Router

Telecom

43 Gbps

Tunable PSBT and NRZ-DPSK

Since 2006PMDC

Transport

Telecom

43 Gbps

Improves PMD tolerance of 40G

Since 2008300 pin

Transport & Routers

Telecom & Datacom

40/43Gbps

2km, Tunable PSBT and NRZ-DPSK

Since 2004300 pin

Transport, MSS, Routers & AM*

Telecom & Datacom

10Gbps

600m, 2km, 12km, 20km, 40km, 80km, DWDM & Tunable

Since 2000XENPAK

Switches & Routers

Datacom

10Gbps

300m, 10km, 40km, 80km & DWDM

Since 2002X2

Switches & Routers

Datacom

10Gbps

300m, 10km, 40km, 80km & DWDM

Since 2004XPAK

Servers, Switches

Datacom & Storage

10Gbps

300m, 10km

Since 2005XFP

Transport, MSS, Switches, Routers & AM, Servers

Telecom, Datacom & Storage

10Gbps

300m, 600m, 2km, 12km, 20km, 40km, 80km & DWDM

Since 2004SFP+

Servers, Switches

Datacom & Storage

8-10Gbps

100m, 300m, 10km & 40km

Since 2007XMD and XLMD TOSA & ROSA

Transceiver Modules

Telecom & Datacom

10-43Gbps

10km, 40km, 80km

Since 2005LDM/PDM

Transport & MSS

Telecom

10Gbps

40km, 80km, DWDM

Since 2000SFP

Transport, MSS, Routers & AM

Telecom

155Mbps, 622Mbps, 2.5Gbps

2km, 15km, 40km, 80km, DWDM

Since 2003SFP

Hubs & Switches

Datacom

1.25Gbps

500m, 10km, 80km

Since 2004     *
    
    MSS refers to multi-service switches and AM refers to access
    multiplexers. 9




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Customers
        Competition
    
    product performance, including size, speed, operating
    temperature range, power consumption and reliability;  
    price-to-performance
    characteristics;
    delivery performance and lead times;
    ability to introduce new products in a timely manner that meet
    customers design-in schedules and requirements;
    breadth of product solutions;
    sales, technical and post-sales service and support;
    sales channels; and
    ability to comply with new industry MSAs and requirements. 10




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
    price to performance characteristics;
    delivery performance and lead times;
    breadth-of-product solutions;
    sales, technical, and post-sales service and support; and
    sales channels.  Manufacturing
  time-to-market
           11




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Sales,
    Marketing and Technical Support
          Patents
    and Other Intellectual Property Rights
       12




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Employees
    Item 1A.
    Risk
    Factors  You should carefully consider each of the following risks and
    all of the other information set forth in this annual report.
    The following risks relate principally to our business and our
    common stock. The risks and uncertainties described below are
    not the only ones we face. Additional risks and uncertainties
    that we do not know or that we currently believe to be
    immaterial may also adversely affect our business. If any of the
    following risks and uncertainties develop into actual events,
    they could have a material adverse effect on our business,
    financial condition or results of operations, which could also
    adversely affect the trading price of our common stock.
  We
    depend on a limited number of customers for a significant
    percentage of our sales, and any loss, cancellation, reduction
    or delay in purchases by these customers could harm our
    business.
    We are
    dependent on contract manufacturers used by our customers for a
    significant portion of our sales.
   13




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Uncertainty
    in customer forecasts of their demands and other factors may
    lead to delays and disruptions in manufacturing, which could
    result in delays in product shipments to customers and could
    adversely affect our business.
    We
    participate in vendor managed inventory programs for the benefit
    of certain of our customers, which could result in increased
    inventory levels and/or decreased visibility into the timing of
    sales.
      If our
    customers do not qualify our products or if their customers do
    not qualify their products, our results of operations may
    suffer.
   14




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We do
    not have long-term volume purchase contracts with our customers,
    so our customers may increase, decrease, cancel or delay their
    buying levels at any time with minimal advance notice to us,
    which may significantly harm our business.
    We may
    experience low manufacturing yields or higher than expected
    costs.
   15




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There
    is a limited number of potential suppliers for certain
    components. In addition, we depend on a limited number of
    suppliers whose components have been qualified into our products
    and who could disrupt our business if they stop, decrease or
    delay shipments or if the components they ship have quality or
    consistency issues. We may also face component shortages if we
    experience increased demand for modules and components beyond
    what our qualified suppliers can deliver.
    We
    rely substantially upon a limited number of contract
    manufacturing partners and, if these contract manufacturers fail
    to meet our short and long-term needs and contractual
    obligations, our business may be negatively
    impacted.
    We
    depend on facilities located outside of the United States to
    manufacture our products, which subjects us to additional
    risks.
    
    unexpected changes in regulatory requirements;
    legal uncertainties regarding liabilities, tariffs and other
    trade barriers;
    inadequate protection of intellectual property in some countries;
    greater incidence of shipping delays, including, but not limited
    to, as a result of customs delays; 16




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
    greater difficulty in overseeing manufacturing operations,
    including, but not limited to, the levels of inventory
    maintained at our and our contract manufacturers
    facilities;
    greater difficulty in hiring talent needed to oversee
    manufacturing operations;
    potential political and economic instability; and
    the outbreak of infectious diseases which could result in travel
    restrictions or the closure of our facilities or the facilities
    of our customers and suppliers.    We
    face increasing competition from other providers of competing
    products, which could negatively impact our results of
    operations and market share.
        Decreases
    in average selling prices of our products may reduce operating
    profit and net income, particularly if we are not able to reduce
    our expenses commensurately.
   17




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Shifts
    in our product mix may result in declines in operating income
    and net income.
    If
    demand for optical systems, particularly for 10Gbps and above
    network systems, does not continue to expand as expected, our
    business will suffer.
    Our
    products may contain defects that may cause us to incur
    significant costs, divert our attention from product development
    efforts, result in a loss of customers and may possibly result
    in product liability claims.
  and/or
 18




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Our
    market is subject to rapid technological change and, to compete
    effectively, we must continually introduce new products that
    achieve market acceptance or our business may be significantly
    harmed.
    
    changing product specifications and customer requirements;
    unanticipated engineering complexities;
    delays in or denials of membership in future MSAs that become
    successful, or membership in and product development for MSAs
    that do not become successful;
    difficulties in hiring and retaining necessary technical
    personnel;
    difficulties in reallocating engineering resources and
    overcoming resource limitations; and
    changing market or competitive product requirements.   19




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Our
    products are complex and may take longer to develop and qualify
    than anticipated and we may not recognize sales from new
    products until after long customer qualification
    periods.
        If we
    fail to obtain the right to use others intellectual
    property rights necessary to operate our business, our ability
    to succeed will be adversely affected.
        
    cease the manufacture, use or sale of the infringing products,
    processes or technology;
    pay substantial damages for past, present and future use of the
    infringing technology;
    expend significant resources to develop non-infringing
    technology; or
    pay substantial damages to our customers or end users to
    discontinue use or replace infringing technology with
    non-infringing technology.   20




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We
    license our intellectual property to Hitachi and its
    wholly-owned subsidiaries without restriction. In addition,
    Hitachi is free to license certain of Hitachis
    intellectual property that we use in our business to any
    third-party, including our competitors, which could harm our
    business and operating results.
      Our
    failure to protect our intellectual property may significantly
    harm our business.
    Pursuing
    infringers of our intellectual property rights can be
    costly.
    Third
    parties may claim we are infringing their intellectual property
    rights, and we could be prevented from selling our products, or
    suffer significant litigation expense, even if these claims have
    no merit.
   21




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Our
    future operating results may be subject to volatility as a
    result of exposure to foreign currency exchange
    risks.
    If we
    fail to retain our senior management and other key personnel or
    if we fail to attract additional qualified personnel, we may not
    be able to achieve our anticipated level of growth and our
    business could suffer.
   22




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The
    anticipated benefits of the merger with StrataLight may not be
    realized fully, or realized at all, or may take longer to
    realize than expected.
    
    demonstrating to customers that the merger will not result in
    adverse changes in client service standards or business focus
    and helping customers conduct business;
    consolidating and rationalizing administrative infrastructures;
    integrating product offerings;
    coordinating sales and marketing efforts to effectively
    communicate our capabilities to customers;
    coordinating and rationalizing research and development
    activities to enhance introduction of new products and
    technologies with reduced cost; and
    preserving important relationships of both Opnext and
    StrataLight and resolving potential conflicts that may arise.  day-to-day
  We may
    not achieve strategic objectives, anticipated synergies and cost
    savings and other potential benefits of the merger with
    StrataLight.
    
    our inability to increase product sales;
    unfavorable customer reaction to the our companys products;
    competitive factors, including technological advances attained
    by competitors and patents granted to or contested by
    competitors, which would enhance their ability to compete
    against us;
    the failure of key markets for our products to develop to the
    extent or as rapidly as currently expected;
    changes in technology that increase the number of competitors
    that we face or require us to make significant capital
    expenditures to develop competitive products; and
    the failure to retain key employees.   23




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Potential
    future acquisitions may not generate the results expected, could
    be difficult to integrate, divert the attention of key
    personnel, disrupt our business, dilute stockholder value and
    impair our financial results.
    
    difficulties in integrating the manufacturing, operations,
    technologies, products, existing contracts, accounting and
    personnel of the target company and realizing the anticipated
    synergies of the combined businesses;
    difficulties in supporting and transitioning customers, if any,
    of the target company;
    diversion of financial and management resources from existing
    operations;
    the price we pay or other resources that we devote may exceed
    the value we actually realize, or the value we could have
    realized if we had allocated the purchase price or other
    resources to another opportunity or for our existing operations;
    risks associated with entering new markets in which we have
    limited or no experience;
    potential loss of key employees, customers and strategic
    alliances from either our current business or the acquired
    companys business;
    assumption of unanticipated problems or latent liabilities, such
    as problems with the quality of the acquired companys
    products;
    inability to generate sufficient revenue and profitability to
    offset acquisition costs;
    equity-based acquisitions may have a dilutive effect on our
    stock; and
    inability to successfully consummate transactions with
    identified acquisition candidates.    Our
    customers may reduce capital expenditures and have difficulty
    satisfying liquidity needs because of the continued turbulence
    in the U.S. and global economies, resulting in reduced sales of
    our products and harming our financial condition and results of
    operations.
     24




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We
    depend on Hitachi for assistance with our research and
    development efforts. Any failure of Hitachi to provide these
    services could have a material adverse effect on our
    business.
    Hitachi,
    Marubeni and Clarity could collectively control the outcome of
    shareholder actions in our company.
      Business
    disruptions resulting from international uncertainties could
    negatively impact our profitability.
    
    different technical standards or requirements, such as country
    or region-specific requirements to eliminate the use of lead;
    difficulties in staffing, managing and supporting operations in
    more than one country;
    difficulties in enforcing agreements and collecting receivables
    through foreign legal systems;
    fewer legal protections for intellectual property;
    fluctuations in foreign economies;
    fluctuations in the value of foreign currencies and interest
    rates;
    domestic and international economic or political changes,
    hostilities and other disruptions in regions where we currently
    operate or may operate in the future; 25




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
    limitations on travel engendered by the outbreak of diseases,
    such as the avian bird influenza and the swine influenza, and
    any other widespread public health problems; and
    different and changing legal and regulatory requirements in the
    jurisdictions in which we currently operate or may operate in
    the future.    Our
    business and future operating results may be adversely affected
    by events outside of our control.
    Environmental
    laws and regulations may subject us to significant costs and
    liabilities.
    We
    have recently been the target of securities class action
    complaints and are at risk of future securities class action
    litigation. The pending claims or any additional litigation
    could result in substantial costs to us, drain our resources and
    divert our managements time and attention.
  Bixler v. Opnext, Inc., et al. inter
    alia inter alia Coleman v.
    Opnext, Inc., et al. Johnson v. Opnext,
    Inc., et al. No. 3:08-cv-01451),
 26




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Bixler Coleman Johnson Bixler Coleman Johnson No. 08-920
  day-to-day
  A lack
    of effective internal control over financial reporting could
    result in an inability to accurately report our financial
    results, which could lead to a loss of investor confidence in
    our financial reports and have an adverse effect on our stock
    price.
  Form 10-K/A Form 10-K/A Form 10-Q/A
     27




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Our
    financial results may vary significantly from
    quarter-to-quarter
    as the result of a number of factors, which may lead to
    volatility in our stock price.
    
    fluctuations in demand for our products;
    the timing, size and product mix of sales of our products;
    our ability to manufacture and deliver products to our customers
    in a timely and cost-effective manner;
    quality control problems in our manufacturing operations;
    fluctuations in our manufacturing yields;
    length and variability of the sales cycles of our products;
    new product introductions and enhancements by our competitors
    and ourselves;
    changes in our pricing and sales policies or the pricing and
    sales policies of our competitors;
    our ability to develop, introduce and ship new products and
    product enhancements that meet customer requirements in a timely
    manner;
    unanticipated increase in costs and expenses; and
    fluctuations in foreign currency exchange rates.  quarter-to-quarter
 28




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The
    price of our common stock is highly volatile and may continue to
    fluctuate substantially which could result in substantial losses
    for our investors.
    
    actual or anticipated fluctuations in our results of operations;
    variance in our financial performance from the expectations of
    market analysts;
    conditions and trends in the markets we serve;
    announcements of significant new products by us or our
    competitors;
    changes in our pricing policies or the pricing policies of our
    competitors;
    legislation or regulatory policies, practices, or actions;
    the commencement or outcome of litigation;
    our sale of common stock or other securities in the future, or
    sales of our common stock by our principal stockholders;
    changes in market valuation or earnings of our competitors;
    the trading volume of our common stock;
    changes in the estimation of the future size and growth rate of
    our markets;
    general economic conditions; and
    material weaknesses in internal controls.    Certain
    provisions of our corporate governing documents and Delaware Law
    could make an acquisition of our company
    difficult.
    
    authorize the issuance of preferred stock that can be created
    and issued by our board of directors without prior stockholder
    approval, commonly referred to as blank check
    preferred stock, with rights senior to those of our common stock;
    limit the persons who can call special stockholder meetings;
    provide that a supermajority vote of our stockholders is
    required to amend some portions of our amended and restated
    certificate of incorporation and amended and restated bylaws;
    establish advance notice requirements to nominate persons for
    election to our board of directors or to propose matters that
    can be acted on by stockholders at stockholder meetings;
    do not provide for cumulative voting in the election of
    directors; and
    provide for the filling of vacancies on our board of directors
    by action of a majority of the directors and not by the
    stockholders. 29




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Our
    ability to utilize our net operating loss carryforwards to
    offset future taxable income may be limited.
    Item 1B.
    Unresolved
    Staff Comments.    Item 2.
    Properties   30




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Location

Approximate Square Feet

Function

Lease Expiration DateUnited StatesEatontown, New Jersey



26,285



Administration, Sales,
    Marketing


August 23, 2011Fremont, California



30,574



Sales, Manufacturing,
    Research and Development


November 30, 2013Los Gatos, California Building 1



33,290



Administration,
    Manufacturing, Research
    and Development


June 22, 2011Los Gatos, California Building 2



17,473 (of which 6,700 is
    subleased to a third party)



Administration,
    Marketing, Research and
    Development


September 30, 2009
    (sublease end date September 30, 2009)Tulsa, Oklahoma



3513



Research and Development


November 30, 2010InternationalChiyoda-ku, Japan



2,330 (216 square meters)



Sales


June 11, 2010 (unlimited
    automatic 2-year extensions
    unless notice given
    by either party)Komoro, Japan



34,542 (3,209 square
    meters)



Manufacturing, Research
    and Development


March 31, 2011 (automatic
    5-year extensions unless
    notice given by either
    party)Munich, Germany



2,992 (278 square meters)



Sales


October 31, 2011Ottawa, Canada



4,487 (417 square meters)



Research and Development


June 30, 2009Shanghai, China



1,356 (126 square meters)



Sales


November 15, 2010Totsuka, Japan



115,852 (10,763 square meters)



Manufacturing, Research
    and Development


September 30, 2011
    (automatic 1-year
    extensions unless notice
    given by either party)   Item 3.
    Legal
    Proceedings.  Bixler v. Opnext, Inc., et al. inter
    alia inter alia Coleman v. Opnext, Inc., et
    al. Johnson v. Opnext, Inc., et al. No. 3:08-cv-01451),
  Bixler Coleman Johnson Bixler Coleman Johnson No. 08-920
 31




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Item 4.
    Submission
    of Matters to a Vote of Security Holders.      FOR

AGAINST

ABSTAIN47,538,897



324,958



17,322     FOR

WITHHELDMr. Philip Otto


52,681,466



566,065Mr. Charles Abbe


52,689,509



558,022Dr. David Lee


52,546,992



700,539Dr. Naoya Takahashi


52,702,683



544,848     FOR

AGAINST

ABSTAIN42,657,375



5,264,066



4,736     FOR

AGAINST

ABSTAIN46,108,896



1,815,281



2,000     FOR

AGAINST

ABSTAIN53,082,053



158,273



7,205  32




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##### Table of Contents



PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities.    High


LowFiscal 2009 Quarter:January 1, 2009 to March 31, 2009


2.53



1.42October 1, 2008 to December 31, 2008


4.09



1.30July 1, 2008 to September 30, 2008


6.45



4.30April 1, 2008 to June 30, 2008


7.00



4.84Fiscal 2008 Quarter:January 1, 2008 to March 31, 2008


8.70



4.16October 1, 2007 to December 31, 2007


14.81



6.96July 1, 2007 to September 30, 2007


15.42



10.39April 1, 2007 to June 30, 2007


14.85



10.51    33




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Stock
    Performance Graph
      
  2/15/2007


3/31/2007


3/31/2008


3/31/2009Opnext, Inc.



100.00




85.00




31.32




9.83Nasdaq Telecommunications Index



100.00




96.50




92.87




61.31Nasdaq Composite Index



100.00




96.98




91.27




61.21Amex Networking Index



100.00




95.74




84.07




52.82   Dividend
    Policy
   34




---



##### Table of Contents



Stock-Based
    Incentive Plan Information
    Stock Options


SARsWeighted





WeightedAverage





AverageExercise





ExerciseShares


Price


Shares


PriceStock-based incentive plans approved by our stockholders


9,029


$
8.17



582


$
15.00Stock-based incentive plans not approved by our stockholders





$







$
   Repurchases
    of Equity
  24-month
   35




---



##### Table of Contents



Item 6.
    Selected
    Financial Data.  The following consolidated balance sheet data as of
    March 31, 2009 and 2008 and the consolidated statements of
    operations data for the fiscal years ended March 31, 2009,
    2008 and 2007 have been derived from our audited financial
    statements and related notes which are included elsewhere in
    this annual report. The consolidated balance sheet data as of
    March 31, 2007, 2006 and 2005 and the statement of
    operations data for the fiscal years ended March 31, 2006
    and 2005 have been derived from our audited financial statements
    and related notes that do not appear in this annual report. The
    consolidated selected financial data set forth below should be
    read in conjunction with our consolidated financial statements,
    the related notes and Managements Discussion and
    Analysis of Financial Condition and Results of Operations
    included elsewhere in this annual report. The historical results
    are not necessarily indicative of the results to be expected for
    any future period.
  Historical
    Financial Data
  Year Ended March 31,2009


2008


2007


2006


2005(in thousands, except per share data)Consolidated statements of operations data:Sales

$
318,555


$
283,498


$
222,859


$
151,691


$
138,432Cost of sales


242,782



187,123



148,753



120,320



107,694Amortization of acquired developed technology


1,321















Gross margin


74,452



96,375



74,106



31,371



30,73823.4
%


34.0
%


33.3
%


20.7
%


22.2
%Research and development expenses


54,043



38,324



35,615



33,669



33,251Selling, general, and administrative expenses


63,483



48,291



40,231



33,116



33,629Impairment of goodwill


67,681















Acquired in-process research and development expense


15,700















Amortization of purchased intangibles


5,540















Loss on disposal of property and equipment


122



502



311



1,065



50Other operating expenses














399



17Operating (loss) income


(132,117
)


9,258



(2,051
)


(36,878
)


(36,209
)Interest income, net


2,748



8,534



3,298



4,102



2,138Other (expense) income


(187
)


(744
)


(551
)


1,561



52(Loss) income before income taxes


(129,556
)


17,048



696



(31,215
)


(34,019
)Income tax (expense) benefit


(16
)










(278
)


1,275Net (loss) income

$
(129,572
)

$
17,048


$
696


$
(31,493
)

$
(32,744
)Net (loss) income per share:Basic

$
(1.86
)

$
0.26


$
0.01


$
(0.61
)

$
(0.63
)Diluted


(1.86
)


0.26



0.01



(0.61
)


(0.63
)Weighted average number of shares:Basic


69,775



64,598



53,432



51,945



51,873Diluted


69,775



64,633



53,486



51,945



51,873   March 31,2009


2008


2007


2006


2005(in thousands)Consolidated balance sheet data:Total assets

$
449,764


$
432,459


$
367,849


$
215,969


$
291,912Long-term liabilities


26,050



22,192



17,271



7,716



2,245Total shareholders equity


320,537



323,078



290,657



118,652



148,176  36




---



##### Table of Contents



Selected
    Quarterly Financial Information (Unaudited)
  The following table shows our unaudited consolidated
    quarterly statements of operations data for each of the quarters
    in the fiscal years ended March 31, 2009 and 2008. This
    information has been derived from our unaudited financial
    information, which, in the opinion of management, has been
    prepared on the same basis as our audited financial statements
    and includes all adjustments necessary for the fair presentation
    of the financial information for the quarters presented. This
    information should be read in conjunction with the audited
    financial statements and related notes included elsewhere in
    this annual report.
  Three Months EndedMarch 31,


Dec. 31,


Sept. 30,


June 30,2009


2008


2008


2008(in thousands, except per share data)Sales

$
83,626


$
70,533


$
80,159


$
84,237Gross margin


7,288



15,582



24,451



27,131Net (loss) income(1)


(118,831
)


(14,538
)


1,188



2,609Net (loss) income per share:Basic

$
(1.39
)

$
(0.23
)

$
0.02


$
0.04Diluted


(1.39
)


(0.23
)


0.02



0.04Weighted average shares outstanding:Basic


85,527



64,612



64,620



64,623Diluted


85,527



64,612



64,769



64,666     (1)
    
    Net loss for the three months ended March 31, 2009 includes
    $62.0 million of goodwill impairment expense,
    $15.7 million of in-process research and development
    expense, $11.0 million of StrataLight Employee Liquidity
    Bonus Plan expense, $6.9 million of amortization of
    purchased intangibles expense, $1.8 million attributable to
    purchase price accounting adjustments for inventory sold during
    the period, $1.5 million of stock-based compensation
    expense, $1.1 million of restructuring cost,
    $0.5 million of integration cost and $0.1 million of
    litigation expense.Net loss for the three months ended December 31, 2008
    included $5.7 million of goodwill impairment expense,
    $1.6 million of stock-based compensation expense,
    $0.3 million of litigation expense and $0.2 million of
    business acquisition cost.Net income for the three months ended September 30, 2008
    included $1.5 million of stock-based compensation expense
    and $0.7 million of litigation expense.Net income for the three months ended June 30, 2008
    included $1.1 million of stock-based compensation expense.  Three Months EndedMarch 31,


Dec. 31,


Sept. 30,


June 30,2008


2007


2007


2007(in thousands, except per share data)Sales

$
72,684


$
66,408


$
76,579


$
67,827Gross margin


23,899



21,755



26,948



23,773Net income(1)


950



4,255



5,843



6,000Net income per share:Basic

$
0.01


$
0.07


$
0.09


$
0.09Diluted


0.01



0.07



0.09



0.09Weighted average shares outstanding:Basic


64,640



64,627



64,576



64,550Diluted


64,669



64,670



64,627



64,603     (1)
    
    Net income for the three months ended March 31, 2008,
    December 31, 2007, September 30, 2007 and
    June 30, 2007 included $1.0 million,
    $1.3 million, $1.0 million and $0.1 million,
    respectively, of stock-based compensation expense. 37




---



##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  The following discussion relates to our consolidated
    financial statements and should be read in conjunction with the
    financial statements and notes thereto appearing elsewhere in
    this annual report. Statements contained in this
    Managements Discussion and Analysis of Financial
    Condition and Results of Operations that are not
    historical facts may be forward-looking statements. Such
    statements are subject to certain risks and uncertainties, which
    could cause actual results to differ materially from the
    forward-looking statement. Although the information is based on
    our current expectations, actual results could vary from
    expectations stated in this report. Numerous factors will affect
    our actual results, some of which are beyond our control. These
    include the breadth and duration of the current economic
    recession and its impact on our customers, the strength of
    telecommunications and data communications markets, competitive
    market conditions, interest rate levels, volatility in our stock
    price, and capital market conditions. You are cautioned not to
    place undue reliance on this information, which speaks only as
    of the date of this annual report. We assume no obligation to
    update publicly any forward-looking information, whether as a
    result of new information, future events or otherwise, except to
    the extent we are required to do so in connection with our
    ongoing requirements under federal securities laws to disclose
    material information. For a discussion of important risks
    related to our business, and related to investing in our
    securities, including risks that could cause actual results and
    events to differ materially from results and events referred to
    in the forward-looking information, see Item 1A: Risk
    Factors and the discussion under the captions
     Factors That May Influence Future Results of
    Operations and  Liquidity and Capital
    Resources below. In light of these risks, uncertainties
    and assumptions, the forward-looking events discussed in this
    report might not occur.
  Overview
    and Background
    Acquisition
    of StrataLight
    Sales
   38




---



##### Table of Contents



Cost
    of Sales and Gross Margin
        Research
    and Development Expense
   39




---



##### Table of Contents



Selling,
    General and Administrative Expenses
    Impairment
    of Goodwill
    Inventory
    Factors
    That May Influence Future Results of Operations
  Global
    Economic Conditions
    Cost
    Reduction Actions
   40




---



##### Table of Contents



Sales
      Cost
    of Sales
    Research
    and Development Expense
    Selling,
    General and Administrative Expense
   41




---



##### Table of Contents



Significant
    Accounting Policies and Estimates
  Revenue
    Recognition, Warranties and Allowances
            Inventory
    Valuation
  first-in, work-in-process
  Income
    Taxes
   42




---



##### Table of Contents



Impairment
    of Long-Lived Assets
  Accounting for Impairment of
    Long-Lived Assets
  Goodwill
    and Business Combinations
  Business Combinations Goodwill and Other Intangible
    Assets
   43




---



##### Table of Contents



Stock-Based
    Incentive Plans
  Share-Based Payment
    
    The time period our stock-based awards are expected to remain
    outstanding has been determined based on the average of the
    original award period and the remaining vesting period in
    accordance with the SECs Staff Accounting
    Bulletin 107 simplified method. Our expected term
    assumption for awards issued during the years ended
    March 31, 2009, 2008 and 2007 was 4.9 years,
    6.25 years and 6.25 years, respectively. As additional
    evidence develops from our option activity, the expected term
    assumption may be refined to capture more relevant trends.
    Through December 31, 2007, the future volatility of our
    stock was estimated based on the median calculated value of the
    historical volatility of companies believed to have similar
    market performance characteristics to ours. Use of comparable
    companies was necessary during this period since we did not
    possess a sufficient stock price history. Subsequent to
    December 31, 2007, we estimated volatility based on our
    historical stock prices. The expected volatility assumption for
    awards issued during the years ended March 31, 2009, 2008
    and 2007 was 83.5%, 88.1% and 99.3%, respectively.
    A dividend yield of zero has been assumed for awards issued
    during the years ended March 31, 2009, 2008 and 2007 based
    on our actual past experience and the fact that we do not
    anticipate paying a dividend on our shares in the near future.
    We have based our risk-free interest rate assumption for awards
    issued during the years ended March 31, 2009, 2008 and 2007
    on the implied weighted-average yields of 2.3%, 4.5% and 4.8%,
    respectively, available on U.S. Treasury zero-coupon issues
    with an equivalent expected term.
    Forfeiture rates for awards issued during the years ended
    March 31, 2009, 2008, and 2007 have been estimated based on
    our actual historical forfeiture trends of approximately 10%
    over their expected terms.  Use of
    Estimates
   44




---



##### Table of Contents



Results
    of Operations for the Years Ended March 31, 2009, 2008 and
    2007
    Year Ended March 31,


Year Ended March 31,2009


2008


2007


2009


2008


2007(in thousands)


(as percentage of sales)Sales

$
318,555


$
283,498


$
222,859



100.0
%


100.0
%


100.0
%Cost of sales


242,782



187,123



148,753



76.2
%


66.0
%


66.7
%Amortization of acquired developed technology


1,321











0.4
%






Gross margin


74,452



96,375



74,106



23.4
%


34.0
%


33.3
%Research and development expenses


54,043



38,324



35,615



17.0
%


13.5
%


16.0
%Selling, general and administrative expenses


63,483



48,291



40,231



19.9
%


17.0
%


18.1
%Impairment of goodwill


67,681











21.3
%






Acquired in-process research and development


15,700











4.9
%






Amortization of purchased intangibles


5,540











1.7
%






Loss on disposal of property and equipment


122



502



311



0.0
%


0.2
%


0.1
%Operating (loss) income


(132,117
)


9,258



(2,051
)


(41.5
)%


3.3
%


(0.9
)%Interest income, net


2,748



8,534



3,298



0.9
%


3.0
%


1.5
%Other expense, net


(187
)


(744
)


(551
)


(0.1
)%


(0.3
)%


(0.2
)%(Loss) income before income taxes


(129,556
)


17,048



696



(40.7
)%


6.0
%


0.3
%Income tax expense


(16
)










(0.0
)%






Net (loss) income

$
(129,572
)

$
17,048


$
696



(40.7
)%


6.0
%


0.3
%   Comparison
    of the Years Ended March 31, 2009 and 2008
  Sales.
    Gross Margin.
 45




---



##### Table of Contents



Research and Development Expenses.
  Selling, General and Administrative
    Expenses.
  Impairment of Goodwill.
    Acquired In-process Research and
    Development.
  Amortization of Purchased
    Intangibles.
 46




---



##### Table of Contents



Loss on Disposal of Property and
    Equipment.
  Interest Income, Net.
  Other (Expense) Income, Net.
  Income Taxes
  Comparison
    of the Years Ended March 31, 2008 and 2007
  Sales.
    Gross Margin.
   47




---



##### Table of Contents



Research and Development Expenses.
  Selling, General and Administrative
    Expenses.
  Loss on Disposal of Property and
    Equipment.
  Interest Income, Net.
  Other (Expense) Income, Net.
  Income Taxes.
  Liquidity
    and Capital Resources
   48




---



##### Table of Contents



Contractual
    Obligations
    LessThan








More ThanTotal


1 Year


1-3 Years


3-5 Years


5 YearsCapital lease obligations

$
32.8


$
11.4


$
17.2


$
4.2


$
Operating lease obligations


6.8



3.5



2.7



0.6



Purchase obligations


64.4



64.4











Short-term debt


20.2



20.2











Total

$
124.2


$
99.5


$
19.9


$
4.8


$
    49




---



##### Table of Contents



Off-Balance
    Sheet Arrangements
    Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk.               50




---



##### 



Item 8.
    Financial
    Statements and Supplementary Data.  OPNEXT,
    INC.
  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
 PageReport of Independent Registered Public
    Accounting Firm on Financial Statements


51Consolidated Balance Sheets at March 31,
    2009 and March 31, 2008


52Consolidated Statements of Operations for the
    fiscal years ended March 31, 2009, 2008 and 2007


53Consolidated Statements of Shareholders
    Equity and Comprehensive Income (Loss) for the fiscal years
    ended March 31, 2009, 2008 and 2007


54Consolidated Statements of Cash Flows for the
    fiscal years ended March 31, 2009, 2008 and 2007


55Notes to Consolidated Financial Statements


56   51




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm on Financial
    Statements               ERNST &
    YOUNG LLP
    52




---



##### Table of Contents



Opnext,
    Inc.
  Consolidated
    Balance Sheets
  March 31,2009


2008(in thousands, except share and per share amounts)ASSETSCurrent assets:Cash and cash equivalents, including $6,328 and $887 of
    restricted cash at March 31, 2009 and 2008, respectively

$
168,909


$
221,686Trade receivables, net, including $3,483 and $5,811 due from
    related parties at March 31, 2009 and 2008, respectively


63,961



55,443Inventories


101,610



90,297Prepaid expenses and other current assets


3,708



3,639Total current assets


338,188



371,065Property, plant, and equipment, net


71,966



55,488Purchased intangibles


39,239



Goodwill






5,698Other assets


371



208Total assets

$
449,764


$
432,459LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Trade payables, including $6,052 and $8,353 due to related
    parties at March 31, 2009 and 2008, respectively

$
38,356


$
45,531Accrued expenses


33,190



14,184Short-term debt


20,243



20,060Capital lease obligations


11,388



7,414Total current liabilities


103,177



87,189Capital lease obligations


21,402



18,843Other long-term liabilities


4,648



3,349Total liabilities


129,227



109,381Commitments and contingenciesShareholders equity:Preferred stock, par value $0.01 per share: 15,000,000
    authorized, no shares issued and outstanding






Common stock, par value $0.01 per share: authorized
    150,000,000 shares; issued 91,130,377, outstanding
    88,656,447, net of 51,508 shares of treasury stock at
    March 31, 2009; issued and outstanding 64,619,913, net of
    20,937 shares of treasury stock at March 31, 2008


730



552Additional paid-in capital


708,588



583,766Accumulated deficit


(394,632
)


(265,060
)Accumulated other comprehensive income


5,851



3,820Total shareholders equity


320,537



323,078Total liabilities and shareholders equity

$
449,764


$
432,459    53




---



##### Table of Contents



Opnext,
    Inc.
  Consolidated
    Statements of Operations
  Year Ended March 31,2009


2008


2007(in thousands, except per share amounts)Sales, including $19,470, $8,925 and $9,671 to related parties
    for the years ended March 31, 2009, 2008 and 2007,
    respectively

$
318,555


$
283,498


$
222,859Cost of sales


242,782



187,123



148,753Amortization of acquired developed technology


1,321







Gross margin


74,452



96,375



74,106Research and development expenses, including $6,077, $5,225 and
    $4,403 from related parties for the years ended March 31,
    2009, 2008 and 2007, respectively


54,043



38,324



35,615Selling, general and administrative expenses, including $5,493,
    $5,515 and $4,557 from related parties for the years ended
    March 31, 2009, 2008 and 2007, respectively


63,483



48,291



40,231Impairment of goodwill


67,681







Acquired in-process research and development


15,700







Amortization of purchased intangibles


5,540







Loss on disposal of property and equipment


122



502



311Operating (loss) income


(132,117
)


9,258



(2,051
)Interest income, net


2,748



8,534



3,298Other expense, net


(187
)


(744
)


(551
)(Loss) income before income taxes


(129,556
)


17,048



696Income tax expense


(16
)






Net (loss) income

$
(129,572
)

$
17,048


$
696Net (loss) income per share:Basic

$
(1.86
)

$
0.26


$
0.01Diluted

$
(1.86
)

$
0.26


$
0.01Weighted average number of shares used in computing net (loss)
    income per shareBasic


69,775



64,598



53,432Diluted


69,775



64,633



53,486    54




---



##### Table of Contents



Opnext,
    Inc.
  Consolidated
    Statements of Shareholders Equity and Comprehensive Income
    (Loss)
 Years
    ended March 31, 2009, 2008 and 2007
  Class A


Class BCommon Stock


Common Stock


Common StockNumber


Par


Number


Par


Number


Parof Shares


Value


of Shares


Value


of Shares


Value(in thousands, except share and per share amounts)Balance at March 31, 2006


49,999,999


$
500



1,985,457


$
20






$
Conversion of common stock


(49,999,999
)


(500
)


(1,985,457
)


(20
)


51,985,456



520Stock-based compensationStock options exercised


















27,238



Net proceeds from initial public offering


















12,536,406



125Net incomeForeign currency translation adjustmentTotal comprehensive incomeBalance at March 31, 2007





$







$




64,549,100


$
645Stock-based compensation, net of forfeitures


















70,177Stock options exercised


















21,573



1Amendment of stock appreciation rightsRestricted shares repurchased


















(20,937
)


(94
)Initial public offering costsNet incomeUnrealized gain on foreign currency forward contractDefined benefit plan costs, netForeign currency translation adjustmentTotal comprehensive incomeBalance at March 31, 2008





$







$




64,619,913


$
552Stock-based compensation, net of forfeituresStock options exercised


















3,934



Restricted shares forfeited


















(8,333
)


Restricted shares repurchased


















(30,571
)


(63
)Equity offering to StrataLight shareholders, net


















22,298,161



223StrataLight Employee Liquidity Bonus Plan


















1,773,343



18Net incomeUnrealized loss on foreign currency forward contractDefined benefit plan costs, netForeign currency translation adjustmentTotal comprehensive incomeBalance at March 31, 2009





$







$




88,656,447


$
730  55




---



##### Table of Contents



Retained


AccumulatedAdditional


Earnings


OtherUnearned


Paid-In


(Accumulated


Comprehensive


Shareholders


ComprehensiveCompensation


Capital


Deficit)


Income (Loss)


Equity


Income (Loss)(in thousands, except share and per share amounts)Balance at March 31, 2006

$
(1
)

$
406,124


$
(282,804
)

$
(5,187
)

$
118,652Conversion of common stock


















Stock-based compensation


1



229











230Stock options exercised






46











46Net proceeds from initial public offering






170,858











170,983Net income










696







696


$
696Foreign currency translation adjustment














50



50



50Total comprehensive income





















$
746Balance at March 31, 2007

$



$
577,257


$
(282,108
)

$
(5,137
)

$
290,657Stock-based compensation, net of forfeitures






4,160











4,160Stock options exercised






22











23Amendment of stock appreciation rights






2,432











2,432Restricted shares repurchased


















(94
)Initial public offering costs






(105
)










(105
)Net income










17,048







17,048


$
17,048Unrealized gain on foreign currency forward contract














85



85



85Defined benefit plan costs, net














(254
)


(254
)


(254
)Foreign currency translation adjustment














9,126



9,126



9,126Total comprehensive income





















$
26,005Balance at March 31, 2008

$



$
583,766


$
(265,060
)

$
3,820


$
323,078Stock-based compensation, net of forfeitures






5,705











5,705Stock options exercised






6











6Restricted shares forfeited


















Restricted shares repurchased


















(63
)Equity offering to StrataLight shareholders, net






113,336











113,559StrataLight Employee Liquidity Bonus Plan






5,775











5,793Net income










(129,572
)






(129,572
)

$
(129,572
)Unrealized loss on foreign currency forward contract














(145
)


(145
)


(145
)Defined benefit plan costs, net














65



65



65Foreign currency translation adjustment














2,111



2,111



2,111Total comprehensive income





















$
(127,541
)Balance at March 31, 2009

$



$
708,588


$
(394,632
)

$
5,851


$
320,537    56




---



##### Table of Contents



Opnext,
    Inc.
  Consolidated
    Statements of Cash Flows
  Year Ended March 31,2009


2008


2007(in thousands)Cash flows from operating activitiesNet (loss) income

$
(129,572
)

$
17,048


$
696Adjustments to reconcile net (loss) income to net cash (used in)
    provided by operating activities:Impairment of goodwill


67,681







In-process research and development


15,700







Depreciation and amortization


14,385



10,615



10,305Amortization of purchased intangibles


6,861







Compensation expense associated with the StrataLight Employee
    Liquidity Bonus Plan


5,766







Compensation expense associated with stock option issuances


5,644



3,337



3,552Loss on disposal of property and equipment


122



502



311Changes in assets and liabilities, net of acquisition of
    business:Trade receivables, net


(4,374
)


3,134



(17,155
)Inventories


23,046



(18,741
)


(17,555
)Prepaid expenses and other current assets


(454
)


(452
)


(1,184
)Other assets


(163
)


(2
)


(12
)Trade payables


(16,939
)


(2,492
)


15,250Accrued expenses and other liabilities


1,871



(1,424
)


1,760Net cash (used in) provided by operating activities


(10,426
)


11,525



(4,032
)Cash flows from investing activitiesCapital expenditures


(4,157
)


(5,071
)


(3,142
)Acquisition of business, net of cash acquired


(28,425
)






Net cash used in investing activities


(32,582
)


(5,071
)


(3,142
)Cash flows from financing activitiesShort-term debt borrowings (payments), net






20,060



(50,892
)Payments on capital lease obligations


(9,105
)


(5,452
)


(2,464
)Exercise of stock options


6



23



46Net proceeds from initial public offering






(105
)


170,983Restricted shares repurchased


(63
)


(94
)


Net cash (used in) provided by financing activities


(9,162
)


14,432



117,673Effect of foreign currency exchange rates on cash and cash
    equivalents


(607
)


1,014



(71
)(Decrease) increase in cash and cash equivalents


(52,777
)


21,900



110,428Cash and cash equivalents at beginning of year


221,686



199,786



89,358Cash and cash equivalents at end of year

$
168,909


$
221,686


$
199,786Supplemental cash flow informationCash paid during the year for:Interest

$
965


$
435


$
531Income taxes










Supplemental investing activitiesNet cash paid for acquisition of StrataLight

$
21,593


$



$
Payments for acquisition and equity registration costs

$
6,832


$



$
Acquisition of StrataLight, net of cash acquired

$
28,425


$



$
Non-cash financing activitiesCapital lease obligations incurred

$
(15,384
)

$
(11,825
)

$
(10,265
)    57




---



##### Table of Contents



Opnext,
    Inc.
  Notes
    to Consolidated Financial Statements
 (in
    thousands, except per share amounts)
  1.
    Background
    and Basis of Presentation            2.
    Summary
    of Significant Accounting Policies  Principles
    of Consolidation
    Use of
    Estimates
   58




---



##### Table of Contents



Opnext,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except per share amounts)
  Revenue
    Recognition
        Warranties
    Research
    and Development Costs
    Shipping
    and Handling Costs
    Foreign
    Currency Transactions and Translation
     59




---



##### Table of Contents



Opnext,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except per share amounts)
    Accounting for Derivative Instruments and Hedging Activities,
    as amended by SFAS No. 149, Amendment of Statement 133
    on Derivative Instruments and Hedging Activities.
    Net
    Income (Loss) per Common Share
  Earnings Per Share
  Cash
    and Cash Equivalents
    Trade
    Receivables
    Inventories
  first-in, work-in-process
 60




---



##### Table of Contents



Opnext,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except per share amounts)
      Property,
    Plant, and Equipment and Internal Use Software
      98-1, Accounting for the Costs of Computer Software Developed or
    Obtained for Internal Use
  Impairment
    of Long-Lived Assets
  Accounting for
    Impairment of Long-Lived Assets
 61




---



##### Table of Contents



Opnext,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except per share amounts)
  Goodwill
    and Business Combinations
  Business Combinations Goodwill and Other Intangible Assets
    Income
    Taxes
      Fair
    Value Measurements
  Fair Value
    Measurements
  SFAS No. 157-2, Effective Date of FASB Statement No. 157
   62




---



##### Table of Contents



Opnext,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except per share amounts)
    
    Level 1  Valuations based on quoted prices in
    active markets for identical assets or liabilities that the
    Company has the ability to access. Valuation adjustments and
    block discounts are not applied to Level 1 instruments.
    Because valuations are based on quoted prices that are readily
    and regularly available in an active market, valuation of these
    instruments does not entail a significant degree of judgment.
    Level 2  Valuations based on quoted prices in
    markets that are not active or for which all significant inputs
    are observable, either directly or indirectly. Valuations for
    Level 2 assets are prepared on an individual asset basis
    using data obtained from recent transactions for identical
    securities in inactive markets or pricing data from similar
    assets in active and inactive markets.
    Level 3  Valuations based on inputs that are
    unobservable and significant to the overall fair value
    measurement.    Quoted Market





SignificantValue as of


Prices in Active


Significant Other


UnobservableMarch 31,


Markets


Observable Inputs


Inputs


Balance Sheet2009


(Level 1)


(Level 2)


(Level 3)


ClassificationAssets:Money market funds

$
134,774


$
134,774


$



$



Cash and cash equivalentsLiabilities:Forward foreign currency exchange contracts

$
60


$



$
60


$



Accrued expenses     Stock-Based
    Incentive Plans
  Share-Based
    Payment
    
    The time period that stock-based awards are expected to remain
    outstanding has been determined based on the average of the
    original award period and the remaining vesting period in
    accordance with the SECs short-cut approach pursuant to
    SAB No. 107, Disclosure About Fair Value of
    Financial Statements. 63




---



##### Table of Contents



Opnext,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except per share amounts)
   
    The future volatility of the Companys stock from
    April 1, 2007 through December 31, 2007 was estimated
    based on the median calculated value of the historical
    volatility of companies believed to have similar market
    performance characteristics as those of the Company. Use of
    comparable companies was necessary during this period since the
    Company did not possess a sufficient stock price history. Since
    December 31, 2007, the Company has estimated volatility
    based on the Companys historical stock prices.
    A dividend yield of zero has been assumed for all issued awards
    based on the Companys actual past experience and the fact
    that Company does not anticipate paying a dividend on its shares
    in the near future.
    The Company has based its risk-free interest rate assumption for
    awards on the implied yield currently available on
    U.S. Treasury zero-coupon issues with a remaining term
    equal to the expected term of the award.
    The forfeiture rate for awards was based on the Companys
    actual historical forfeiture trend.  96-18, Accounting for Equity Instruments That Are Issued to Other
    Than Employees for Acquiring, or in Conjunction with Selling
    Goods or Services
  3.
    Business
    Combinations       64




---



##### Table of Contents



Opnext,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except per share amounts)
    Fair Value of Opnext shares

$
114,167Cash consideration


40,275Acquisition related transaction costs


6,224Acquisition related employee bonus costs


27Total purchase price

$
160,693       Tangible assets acquired and liabilities assumed:Cash and short-term investments

$
18,682Inventories


30,400Other current assets


6,707Fixed assets


10,635Other non-current assets


59Accounts payable and accrued liabilities


(29,518
)Other non-current liabilities


(55
)Net tangible assets


36,910Identifiable intangible assets


46,100In process research and development


15,700Goodwill


61,983Total purchase price

$
160,693     Pro Forma Basis for Fiscal Years Ended2009


2008Sales

$
409,416


$
378,714Net income


(52,517
)


(107,971
)Net loss per share-basic

$
(0.58
)

$
(1.23
)Net loss per share-diluted

$
(0.58
)

$
(1.23
)    65




---



##### Table of Contents



Opnext,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except per share amounts)
      4.
    Restructuring
    Charges  Accounting for Costs Associated with
    Exit or Disposal Activities
  5.
    Inventories    March 31,2009


2008Raw materials

$
61,132


$
48,867Work-in-process


10,791



11,048Finished goods


29,687



30,382Inventories

$
101,610


$
90,297     6.  Property,
    Plant, and Equipment
    March 31,2009


2008Machinery, electronic, and other equipment

$
224,854


$
214,021Computer software


16,815



11,943Building improvements


5,830



5,439Construction-in-progress


9,489



1,646Total property, plant, and equipment


256,988



233,049Less accumulated depreciation and amortization


(185,022
)


(177,561
)Property, plant, and equipment, net

$
71,966


$
55,488    66




---



##### Table of Contents



Opnext,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except per share amounts)
  7.
    Intangible
    Assets and Goodwill      Gross Carrying


Accumulated


Net CarryingAmount


Amortization


AmountDeveloped product research

$
28,900


$
(1,321
)

$
27,579Order backlog


13,100



(5,228
)


7,872Customer relationships


4,100



(312
)


3,788Total intangible assets

$
46,100


$
(6,861
)

$
39,239     AmountYear Ended March 31,2010

$
15,0192011


7,1472012


6,8342013


5,7802014


4,459Total

$
39,239      67




---



##### Table of Contents



Opnext,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except per share amounts)
        8.
    Income
    Taxes    Year Ended March 31,2009


2008


2007United States

$
(120,665
)

$
(5,873
)

$
(7,850
)Foreign


(8,891
)


22,921



8,546(Loss) income before income taxes

$
(129,556
)

$
17,048


$
696       Year Ended March 31,2009


2008


2007U.S. federal statutory income tax rate


(35.0
)%


35.0
%


35.0
%State and local income taxes, net of federal income tax effect


(5.0
)


(1.8
)


(52.1
)Foreign earnings taxed at different rates


(0.3
)


7.5



71.8Change in valuation allowance


(1.6
)


(45.0
)


(270.6
)Goodwill impairment


21.2







Expired net operating loss carryforwards


15.6







Stock-based compensation






0.1



188.6Other


5.1



4.2



27.3Effective income tax rate


0.0
%


0.0
%


0.0
%  68




---



##### Table of Contents



Opnext,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except per share amounts)
  ,
    Accounting for Uncertainty in Income Taxes, an interpretation of
    FASB Statement 109
        March 31,2009


2008Net deferred income tax assets:Net operating loss, capital loss and credit carryforwards

$
208,277


$
186,597Inventory and other reserves


36,029



23,142Non-employee stock option expense to related parties


9,387



9,387Stock based compensation


4,191



1,175Purchased intangibles and goodwill


(15,988
)


10,375Capital leases and property, plant, and equipment


(2,605
)


(2,508
)Other


(1,027
)


293Valuation allowance


(238,264
)


(228,461
)Total net deferred tax assets

$



$
      69




---



##### Table of Contents



Opnext,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except per share amounts)
      9.
    Stockholders
    Equity      24-month
      10.
    Net
    Income (Loss) Per Share   70




---



##### Table of Contents



Opnext,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except per share amounts)
    Year Ended March 31,2009


2008


2007Numerator:Net (loss) income, basic and diluted

$
(129,572
)

$
17,048


$
696Denominator:Weighted average shares outstanding  basic


69,775



64,598



53,432Effect of potentially dilutive options






35



54Weighted average shares outstanding  diluted


69,775



64,633



53,486Basic net (loss) income per share

$
(1.86
)

$
0.26


$
0.01Diluted net (loss) income per share

$
(1.86
)

$
0.26


$
0.01     Year Ended March 31,2009


2008


2007Stock options


9,029



5,548



4,387Stock appreciation rights


543



546



664Restricted stock units and other


133







Total


9,705



6,094



5,051   11.
    Accumulated
    Other Comprehensive Income (Loss)    Year Ended March 31,2009


2008Unrealized (loss) gain on foreign currency forward contract


(60
)


85Defined benefit plan costs, net


(189
)


(254
)Foreign currency translation adjustment


6,100



3,989Accumulated other comprehensive income

$
5,851


$
3,820   12.
    Employee
    Benefits   71




---



##### Table of Contents



Opnext,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except per share amounts)
        Year Ended March 31,2009


2008


2007Pension benefit:Service cost

$
831


$
620


$
611Interest cost


58



33



21Amortization of prior service cost


50



60



65Net pension plan cost

$
939


$
713


$
697Weighted average assumptions used to determine net pension
    plan cost:Discount rate


2.00
%


2.00
%


2.00
%Salary increase rate


3.1
%


3.1
%


3.1
%Expected residual active life


15.9 years



15.9 years



15.9 years     Year Ended March 31,2009


2008Change in benefit obligation:Benefit obligation at beginning of period

$
2,942


$
1,598Service cost


831



620Interest cost


58



33Realized actuarial loss


28



326Benefits paid


(67
)


(59
)Foreign currency translation


36



424Benefit obligation at end of period

$
3,828


$
2,942Amount recognized in the consolidated balance sheet:Accrued liabilities

$
57


$
105Other long-term liabilities


3,771



2,837Net amount recognized at end of fiscal year

$
3,828


$
2,942Amounts recognized in accumulated other comprehensive
    loss:Net unrealized actuarial gain

$
190


$
174Prior service cost


(379
)


(428
)Accumulated other comprehensive loss at end of fiscal year

$
(189
)

$
(254
)  72




---



##### Table of Contents



Opnext,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except per share amounts)
      13.
    Stock-Based
    Incentive Plans    Restricted
    Stock
      Weighted





AverageRestricted


Average


Aggregate


RemainingStock


Exercise


Intrinsic


VestingUnits


Price


Value


Period(per share)





(in years)Balance at March 31, 2007





$
Granted


22



8.99Forfeited


(6
)


10.14Converted






Balance at March 31, 2008


16


$
9.46Granted


126



2.16Converted






Balance at March 31, 2009


142


$
2.96


$
243



0.8      73




---



##### Table of Contents



Opnext,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except per share amounts)
  Stock
    Options
  EITF 96-18
      2009


2008


2007Expected term (in years)


4.90



6.25



6.25Volatility


83.5
%


88.1
%


99.3
%Risk-free interest rate


2.3
%


4.5
%


4.8
%Dividend yield










Forfeiture rate


10.0
%


10.0
%


10.0
%    74




---



##### Table of Contents



Opnext,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except per share amounts)
    Weighted





AverageAverage


Aggregate


RemainingExercise


Intrinsic


ContractualShares


Price


Value


Life(per share)





(in years)Balance at March 31, 2006


4,437


$
14.71Granted


90



15.00Forfeited


(29
)


11.67Exercised


(27
)


1.64Balance at March 31, 2007


4,471


$
14.81Granted


1,165



10.91Forfeited


(217
)


14.52Exercised


(21
)


0.99Balance at March 31, 2008


5,398


$
14.04Granted


5,093



3.69Cancelled


(38
)


11.34Forfeited


(180
)


10.12Expired


(1,240
)


14.96Exercised


(4
)


3.93Balance at March 31, 2009


9,029


$
8.17


$
80



6.4Options exercisable at March 31, 2009


3,419


$
13.79


$
28



3.3     Options Outstanding


Options ExercisableWeighted


Weighted





Weighted


WeightedAverage


Average





Average


AverageNumber


Remaining


Exercise


Number


Remaining


ExerciseRange of Exercise Prices

Outstanding


Life


Price


Exercisable


Life


Price(in years)








(in years)$0.78 - $1.68


1,965



8.8


$
1.67



223



3.0


$
1.59$1.74 - $2.73


678



9.3



2.28



9



4.2



2.73$4.47 - $8.89


2,727



7.1



5.95



69



8.7



8.58$11.34 - $15.00


3,659



3.7



14.40



3,118



3.0



14.81Total


9,029











3,419   Stock
    Appreciation Rights (SAR) Plan
   75




---



##### Table of Contents



Opnext,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except per share amounts)
          Cash Settlement


Stock Settlement


Total SARsWeighted





Weighted





WeightedAverage





Average





AverageExercise





Exercise





ExerciseShares


Price


Shares


Price


Shares


PriceBalance at March 31, 2006


669


$
15.00






$




669


$
15.00Granted


52



15.00











52



15.00Forfeited


(54
)


15.00











(54
)


15.00Exercised


(3
)


15.00











(3
)


15.00Balance at March 31, 2007


664


$
15.00






$




664


$
15.00Amended stock appreciation rights


(553
)


15.00



553



15.00







Forfeited


(22
)


15.00



(7
)


15.00



(29
)


15.00Balance at March 31, 2008


89


$
15.00



546


$
15.00



635


$
15.00Forfeited


(50
)


15.00



(3
)


15.00



(53
)


15.00Balance at March 31, 2009


39


$
15.00



543


$
15.00



582


$
15.00   14.
    Short-Term
    Debt     76




---



##### Table of Contents



Opnext,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except per share amounts)
    15.
    Concentrations
    of Risk      16.
    Commitments
    and Contingencies    Capital


OperatingLeases


LeasesYear ending March 31:2010

$
12,328


$
3,4922011


11,516



1,8352012


6,716



8402013


4,092



3642014


222



248Total minimum lease payments


34,874


$
6,779Less amount representing interest


(2,084
)Present value of capitalized payments


32,790Less current portion


(11,388
)Long-term portion

$
21,402    77




---



##### Table of Contents



Opnext,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except per share amounts)
    Year Ended March 31,2009


2008


2007Beginning balance

$
1,655


$
610


$
551Acquisition of StrataLight


11,253







Warranty expense


3,482



1,812



592Claims processed


(4,613
)


(1,003
)


(525
)Foreign currency translation and other


145



236



(8
)Ending balance

$
11,922


$
1,655


$
610   Bixler v. Opnext, Inc., et al. inter alia inter alia Coleman v. Opnext, Inc., et al. Johnson v.
    Opnext, Inc., et al. No. 3:08-cv-01451),
  Bixler Coleman Johnson Bixler Coleman Johnson No. 08-920
    17.
    Related-Party
    Transactions   78




---



##### Table of Contents



Opnext,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except per share amounts)
      Opnext
    Japan, Inc. Related Party Agreements
    Sales
    Transition Agreement
    Intellectual
    Property License Agreements
  paid-up, paid-up,
  paid-up, paid-up,
  Opnext
    Japan Research and Development Agreement
   79




---



##### Table of Contents



Opnext,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except per share amounts)
    Opnext
    Research and Development Agreement
  and/or
    Preferred
    Provider and Procurement Agreements
    Raw
    Materials Supply Agreement
    Outsourcing
    Agreement
   80




---



##### Table of Contents



Opnext,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except per share amounts)
  Secondment
    Agreements
    Lease
    Agreements
    Trademark
    Indication Agreements
    OPD
    Related Party Agreements
    Intellectual
    Property License Agreement
    Secondment
    Agreements
   81




---



##### Table of Contents



Opnext,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except per share amounts)
  Lease
    Agreement
    18.
    Operating
    Segments and Geographic Information  Operating
    Segments
    Geographic
    Information
  Year Ended March 31,2009


2008


2007Sales:North America

$
158,530


$
166,386


$
123,026Europe


86,019



64,501



58,183Japan


42,996



35,194



30,222Asia Pacific


31,010



17,417



11,428Total

$
318,555


$
283,498


$
222,859     March 31,2009


2008Assets:North America

$
304,029


$
266,056Japan


126,503



148,068Europe


19,232



18,335Total

$
449,764


$
432,459     19.
    Valuation
    and Qualifying Accounts  Allowance
    for Doubtful Accounts
  Year Ended March 31,2009


2008


2007Beginning balance

$
335


$
491


$
293Charge (reduction) to expense


718



(175
)


213Deduction and write offs






(23
)


(48
)Foreign currency translation and other


(31
)


42



33Ending balance

$
1,022


$
335


$
491  82




---



##### Table of Contents



Opnext,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in
    thousands, except per share amounts)
  Tax
    Valuation Allowance
  Year Ended March 31,2009


2008


2007Beginning balance

$
228,461


$
208,495


$
212,782Changes in valuation allowance


7,757



(9,519
)


(4,225
)Foreign currency translation


1,361



29,485



(62
)Ending balance

$
237,579


$
228,461


$
208,495   20.
    Subsequent
    Events  Stock
    Option Grants
   83




---



##### Table of Contents



Item 9
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure.    Item 9A
    Controls
    and Procedures.  Evaluation
    of Disclosure Controls and Procedures.
    Rules 13a-15(e) 15d-15(e)) Rules 13(a)-15 15d-15.
    Managements
    Annual Report on Internal Controls over Financial
    Reporting
  Rules 13a-15(f) 15d-15(f). Internal Control 
    Integrated Framework.
 84




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
 on Internal Control Over Financial Reporting
                   ERNST &
    YOUNG LLP
    85




---



##### Table of Contents



Changes
    in internal control over financial reporting
  Rule 13a-15(f)
  Item 9B
    Other.    PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance.    Item 11.
    Executive
    Compensation.    Item 12.
    Security
    Ownership of Certain Beneficial Owners, Management and Related
    Stockholders Matters.    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence.    Item 14.
    Principal
    Accountant Fees and Services.   PART IV  Item 15.
    Exhibit
    and Financial Statement Schedules.  All financial statements. Form 10-K.
  Financial statement schedules. Form 10-K.
  Exhibits.
 86




---



##### Table of Contents



Exhibit Index
  ExhibitNo.

Description of Document3
.1

Form of Amended and Restated Certificate of Incorporation of
    Opnext, Inc.(1)3
.2

Form of Amended and Restated Bylaws of Opnext, Inc.(1)3
.3

Specimen of stock certificate for common stock.(1)4
.1

Pine Stockholder Agreement, dated as of June 4, 2003, by
    and among Opnext, Inc. and the Stockholders of Pine Photonics
    Communications, Inc.(1)4
.2

Registration Rights Agreement, entered into as of July 31,
    2001, by and among Opnext, Inc., Clarity Partners, L.P., Clarity
    Opnext Holdings I, LLC, Clarity Opnext Holdings II, LLC,
    and Hitachi, Ltd.(1)4
.3

Stockholders Agreement, dated as of July 31, 2001,
    between Opnext, Inc. and each of Hitachi, Ltd., Clarity
    Partners, L.P., Clarity Opnext Holdings I, LLC and Clarity
    Opnext Holdings II, LLC, as amended.(1)10
.1+

Pine Photonics Communications, Inc. 2000 Stock Plan.(1)10
.2+

Form of Pine Photonics Communications, Inc. 2000 Stock Plan:
    Stock Option Agreement.(1)10
.3+

Opnext, Inc. 2001 Long-Term Stock Incentive Plan.(1)10
.4+

Form of Opnext, Inc. 2001 Long-Term Stock Incentive Plan,
    Nonqualified Stock Option Agreement.(1)10
.4a+

Form of Opnext, Inc. 2001 Long-Term Stock Incentive Plan,
    Nonqualified Stock Option Agreement for Senior Executives.(1)10
.4b+

Opnext, Inc. Nonqualified Stock Option Agreement dated as of
    November 1, 2004, between Opnext, Inc. and Harry L. Bosco
    (Participant).(1)10
.4c+

Form of Opnext, Inc. 2001 Long-Term Stock Incentive Plan, Stock
    Appreciation Right Agreement.(1)10
.4d+

Form of Amendment to Stock Appreciation Right Agreement.10
.5

Form of Hitachi, Ltd. and Clarity Management, L.P. Nonqualified
    Stock Option Agreement.(1)10
.6+

Opnext, Inc. Amended and Restated 2001 Long-Term Stock Incentive
    Plan.(1)10
.7+

Employment Agreement, entered into as of July 31, 2001, by
    and between Opnext, Inc. and Harry L. Bosco, as amended.(1)10
.8+

Employment Agreement, entered into as of August 24, 2001,
    by and between Opnext, Inc. and Michael C. Chan, as amended.(1)10
.9+

Employment Agreement, entered into as of August 24, 2001,
    by and between Opnext, Inc. and Chi-Ho Christopher Lin, as
    amended.(1)10
.10+

Employment Agreement, dated March 5, 2001, by and between
    Opnext, Inc. and Robert J. Nobile.(1)10
.11+

Form of Opnext, Inc. Restricted Stock Agreement.(1)10
.12

Research and Development Agreement, dated as of July 31,
    2001, by and among Hitachi, Ltd., Opnext Japan, Inc. and Opto
    Device, Ltd. as amended.(1)10
.13

Research and Development Agreement, dated as of July 31,
    2002, by and between Hitachi, Ltd. and Opnext, Inc., as
    amended.(1)10
.14

Outsourcing Agreement, made and entered into as of July 31,
    2001, by and between Hitachi, Ltd. and Opnext Japan, Inc., as
    amended.(1)10
.15

Preferred Provider Agreement, made and entered into as of
    July 31, 2001, by and between Hitachi, Ltd. and Opnext,
    Inc., as amended.(1)10
.16

Procurement Agreement, made and entered into as of July 31,
    2001, by and between Opnext Japan, Inc. and Hitachi, Ltd., as
    amended.(1)10
.17

Raw Materials Supply Agreement, made and entered into as of
    July 31, 2001, by and between Hitachi, Ltd. and Opnext,
    Inc., as amended.(1)10
.18

Intellectual Property License Agreement, dated as of
    July 31, 2001, by and between Hitachi, Ltd. and Opnext
    Japan, Inc., as amended.(1)10
.19

Intellectual Property License Agreement, dated as of
    October 1, 2002, by and between Hitachi, Ltd. and Opnext
    Japan, Inc., as amended.(1)10
.20

Intellectual Property License Agreement, effective as of
    October 1, 2002, by and between Hitachi Communication
    Technologies, Ltd. and Opnext Japan, Inc.(1)10
.21

Trademark Indication Agreement, dated as of October 1,
    2002, by and between Hitachi, Ltd. and Opnext Japan, Inc., as
    amended.(1)10
.22

Trademark Indication Agreement, dated as of July 31, 2001,
    by and between Hitachi, Ltd., Opnext, Inc. and Opnext Japan,
    Inc., as amended.(1)10
.23

Lease Agreement, made as of July 31, 2001, between Hitachi
    Communication Technologies, Ltd. and Opnext Japan, Inc., as
    amended.(1) 87




---



##### Table of Contents



ExhibitNo.

Description of Document10
.24

Lease Agreement, made as of October 1, 2002, between
    Renesas Technology Corp. and Opnext Japan, Inc., as amended.(1)10
.25

Business Park Net Lease Agreement, dated as of June 30,
    2000, by and between Bedford Property Investors, Inc. and
    Opnext, Inc., as amended.(1)10
.26

Agreement on Bank Transactions between Opnext Japan, Inc. and
    The Bank of Tokyo-Mitsubishi UFJ, Ltd., as amended.(1)10
.27

Software User License Agreement, dated as of October 20,
    2003, by and between Renesas Technology Corp. and Opnext Japan,
    Inc.(1)10
.28

Logistics Agreement, effective as of April 1, 2002, between
    Opnext, Inc. and Hitachi Transport System, Ltd.(1)10
.29

Distribution Agreement, dated April 1, 2001, between
    Hitachi Electronic Devices Sales, Inc. and Opnext Japan, Inc.(1)10
.30

Distribution Agreement, dated April 1, 2003, between Opnext
    Japan, Inc. and Renesas Technology Sale Co., Ltd.(1)10
.31

Distribution Agreement, dated July 1, 2003, between Opnext
    Japan, Inc. and Hitachi High-Technologies Corp.(1)10
.32+

Employment Agreement, dated as of November 1, 2007, between
    Opnext, Inc. and Gilles Bouchard, together with the form of the
    Nonqualified Stock Option Agreement and Restricted Stock
    Agreement to be entered into between the Company and
    Mr. Bouchard.(2)10
.33+

Non-Competition Agreement, dated as of November 1, 2007,
    between Opnext, Inc. and Gilles Bouchard.(2)10
.34+

Indemnification Agreement, dated as of November 1, 2007,
    between Opnext, Inc. and Gilles Bouchard.(2)10
.35+

First Amendment to Opnext, Inc. Amended and Restated 2001
    Long-Term Stock Incentive Plan, dated as of December 12,
    2007.(3)10
.36+

Amended and Restated Employment Agreement, dated as of
    July 29, 2008, between Opnext, Inc. and Michael C. Chan.(4)10
.37+

Amended and Restated Employment Agreement between Opnext, Inc.
    and Robert J. Nobile, dated December 31, 2008.(5)21


List of Subsidiaries.(1)23
.1*

Consent of Ernst & Young LLP, Independent Registered
    Public Accounting Firm.31
.1*

Certification of Principal Executive Officer pursuant to
    Rule 13a-14
    of the Securities Exchange Act of 1934, as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.31
.2*

Certification of Principal Financial Officer pursuant to
    Rule 13a-14
    of the Securities Exchange Act of 1934, as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.32
.1**

Certification of Principal Executive Officer pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.32
.2**

Certification of Principal Financial Officer pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.     (1)
    
    Filed as an exhibit to the
    Form S-1
    Registration Statement
    (No. 333-138262)
    declared effective on February 14, 2007 and incorporated
    herein by reference.(2)
    
    Filed as an exhibit on
    Form 8-K
    as filed with the Securities and Exchange Commission on
    November 1, 2007 and incorporated herein by reference.(3)
    
    Filed as an exhibit on
    Form 8-K
    as filed with the Securities and Exchange Commission on
    December 12, 2007 and incorporated herein by reference.(4)
    
    Filed as an exhibit to
    Form 10-K/A
    (Amendment No. 1) as filed with the Securities and Exchange
    Commission on July 29, 2008 and incorporated herein by
    reference.(5)
    
    Filed as an exhibit to
    Form 8-K
    as filed with the Securities and Exchange Commission on
    January 7, 2009 and incorporated herein by reference.*
    
    Filed herewith.**
    
    Furnished herewith and not filed for purposes of
    Section 18 of the Securities Exchange Act of 1934, as
    amended.+
    
    Management contract or compensatory plan or arrangement. 88




---



##### Table of Contents



SIGNATURES    OPNEXT, INC.
  By:
    /s/  Gilles
    Bouchard     By:
    /s/  Robert
    J. Nobile      89




---



##### Table of Contents



POWER OF
    ATTORNEY
  Form 10-K
    Signature

Title/s/  Gilles
    BouchardGilles
    Bouchard

Director, President and Chief Executive Officer (principal
    executive officer)/s/  Robert
    J. NobileRobert
    J. Nobile

Chief Financial Officer and Senior Vice President, Finance
    (principal financial and accounting officer)/s/  Harry
    L. BoscoHarry
    L. Bosco

Director and Chairman of the Board/s/  Dr. David
    LeeDr. David
    Lee

Director and Co-Chairman of the Board/s/  Charles
    J. AbbeCharles
    J. Abbe

Director/s/  Kendall
    CowanKendall
    Cowan

Director/s/  Shinjiro
    IwataShinjiro
    Iwata

Director/s/  Dr. Isamu
    KuruDr. Isamu
    Kuru

Director/s/  Ryuichi
    OtsukiRyuichi
    Otsuki

Director/s/  John
    F. Otto, Jr.John
    F. Otto, Jr.

Director/s/  Philip
    F. OttoPhilip
    F. Otto

Director/s/  William
    L. SmithWilliam
    L. Smith

Director  90




---



##### Table of Contents



Exhibit Index
  ExhibitNo.

Description of Document3
.1

Form of Amended and Restated Certificate of Incorporation of
    Opnext, Inc.(1)3
.2

Form of Amended and Restated Bylaws of Opnext, Inc.(1)3
.3

Specimen of stock certificate for common stock.(1)4
.1

Pine Stockholder Agreement, dated as of June 4, 2003, by
    and among Opnext, Inc. and the Stockholders of Pine Photonics
    Communications, Inc.(1)4
.2

Registration Rights Agreement, entered into as of July 31,
    2001, by and among Opnext, Inc., Clarity Partners, L.P., Clarity
    Opnext Holdings I, LLC, Clarity Opnext Holdings II, LLC,
    and Hitachi, Ltd.(1)4
.3

Stockholders Agreement, dated as of July 31, 2001,
    between Opnext, Inc. and each of Hitachi, Ltd., Clarity
    Partners, L.P., Clarity Opnext Holdings I, LLC and Clarity
    Opnext Holdings II, LLC, as amended.(1)10
.1+

Pine Photonics Communications, Inc. 2000 Stock Plan.(1)10
.2+

Form of Pine Photonics Communications, Inc. 2000 Stock Plan:
    Stock Option Agreement.(1)10
.3+

Opnext, Inc. 2001 Long-Term Stock Incentive Plan.(1)10
.4+

Form of Opnext, Inc. 2001 Long-Term Stock Incentive Plan,
    Nonqualified Stock Option Agreement.(1)10
.4a+

Form of Opnext, Inc. 2001 Long-Term Stock Incentive Plan,
    Nonqualified Stock Option Agreement for Senior Executives.(1)10
.4b+

Opnext, Inc. Nonqualified Stock Option Agreement dated as of
    November 1, 2004, between Opnext, Inc. and Harry L. Bosco
    (Participant).(1)10
.4c+

Form of Opnext, Inc. 2001 Long-Term Stock Incentive Plan, Stock
    Appreciation Right Agreement.(1)10
.4d+

Form of Amendment to Stock Appreciation Right Agreement.10
.5

Form of Hitachi, Ltd. and Clarity Management, L.P. Nonqualified
    Stock Option Agreement.(1)10
.6+

Opnext, Inc. Amended and Restated 2001 Long-Term Stock Incentive
    Plan.(1)10
.7+

Employment Agreement, entered into as of July 31, 2001, by
    and between Opnext, Inc. and Harry L. Bosco, as amended.(1)10
.8+

Employment Agreement, entered into as of August 24, 2001,
    by and between Opnext, Inc. and Michael C. Chan, as amended.(1)10
.9+

Employment Agreement, entered into as of August 24, 2001,
    by and between Opnext, Inc. and Chi-Ho Christopher Lin, as
    amended.(1)10
.10+

Employment Agreement, dated March 5, 2001, by and between
    Opnext, Inc. and Robert J. Nobile.(1)10
.11+

Form of Opnext, Inc. Restricted Stock Agreement.(1)10
.12

Research and Development Agreement, dated as of July 31,
    2001, by and among Hitachi, Ltd., Opnext Japan, Inc. and Opto
    Device, Ltd. as amended.(1)10
.13

Research and Development Agreement, dated as of July 31,
    2002, by and between Hitachi, Ltd. and Opnext, Inc., as
    amended.(1)10
.14

Outsourcing Agreement, made and entered into as of July 31,
    2001, by and between Hitachi, Ltd. and Opnext Japan, Inc., as
    amended.(1)10
.15

Preferred Provider Agreement, made and entered into as of
    July 31, 2001, by and between Hitachi, Ltd. and Opnext,
    Inc., as amended.(1)10
.16

Procurement Agreement, made and entered into as of July 31,
    2001, by and between Opnext Japan, Inc. and Hitachi, Ltd., as
    amended.(1)10
.17

Raw Materials Supply Agreement, made and entered into as of
    July 31, 2001, by and between Hitachi, Ltd. and Opnext,
    Inc., as amended.(1)10
.18

Intellectual Property License Agreement, dated as of
    July 31, 2001, by and between Hitachi, Ltd. and Opnext
    Japan, Inc., as amended.(1)10
.19

Intellectual Property License Agreement, dated as of
    October 1, 2002, by and between Hitachi, Ltd. and Opnext
    Japan, Inc., as amended.(1)10
.20

Intellectual Property License Agreement, effective as of
    October 1, 2002, by and between Hitachi Communication
    Technologies, Ltd. and Opnext Japan, Inc.(1)10
.21

Trademark Indication Agreement, dated as of October 1,
    2002, by and between Hitachi, Ltd. and Opnext Japan, Inc., as
    amended.(1)10
.22

Trademark Indication Agreement, dated as of July 31, 2001,
    by and between Hitachi, Ltd., Opnext, Inc. and Opnext Japan,
    Inc., as amended.(1)10
.23

Lease Agreement, made as of July 31, 2001, between Hitachi
    Communication Technologies, Ltd. and Opnext Japan, Inc., as
    amended.(1)10
.24

Lease Agreement, made as of October 1, 2002, between
    Renesas Technology Corp. and Opnext Japan, Inc., as amended.(1)




---



##### Table of Contents



ExhibitNo.

Description of Document10
.25

Business Park Net Lease Agreement, dated as of June 30,
    2000, by and between Bedford Property Investors, Inc. and
    Opnext, Inc., as amended.(1)10
.26

Agreement on Bank Transactions between Opnext Japan, Inc. and
    The Bank of Tokyo-Mitsubishi UFJ, Ltd., as amended.(1)10
.27

Software User License Agreement, dated as of October 20,
    2003, by and between Renesas Technology Corp. and Opnext Japan,
    Inc.(1)10
.28

Logistics Agreement, effective as of April 1, 2002, between
    Opnext, Inc. and Hitachi Transport System, Ltd.(1)10
.29

Distribution Agreement, dated April 1, 2001, between
    Hitachi Electronic Devices Sales, Inc. and Opnext Japan, Inc.(1)10
.30

Distribution Agreement, dated April 1, 2003, between Opnext
    Japan, Inc. and Renesas Technology Sale Co., Ltd.(1)10
.31

Distribution Agreement, dated July 1, 2003, between Opnext
    Japan, Inc. and Hitachi High-Technologies Corp.(1)10
.32+

Employment Agreement, dated as of November 1, 2007, between
    Opnext, Inc. and Gilles Bouchard, together with the form of the
    Nonqualified Stock Option Agreement and Restricted Stock
    Agreement to be entered into between the Company and
    Mr. Bouchard.(2)10
.33+

Non-Competition Agreement, dated as of November 1, 2007,
    between Opnext, Inc. and Gilles Bouchard.(2)10
.34+

Indemnification Agreement, dated as of November 1, 2007,
    between Opnext, Inc. and Gilles Bouchard.(2)10
.35+

First Amendment to Opnext, Inc. Amended and Restated 2001
    Long-Term Stock Incentive Plan, dated as of December 12,
    2007.(3)10
.36+

Amended and Restated Employment Agreement, dated as of
    July 29, 2008, between Opnext, Inc. and Michael C. Chan.(4)10
.37+

Amended and Restated Employment Agreement between Opnext, Inc.
    and Robert J. Nobile, dated December 31, 2008.(5)21


List of Subsidiaries.(1)23
.1*

Consent of Ernst & Young LLP, Independent Registered
    Public Accounting Firm.24


Power of Attorney (set forth on the signature page of this
    Form 10-K).31
.1*

Certification of Principal Executive Officer pursuant to
    Rule 13a-14
    of the Securities Exchange Act of 1934, as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.31
.2*

Certification of Principal Financial Officer pursuant to
    Rule 13a-14
    of the Securities Exchange Act of 1934, as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.32
.1**

Certification of Principal Executive Officer pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.32
.2**

Certification of Principal Financial Officer pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.     (1)
    
    Filed as an exhibit to the
    Form S-1
    Registration Statement
    (No. 333-138262)
    declared effective on February 14, 2007 and incorporated
    herein by reference.(2)
    
    Filed as an exhibit on
    Form 8-K
    as filed with the Securities and Exchange Commission on
    November 1, 2007 and incorporated herein by reference.(3)
    
    Filed as an exhibit on
    Form 8-K
    as filed with the Securities and Exchange Commission on
    December 12, 2007 and incorporated herein by reference.(4)
    
    Filed as an exhibit to
    Form 10-K/A
    (Amendment No. 1) as filed with the Securities and Exchange
    Commission on July 29, 2008 and incorporated herein by
    reference.(5)
    
    Filed as an exhibit on
    Form 8-K
    as filed with the Securities and Exchange Commission on
    January 7, 2009 and incorporated herein by reference.*
    
    Filed herewith.**
    
    Furnished herewith and not filed for purposes of
    Section 18 of the Securities Exchange Act of 1934, as
    amended.+
    
    Management contract or compensatory plan or arrangement.