LightTrends

 

Chasing the Ethernet Market’s Growth, as It Continues to Exceed Expectations

 

LightCounting releases High-Speed Ethernet Optics Report

 

 

Demand for Ethernet optics from leading Internet Content Providers (ICPs) continues to surprise. The chart below shows historical and forecast sales of Ethernet optical transceivers to the Top 4 ICPs: Amazon, Facebook, Google and Microsoft. We estimate that these companies’s spending on Ethernet optics will increase from $0.5 billion in 2016 to $1 billion in 2017 and almost $2 billion by 2022, accounting for 30% of the global market for Ethernet transceivers.

Supply shortages for 100GbE optics limited market growth in 2016, as vendors scrambled to ramp up production. Our projections for 2017 are based on estimated manufacturing capacity of the leading suppliers of optics, as demand will continue to exceed supply until 2018. Volume shipments of 200GbE and 400GbE transceivers for applications in ICP’s mega-datacenters are projected to start in 2019 and 2021, respectively.

LightCounting’s forecast is based on a correlation between the growth rate of traffic inside mega-datacenters and the bandwidth of optical transceivers sold into this market segment. Amazon and Facebook commented recently that traffic in their facilities increases by 100% per year. Data on transceiver sales collected by LightCounting suggests that the Top 4 ICPs increased bandwidth of optical connectivity by 70% in 2016, which is consistent with reported shortages in supply of 100GbE optics. Our projections for 2017 assume that this bandwidth will increase by 90%, as supply chain shortages moderate.

The forecast for 2018-2022 assumes that traffic growth in mega-datacenters will decline gradually and ICPs will find ways to use optical connectivity more efficiently. Despite these conservative assumptions, the global market for Ethernet optics is projected to grow by 18% annually, exceeding $6 billion by 2022.

LightCounting’s new High-Speed Ethernet Optics Report is focused on markets and technologies for Ethernet Optical transceivers, used in Cloud, Enterprise and Telecom applications. It includes shipment data through 4Q, 2016, and a forecast for more than 50 Ethernet transceivers segmented by speed, reach and form factor. Confidential sales data from more than 20 leading suppliers provided the basis for this forecast. As an active participant in the IEEE 802.3 standards process, LightCounting is also uniquely placed to provide an insider perspective on vendor’s latest products and technologies under consideration by the IEEE.

More information on this report is available at: http://www.lightcounting.com/Ethernet.cfm


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ABOUT LIGHTCOUNTING MARKET RESEARCH

LightCounting is a leading optical communications market research company, offering semiannual market updates, forecasts, and state-of-the-industry reports based on its analysis of primary research with dozens of leading module, component, and system vendors as well as service providers and other users. LightCounting is the optical communications market’s first choice source for the accurate, detailed, and relevant information necessary for doing business in today’s highly competitive environment. For more information, visit: www.LightCounting.com or follow us on Twitter at @LightCounting.