Demand for Optical Components and Modules Weak in early 2012 But Likely to Improve in the Rest of the Year
Sales of optical components and modules increased by 9% in 2011, after spiking by 36% in 2010. Very high growth of this market in 2010, followed by a slowdown in early 2011, raised concerns of a potential market bubble among investors. However, sales of many products remained strong in 2011, pulling the overall market into positive territory and calming the global financial community. While the market remains shaky and Q1 2012 may be disappointing for some suppliers, a solid recovery in both telecom and datacom market segments is likely to start in the second quarter and continue through the rest of 2012. Demand for optical networking equipment outpaced sales of components and modules in 2011, and the supply chain should rebalance itself in 2012.
LightCounting’s “Market Update Report,” released this week, includes sales data on more than 100 product categories covering the period from Q1 2010 to Q4 2011 for SONET/SDH, Ethernet, Fibre Channel, CWDM, DWDM, and FTTx transceivers. It also discusses guidance for 2012 and potential changes to LightCounting’s market forecast published in December 2011. Data for the report was provided by more than 20 leading module and component vendors.
Sales of optical components and modules for telecom applications increased by 11% in 2011, let by growth in sales of FTTx and WDM transceivers. Sales of SONET/SDH interface modules declined by 1% because of surprisingly weak sales of 40 Gbps short-reach modules. The Ethernet transceiver market gained 8% in 2011, while sales of Fibre Channel modules declined by 10%.
The most interesting developments in the optical components and modules market for 2011 include
The report also includes analysis of latest product announcements and publicly reported revenues of equipment vendors. Highlights in this market include
Analysis of publicly reported revenues of equipment vendors combined with confidential sales data of optical components and modules, collected by LightCounting, offer a unique insight into market dynamics, presented in this report. The report also presents analysis of network bandwidth growth calculated from data on shipments of opto-electronic interface modules employed in telecom, enterprise, and storage area networks. This approach to tracking the market offers an effective method for identifying the timing and scope of infrastructure upgrade cycles, technology transitions, and even product life cycles.
All these data combined with guidance from component suppliers and system vendors suggest that numerous network upgrade projects continue worldwide, and the industry is well positioned for a very good year in 2012. Even minor improvements in the macroeconomic situation may have a significant impact on the rate of upgrades to networking infrastructure. Businesses and service providers tend to invest more in early stages of economic recoveries in anticipation of higher revenues during the boom years.