Access market outlook dampened by delays and price declines
LightCounting releases its Next Generation Access Optics Report.
LightCounting has published an update of its annual Next Generation Access Optics report. Over the next five years, access will account for more than half of all optical communications components shipped, and roughly 15% of total optical components revenues.
In 2020, the global access optics market will consume nearly 100 million devices, and generate almost $1.6 billion in vendor revenues. FTTx devices will account for roughly two-thirds of shipments and one-third of revenues. Fronthaul transceivers account for a third of unit shipments and half of total revenues. Demand will reach a peak next year and gradually decline thereafter, as China’s access deployments wind down and the rest of the world does not completely offset the decline.
Our new forecasts for FTTx, fronthaul and backhaul have each been revised downward compared to our April 2020 forecast, and the combined five-year market opportunity is now $8.3 billion – down about 20%.
FTTx remains dominated by the Chinese operators, which have scaled back upgrades to 10G-PON. At the same time, prices for the highest volume products continue to fall, with GPON BOSAs now well under $5 per unit.
Upgrades to mobile network infrastructure to support 5G deployments in Europe and the US are likely to be delayed, and low prices for fronthaul optics deployed in China continue to surprise us. In the fronthaul segment the biggest changes to the forecast are reductions in 10G WDM and in 25G grey optics demand.
Also, for the first time, our Access Optics report contains a breakdown of fronthaul transceiver sales by region, made possible by the addition of Wireless Infrastructure coverageunder the direction of Stephane Téral to the LightCounting research portfolio earlier this year. China dominates the fronthaul transceiver market until 2025 when it is finally overtaken by the amalgem of EMEA, CALA, and the Rest of Asia Pacific (including India, Australia, Indonesia, Malaysia, etc.).
The access optics market is becoming similar to the Ethernet transceiver market in one way – some of the largest individual operators are going their own way in terms of fronthaul architecture and represent nearly all the demand for specific products. One example if China Mobile’s choice of 10G CWDM, another is Verizon’s choice of NG-PON2. Our new forecast contains detailed forecasts for 10G and 25G CWDM and DWDM fronthaul transceivers with regional/country breakouts.
With the Biden-Harris administration taking office in January 2021, and the prospect of having effective COVID-19 vaccines available soon afterward, the macro-economic outlook for 2021 and beyond is becoming more optimistic. For this reason we believe our current forecasts have more upside than downside potential. Time will tell if we are right.
More information on the report is available at: https://www.lightcounting.com/products/NGAO/