August 13, 2014
The global optical components (OC) market posted revenues of US$6.8 billion in 2013, up 3% from the 2012 level. The gain was due to strong datacom sales driven by hyperscale data centres, 100G coherent demand, and unexpected growth in sales of transceivers for fiber-to-the-antenna applications for 4G build-outs, according to global market research firm Ovum.
Ovum’s new optical components forecast projects the following market developments:
* OC sales will grow in 2014 following a respectable 1Q14. The market posted a 1% decline sequentially, but grew 7% compared to the year-ago period. The lower 1Q14 result is due to new lower telecom prices being implemented. Demand for 100G components for coherent transmission in WAN, datacom transceivers at 10 and 40G, and fiber-to-the-antenna transceivers is expected to continue. Traffic continues to increase, and high-speed optics being used in new applications are helping to drive the market forward.
* 1Q14 marks the fourth consecutive quarter with revenue growth compared to the year-ago period. The market is moving along at a nice pace when compared to the year-ago period.
* The WAN OC segment, which includes components in telecom carriers’ core and metro networks, continues to be the largest segment and is forecasted to grow at a compound annual growth rate (CAGR) of 11% to US$7bn in 2019.
Daryl Inniss, practice leader for telecoms components at Ovum, said, “vendors have good reason to be optimistic about 2014 and beyond. Ovum believes demand for 100G metro–optimized transmission gear will begin shipments and ramp in 2015. Multiple component vendors introduced components and pluggable optics for 100G DWDM in anticipation. Opportunities are also emerging in the data center for high-speed interconnects.
“Although the market posted a low-single-digit sequential decline in 1Q14, partly due to annual telecom price declines that take effect in the first quarter of the year, it expanded compared to the year-ago period. Ovum expects the OC market to expand 8% in 2014, in part to support continuing annual double-digit traffic growth and the infrastructure needed for cloud services.”