The global optical components market is experiencing an upward swing as global internet traffic continues to increase, prompting network operators to deploy high speed optical technologies to keep up with demand.

James Middleton

August 14, 2014

2 Min Read
optic fibre
Optical components are in demand due to data usage

The global optical components market is experiencing an upward swing as global internet traffic continues to increase, prompting network operators to deploy high speed optical technologies to keep up with demand.

According to industry analyst Ovum, the optical components market posted a one per cent decline in global revenues sequentially but experienced growth of seven per cent compared to the year-ago period.

The sector hit revenues of $6.8bn in 2013, up three per cent on 2012 due to strong datacom sales driven by hyperscale datacentres, 100G demand and unexpected growth in sales of transceivers for fibre-to-the-antenna applications for 4G build-outs.

The WAN segment, which includes components in telecom carriers’ core and metro networks, continues to be the largest segment and is forecast to grow at a compound annual growth rate (CAGR) of 11 per cent to $7bn in 2019 experiencing big demand for 100G components and modules.

According to Ovum, datacom will be the fastest-growing segment, expanding at a 16 per cent CAGR to reach $4.2bn in 2019, led by demand for 10 and 40G components in the early years and then 100G in the later years driven by the availability of server ports supporting data rates greater than 10G.

The access network sector is forecast to decline at a two per cent CAGR to $1.1bn in 2019, driven by FTTx application, where volumes are nearly constant through the forecast period but price declines are projected to pull down revenues.

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 eight per cent in 2014, in part to support continuing annual double-digit traffic growth and the infrastructure needed for cloud services,” Inniss said.

About the Author(s)

James Middleton

James Middleton is managing editor of telecoms.com | Follow him @telecomsjames

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