While the second quarter of 2018 wasn’t particularly pleasant generally for optical systems vendors (see, for example, “Optical systems sales struggle in Q2 2018: IHS Markit”) – and was really bad for ZTE – sales of optical transceivers rose sequentially and held their own year-on-year, according to LightCounting. While demand for DWDM transceivers hit a multiyear low because of the ZTE shutdown, the market research firm says in its “September 2018 Quarterly Market Update Report” that strong demand for Ethernet optics for data center and enterprise applications, as well as improvements in worldwide wireless fronthaul and FTTx optics interest, provided a counterbalance.
LightCounting reports that shipments of 100GbE SR4 and CWDM4 modules in the first half of the year exceeded their expectations. The opposite was true of all other 100GbE transceivers, with several suppliers citing excess inventory at Amazon as a drag on 100GbE PSM4 sales. However, demand for 10GbE transceivers was very strong in the first six months of this year; unit shipments grew by more than 20%, according to the new report. The majority of these modules went to applications in enterprise networks. Cisco reported a 42% increase in the number of 10GbE ports shipped into this market in 1H18. And even 1GbE transceiver sales grew slightly in Q2 2018, LightCounting added.
Looking at the market from the customer perspective, internet content providers (ICPs) spent 80% more on their infrastructures in the first half of 2018 than during the same time in 2017. Communications service providers also increased their spending during this year’s first half versus 2017, although by only 2.6%.
Peeking ahead, LightCounting expects DWDM module sales to pick up now that ZTE is back in business. The company cited the fact that Acacia Communications executives anticipate a nearly 40% sequential increase in third quarter 2018 sales, with ZTE responsible for 60% of that.
The new “Quarterly Market Update” includes data and commentary on the Q2 2018 financial results of CSPs, ICPs, networking hardware, optical components, modules, and semiconductor chip makers. It also includes shipment data through Q2 2018 for more than 100 optical transceiver and wavelength selective switch (WSS) products.
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