LightCounting expects optical transceiver and component sales rebound after slow 2020 start

June 18, 2020

The market research firm states in its most recent Quarterly Market Update that its analysts expect overall year-to-year growth of 9% in 2020.

Stephen Hardy

LightCounting expects optical transceiver sales to pick up sequentially in 2Q20, despite the effects of the COVID-19 pandemic.

LightCounting says that sales of optical transceivers and components will turn around later this year after a slow start in the first quarter. The market research firm states in its most recent Quarterly Market Update that its analysts expect overall year-to-year growth of 9% in 2020.

Revenues for 1Q20 declined 12% sequentially, albeit coming after a new high in the fourth quarter of 2019. The impact of the coronavirus on China, particularly in terms of factory and construction shutdowns, depressed the overall optical transceiver and component market. LightCounting notes that such effects have now rolled into the West and will affect second quarter – and likely third quarter – sales as well. The market research firm notes that vendor year-over-year guidance for the second quarter was all over the map, ranging from double-digit increase to similarly large declines.

However, every company LightCounting analysts track, except Lumentum, stated they expected sequential growth. LightCounting has confidence they will prove to be right, thanks to continued strong spending by the internet content provider (ICP) space. The firm’s most recent data shows that hyperscaler cloud revenues continue to grow faster than other business segments and operate at higher profit margins. So ICPs would be “extremely foolish” if they were to hamper there opportunities in this area by cutting back on infrastructure spends.

As the year progresses, LightCounting expects optical transceivers sales to rise thanks to double-digit growth in the sale of wireless transceivers and optical interconnects, as well as modest growth in Ethernet application sales. Demand for CWDM/DWDM, FTTx, and Fibre Channel devices will remain basically flat for the year, LightCounting predicts. LightCounting has expressed similar optimism, despite the pandemic, in earlier reports (see "Pandemic or not, optical transceiver sales will still grow in 2020: LightCounting").

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About the Author

Stephen Hardy | Editorial Director and Associate Publisher, Lightwave

Stephen Hardy is editorial director and associate publisher of Lightwave and Broadband Technology Report, part of the Lighting & Technology Group at Endeavor Business Media. Stephen is responsible for establishing and executing editorial strategy across the both brands’ websites, email newsletters, events, and other information products. He has covered the fiber-optics space for more than 20 years, and communications and technology for more than 35 years. During his tenure, Lightwave has received awards from Folio: and the American Society of Business Press Editors (ASBPE) for editorial excellence. Prior to joining Lightwave in 1997, Stephen worked for Telecommunications magazine and the Journal of Electronic Defense.

Stephen has moderated panels at numerous events, including the Optica Executive Forum, ECOC, and SCTE Cable-Tec Expo. He also is program director for the Lightwave Innovation Reviews and the Diamond Technology Reviews.

He has written numerous articles in all aspects of optical communications and fiber-optic networks, including fiber to the home (FTTH), PON, optical components, DWDM, fiber cables, packet optical transport, optical transceivers, lasers, fiber optic testing, and more.

You can connect with Stephen on LinkedIn as well as Twitter.