LightCounting raises optical communications market forecast
With the optics market having set a revenue record in the second quarter of 2021, LightCounting has raised its forecast for 2021 through 2026. The market research firm states in its newly released October 2021 Optical Communications Market Forecast report that it now expects the market to grow by a 14% compound annual growth rate (CAGR) in 2021-2026, versus the 10% it predicted in the forecast report it published this past April.
Several optical communications vendors have reported that supply chain issues have squeezed their quarterly revenue figures this year. However, LightCounting points out that such issues, which go back to last year, may also create extra demand and moderate price declines. As a result, LightCounting expects the optical transceiver market to enjoy double-digit growth, if not at the same levels enjoyed last year. The market research firm now believes optical transceiver sales will increase 12%-16% in 2021, a bit below the 23% growth seen in 2020. Additionally, revenues from active optical cables (AOCs) also should see a 10% CAGR over the next 5 years. However, all other segments will be flat, according to LightCounting.
Cloud companies will prove a significant engine of growth during the forecast period, with their spending rates increasing more rapidly than those of such customer segments as communications services providers and enterprises. For example, the five largest cloud companies account for almost 50% of optical transceiver sales worldwide, and the increase in their appetite for optics “continues to surprise us,” LightCounting states. In fact, the market research company anticipates that the Top 15 cloud companies will set a spending record this year while eclipsing the total spend of the Top 15 telecom service providers for the first time.
That said, LightCounting cautions that depending upon cloud operators to continue on this path carries risk. The market researchers point to the current hostile environment in various places in the world to Facebook and Google as concerning, as are the challenges Chinese cloud players have faced in their home country. The continuing trade tensions between the U.S. and China also could have a negative impact, LightCounting points out.
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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.