China slump drags down optical transport market: Dell’Oro

Dec. 2, 2021
The optical transport market has declined 2% year-over-year through the first three quarters of 2021, according to Dell’Oro Group.

The optical transport market has declined 2% year-over-year through the first three quarters of 2021, according to Dell’Oro Group. The blame falls squarely on China; demand has slumped in the world’s largest market, outpacing growth throughout the rest of the world, the market research firm states in its latest Optical Transport Quarterly Report.

“Optical equipment revenue in China took a sharp turn for the worse in 3Q 2021,” said Jimmy Yu, vice president at Dell’Oro. “As a result, optical revenue in China declined at a double-digit rate in the quarter, resulting in a 9% decline for the first nine months of 2021. At this rate, we are expecting a full-year optical market contraction in the country – something that has not occurred since 2012. Helping to offset some of this lower equipment revenue from China was the robust demand in North America, Europe, and Latin America.”

In fact, demand outside of China has outpaced supply, according to the report. “We estimate that optical transport equipment revenue outside of China grew 6% year-over-year in the third quarter. However, we believe this growth rate could have been higher, closer to 10%, if it was not for component shortages and other supply issues plaguing the industry. So, fortunately, while optical demand is hitting a rough patch in China, it seems to be accelerating in other parts of the world,” Yu stated.

Dell’Oro’s Optical Transport Quarterly Report covers that market with tables illustrating manufacturers’ revenue, average selling prices, and unit shipments (by speed including 100 Gbps, 200 Gbps, 400 Gbps, and 800 Gbps). The report tracks DWDM long haul, WDM metro, multiservice multiplexers (SONET/SDH), optical switch, optical packet platforms, data center interconnect (metro and long haul), and disaggregated WDM.

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