Optical component sales dip in 3Q21: LightCounting

Dec. 16, 2021
The market research firm notes that 3Q20 was a particularly strong quarter and therefore set a high bar. Fortunately for component vendors, LightCounting analysts expect growth to return in the fourth quarter of 2021.

LightCounting states in its December 2021 Quarterly Market Update that third quarter optical component sales were 12% below the third quarter of 2020 and flat compared to Q2 2021. The market research firm notes that 3Q20 was a particularly strong quarter and therefore set a high bar. Fortunately for component vendors, LightCounting analysts expect growth to return in the fourth quarter of 2021.

As the figure above would appear to indicate, the softness in the component market centered on sales in the telecom space. The segment’s performance contrasts with capex trends and the equipment segment during the quarter, LightCounting states (although market research firms such as Dell’Oro Group and Cignal AI likely would quibble that the positive financial reports LightCounting cites hid deeper trends in the equipment space in 3Q21; see “China slump drags down optical transport market: Dell’Oro” and “IP over DWDM, coherent pluggables to hamper metro WDM growth: Cignal AI”). COVID-derived IC shortages, shipping delays, and surcharges helped to drag revenues down.

Sales of optical transceiver in the quarter were flat year on year, although 7% healthier sequentially. LightCounting’s optimism for the fourth quarter of 2021 derives, at least in part, from its expectation of strong sales of 400ZR/ZR+ coherent pluggable transceivers.

Looking ahead, LightCounting describes the market in 2022 as “a volatile mix of positive and negative factors.” On the plus side, demand should remain strong in most segments as should product innovation and commercialization. However, the continued negative effects of COVID could lead to excess inventories in the future. Meanwhile, internet content providers (ICPs) face growing regulatory threats and 5G deployment continues simmer rather than boil. Inflation and the possibility of major debt defaults in China also bear watching, according to 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.

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