Worldwide optical transport systems sales down 2% in 2021 but headed for rebound: Dell’Oro

March 3, 2022
Sales of optical network hardware declined 11% in Asia Pacific last year, with much of this total due to a 9% reduction in Chinese spending. That double-digit dip was enough to offset upticks of 12% in North America, 6% in Europe, and 19% in LATAM.

The global optical transport systems market shrank 2% in 2021, to $15 billion, according to a new report from Dell’Oro Group. However, given the fact that every regional market in the world showed year-on-year growth except for Asia Pacific, the market research firm expects overall growth to return this year.

Sales of optical network hardware declined 11% in the Asia Pacific market last year, with much of this total due to a 9% reduction in Chinese spending. That double-digit dip was enough to offset upticks of 12% in North America, 6% in Europe, and 19% in Latin America.

“The optical transport market outside of Asia Pacific improved in the year, following a momentary slow down caused by the pandemic in 2020,” commented Jimmy Yu, vice president at Dell’Oro Group and author of the report, via a Dell’Oro press release. “It was a noticeably strong year for optical systems in all the other regions. In fact, with the exception of Asia Pacific, optical revenue in 2021 surpassed the pre-pandemic levels in each of the regions. The biggest issue facing the industry is the ongoing component shortage and supply chain bottlenecks. Without these issues, the optical market would have grown at a much higher rate.”

In an emailed response to questions from Lightwave, Yu indicated that 2022 will see a return to growth. “I’m expecting a good recovery for the optical transport market in 2022,” he wrote. “I’m currently predicting a 5% growth this year.”

That said, supply chain constraints will continue to weigh on the market. “Supply chain is expected to continue being a headwind for the market through 2022, holding back growth and increasing costs. As a result, all vendors are asking for longer lead times and asking customers to place earlier orders, driving record backlog levels at optical system companies,” wrote. “Also, while difficult to do, some vendors are increasing prices to shore up profit margins that have been under pressure from the rising costs of components and shipping/transportation.

“I am expecting supply chain to be an issue through most of 2022. That said, many vendors think improvements in supply chain will begin to occur mid-year with a full recovery by 2023,” Yu concluded.

Dell’Oro’s Optical Transport Quarterly Report covers that market with tables that detail 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 sales.

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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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