LightCounting states in is Fourth Quarter 2021 Quarterly Market Update that the last three months of the year proved a revenue boon to many companies in the communications sector with influence on optical communications technology sales. In fact, multiple segments saw revenue records set during the quarter, while some companies in others also set new high-water marks, the market research firm stated.
As groups, the Top 15 internet content providers, the Top 14 datacom equipment vendors, and semiconductor makers each saw their segments set revenue records. Optical component vendors enjoyed their best three months of the year in 4Q21 as well, according to LightCounting. Network equipment sales didn’t quite set a record, but individual companies within the group – such as ADVA, Ericsson, and Infinera – did set new quarterly revenue benchmarks.
And while communications services providers (CSPs) as a whole saw quarterly revenues decline year-on-year by 1.8%, China Unicom, Comcast, and Deutsche Telekom saw revenues reach previously unmatched highs. CSPs also spent a lot of money, with 4Q21 the most prodigious quarter for capex since Q4 2016. Full-year CSP capex in 2021 was $183 billion, 7.8% higher year-on-year and a new record as well.
A closer look at optical components and modules
Optical component revenues for the quarter exceeded $2.5 billion, only the fourth time sales have reached that mark but still 2% lower than Q4 2020. Optical transceiver sales helped boost revenues, with shipments establishing a new record and driving revenues that topped $2 billion per quarter for the first time. Revenues grew 37% overall, with Ethernet and WDM segment growth in the mid-to-high 40% range during the quarter.
LightCounting notes that one reason for the transceiver sales record is that average prices actually rose in 2021 in some application categories. For example, share leaders Ethernet and WDM recorded sales growth of 28% and 27%, respectively, in 2021 versus 2020. As shown in the chart below Ethernet units increased by 11% and average prices by 21%; while WDM units declined 12%, prices increased 37%. LightCounting cites a change in product mix toward high-performing modules in part for the price increase, while supply shortages also may have enabled vendors to hold the line on typical annual price decreases.
Looking ahead to this year, LightCounting notes that the specter of supply chain restraints continues to hand over the various markets. The market research firm expects such constraints to last into 2023. However, companies are becoming more adept at circumventing such issues, LightCounting notes.
LightCounting’s Quarterly Market Update (QMU) is a detailed analysis of the most recent quarter reported by companies in the optical communications industry. It consists of a PowerPoint slide deck and Excel workbook with quarterly sales for many companies in the industry, including CSPs, ICPs, network equipment markers, and optical and semiconductor components vendors. The QMU also contains the latest results of LightCounting’s proprietary optical transceiver vendor shipment survey, with units, prices, and revenues of more than 150 transceiver product types.
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