Ongoing supply chain shortages combined with currency fluctuations to send optical transport equipment sales revenues to $3.4 billion in the third quarter of 2022, a 6% year-on-year decline according to the latest Optical Transport Quarterly Report from Dell’Oro Group. Demand for optical transport systems remains strong, however.
“The main culprit for this market revenue decline was the lack of component supply needed to make finished goods,” commented Jimmy Yu, vice president at Dell’Oro and author of the report. “Optical vendors have a growing amount of backlog due to higher demand for DWDM equipment but are not able to deliver completed systems when they are short on one component or two. Another factor lowering the market revenue is the strengthening U.S. dollar. Since the market revenue is based on US dollars, most sales in Europe and Asia are converted to fewer U.S. dollars and reducing the reported market size.”
As an example of this last factor, sales of WDM equipment for long-haul and metro applications in 3Q22 shrank 5% versus the year-ago quarter. However, Dell’Oro estimates that, on a constant currency basis, such revenues actually grew by as much as 1%.
Not surprisingly, the revenue tally for Europe suffered significantly due to the lower conversion of the euro to the U.S. dollar. Meanwhile, the Russian-Ukraine war dampened overall demand. North America managed to avoid a plunge into negative territory, staying “slightly positive,” according to the market research firm.
Dell’Oro’s Optical Transport Quarterly Report covers the market with tables highlighting 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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