Due mainly to a slowdown in demand at Meta, LightCounting has flipped its prediction script for Ethernet transceiver sales in 2023. The market research firm now believes sales of such modules will decline 10% this year after previously predicting 9% growth last September in its previous High Speed Ethernet Optics Report (see "LightCounting shrinks Ethernet optics forecast").
“We rarely forecast steep market declines, but we have to be realistic with the expectations for 2023,” the company said in a note issued last week announcing its newest High Speed Ethernet Optics Report.
Spending plans at Meta have taken a second nosedive, according to LightCounting. Analysts initially had decreased estimates of shipments to Meta last October, which at the time had led the market researchers to reduce their Ethernet module growth forecast for 2023 to 2%. Meta had indicated aggressive plans to make up for its reserved response to the COVID pandemic, with an original forecast for 2023 to double optics deployments. The company had more than 40 data centers under construction and had launched additional upgrades last year. However, the company now has either reduced many of its expansion projects or placed them on hold, LightCounting reports. Macroeconomic and regulatory factors are to blame, the market research firm states.
The reduction in expected spending at Meta principally will be seen in 200-Gbps devices, LightCounting says. Estimates for 400G/800G module sales to Meta also received a haircut, if not as severely.
The overall market decline should reverse itself next year, although sales are not expected to reach double-digit growth again until 2025 (see chart above). The long-term compounded annual growth rate (CAGR) remains at 13%, LightCounting notes. Within this context, the analysts foresee 1.6T transceivers helping to support 40% per year bandwidth growth in data centers operated by Google, Amazon, and Microsoft within the forecast period.
LightCounting’s High Speed Ethernet Optics Report analyzes the impact of growing data traffic and the changing architecture of data centers on the market forecast for Ethernet optical transceivers with a focus on the high-speed modules used in data centers. It leverages historical data on shipments of Ethernet modules combined with market analyst research to make projections for sales of these products in 2023-2028. The report contains forecasts for more than 50 product categories, including 1GbE, 10GbE, 25GbE, 40GbE, 50GbE, 100GbE, 200GbE, 2x200GbE, 400GbE, 800G, and 1.6T transceivers, sorted by reach and form factors. It also summarizes the technical challenges faced by high-speed transceiver suppliers, including a review of the latest products and technologies introduced by leading suppliers.
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