Optical transport revenues exceed second-quarter growth expectations

Driven by supply improvements, a new Dell'Oro report found that optical transport equipment revenue grew five percent year-over-year in the second quarter. The research firm said this was the third consecutive quarter that the optical market growth rate topped estimates.

The optical transport market revenue grew five percent year-over-year in the second quarter to over $4 billion. Dell’Oro said better-than-expected revenue was due to higher DWDM Long Haul and Multiservice Multiplexer revenue.

Huawei, Ciena, Nokia, ZTE, Infinera, and FiberHome were the most significant global WDM suppliers in the trailing four-quarter period. Within this group, Nokia and FiberHome gained the most market share compared to the previous year period. FiberHome’s optical revenue grew at the highest rate among the vendors at over 30 percent year-over-year.

“It was another great quarter for optical system vendors,” said Jimmy Yu, VP at Dell’Oro Group. “Ever since component supply eased up, system manufacturers have been able to deliver more products to their customers that sat in the backlog. As a result, optical revenues have increased faster than expected.”

He cautioned that the ongoing inventory digestion will be an issue through the rest of 2023.

“With that said, some customers are signaling a need for a little pause after receiving these deliveries,” Yu said. “Therefore, even though the results in the first half of 2023 were higher than expected, we are holding the full year 2023 outlook at 4 percent, believing year-over-year growth will slow in the back half of the year.”

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