The telecommunications market collapse has caused a sharp decline in fiber-optic-cable sales, prompting fiber and cable manufacturers to close or "moth-ball" factories, consolidate factories, and reduce staff, reports a new study by KMI Research (Providence). Plant closings have reduced the number of fiber manufacturing facilities from a peak of 65 in 2000 to 46 that were operational for at least part of 2002. The number could decrease again this year.
"Some of the larger market participants with fiber plants in different countries have decided to close one or more plants, consolidating company-wide production to fewer facilities," says Patrick Fay, analyst and lead author of the report. "Some of the factories being closed had capacity of several million kilometers."
Worldwide fiber-optic cable sales dropped from $8.7 billion in 2001 to $3.5 billion in 2002, which Fay attributes to several factors, including a steep decline in demand, price erosion due to excess capacity, competition, and a changing mix of applications. Another aspect of the market's restructuring is the shift away from North America and Western Europe to Asia.
KMI predicts continued industry restructuring in 2004 as the United States remains a weak market and worldwide fiber installations show only gradual growth. By 2007, industry participants will have responded to market changes; there will be a better balance between the number of suppliers and demand, assures the report.
For more on the report, "Worldwide Markets for Optical Fiber and Fiber-optic Cable: Market Developments and Forecasts," call 401-243-8114 or visit www.kmiresearch.com.