Ovum: Optical components market up 4% in 1Q08

Sept. 1, 2008

Ovum (www.ovum.com) announced its final analysis of 1Q2008 results for optical component (OC) vendors. In 1Q08, revenues for the segment were up 4% versus 4Q07 and up 12% vs. 1Q07 results.

"The inventory correction that weakened the OC industry for much of 2007 has stabilized," said Daryl Inniss, VP and practice leader, communication components, at Ovum. "We see strong demand for new products that support network agility, bandwidth expansion, and lower total transport cost."

Following are 1Q08 highlights for the OC market and the top-10 vendors:

1Q08 revenues were $1,178 million, up 4% versus 4Q07 and up 12% versus 1Q07.
Most OC vendors attributed revenue growth to carrier network expansion and projected growth throughout 2008.
Market leader JDSU posted a 5% sequential growth led by ROADMs, tunable lasers, and transponders, and agile amplifiers, but lost market share on a rolling 4Q basis.
Finisar, the second-largest OC company, posted a sequential gain of 9% driven by 1- to 8-Gbit/sec LAN/SAN transceivers and its 10- and 40-Gbit/sec transceivers.
Sumitomo declined 1% sequentially to $92 million.
Ovum estimated Avago's revenues at $85 million, a 4% sequential growth.
Opnext, the fifth-largest OC company, posted the strongest quarter-over-quarter growth among the top-10 suppliers at 9%. Growth came from 10- and 40-Gbit/sec transceivers and transponders.
Emcore, combined with estimates of Intel's OPD revenues that it recently acquired, posted a 2% sequential decline.
Avanex posted a 5% sequential decline, but reported a stronger than expected gross margin of 32%.
Source Photonics, formerly MRV (Luminent), posted a 2% sequential decline.
Oplink posted the largest decline—17%—among 10 suppliers. The decline is due, in part, to the discontinuation of some products.
Bookham posted the strongest year over year growth at 39%. Its quarterly growth was flat; the company cited strong demand for tunable lasers and transponders.

Components and modules supporting 10 Gbits/sec, 40 Gbits/sec, and ROADMs were identified most often by vendors as being responsible for its growth.