Fiber-optic interconnect sales reach $1 billion

July 1, 1997

Fiber-optic interconnect sales reach $1 billion

The penetration of fiber into new areas has increased the demand for fiber-optic connectors, couplers, adapters, and cable assemblies

KEN FLECK

Global connector research group inc.

Historically, the use of fiber-optics has been strongly dominated by such long-line applications as interexchange, interoffice, submarine, and cable-TV trunk networks. In the past few years, however, the demand for fiber has accelerated in data-intensive local area networks (lans), subscriber broadband distribution architectures, and fiber-to-the-curb networks for the delivery of voice, video, and data services to optical network units located in residential neighborhoods. The passage of the Telecommunications Act of 1996 has also been a driving force for fiber-optic technology for cable-TV industry operators. Furthermore, the application of fast lan technologies such as Asynchronous Transfer Mode and Fiber Distributed Data Interface (fddi) is accelerating. There is also more demand for hybrid fiber/coaxial cable, switch-signal video, and fiber-to-the-home.

This increase in the demand for fiber-optic technology has created significant growth in the sales of fiber-optic connectors, couplers, adapters, cable assemblies, and prewired shelves. Factory shipments of such products reached $1.003 billion in North America in 1996. This industry segment as a whole rose by double digits in 1996; while it was typical for suppliers to record increases of 10%, some niche companies reported increases of 30% to 50%.

Driving this increase was a greater number of suppliers who offered preconnectorized cables and cable assemblies (prewired shelves), which now account for 20% of the total market. Significant increases in demand for fiber optics in such segments as telecommunications, premises data networks, cable TV, and military/ aerospace also played a role in the growth of connector sales. In the singlemode field, the SC connector recorded the highest shipment volume, followed by FC, ST, and biconic. In multimode connectors, ST recorded the highest shipments, followed by SC, fddi, and sma.

In North America, factory shipments of fiber-optic connectors, couplers, adapters, and cable assemblies for 1996 totaled $793.9 million (see Table 1, Part A). Sales of singlemode connectors, couplers, adapters, and cable assemblies were nearly equal to those of their multimode counterparts when measured in dollars. The sales units, however, were not equal, because singlemode designs cost much more than multimode designs (usually by a 4:1 ratio). Singlemode components include such design types as SC, ST, FC, and biconic, among many others. Multimode devices include ST, SC, FC, sma, fddi, and Escon, among others.

The application-specific designs highlighted in the table include angle- polished, expanded-beam, hybrid and multifiber, military termini, polarization-maintaining, fusion splices, mechanical splices, and underwater designs.

Many suppliers now offer preconnectorized cables and cable assemblies, referred to in the industry as "prewired shelves." Table 1, Part B, displays this added market segment. These prewired shelves are offered by such sup pliers as Lucent Technologies, adc, Portasystems (now part of Augat), Hubbell, mod-tap (now part of Molex), Ortronics, Siecor, Siemens, and Telect.

More recently, however, makers of fiber-optic cables, couplers, adapters, and cable assemblies have moved vertically into prewired shelves. These firms include amp, 3M, and Alcoa. Specialty companies, such as Spoval, offer prewired shelves but are not suppliers of connectors, couplers, adapters, or cable assemblies.

In addition to the $1.003 billion total identified in Table 1, captive producers of fiber-optic connectors, couplers, adapters, cable assemblies, and prewired shelves accounted for about another $100 million of shipments in 1996. Lucent, Siecor, and Siemens are a few of the many captive producers.

Singlemode devices

Total factory shipments of singlemode connectors, couplers, adapters, and cable assemblies came to $370.3 million for 1996. Table 2 displays the principal categories of singlemode designs. This category includes the following:

Connectors, accounting for $126 million in factory shipments. These include biconic, fc/pc, D4, SC, D3, ST, din-apc, E-2000, fc-apc, sc-apc, and LC.

Couplers/adapters, accounting for $56.4 million in factory shipments. These include fc/pc, SC, ST, biconic, and E-2000.

Cable assemblies, accounting for $187.9 million in factory shipments. These include SC, ST, FC, D4, biconic, E-2000, fc-apc, sc-apc, military, and application-specific designs.

Of the leading design types among singlemode connectors, SC, fc/pc, and ST combined account for 85% of the noncaptive consumer demand. Singlemode couplers/adapters are dominated by ST, SC, and fc/pc types. These three designs make up 75% of noncaptive factory shipments. With regard to singlemode cable assemblies, the leading design types are SC, FC, and ST, occupying 77% of the noncaptive factory shipments.

Multimode devices

Factory shipments of multimode connectors, couplers, adapters, and cable assemblies totaled $419.2 million for 1996 (see Table 3). The multimode category includes:

Connectors, accounting for $183.6 million in factory shipments. These include sma, ST, mini-bnc, fc/pc, biconic, Escon, fddi, SC simplex, SC duplex, MU mother/daughtercard connector, parallel fiber connectors (MT and mac), E-2000, LC, and backplane connectors.

Couplers/adapters, accounting for $50.5 million in factory shipments. These include Escon, SC, ST, E-2000, and biconic.

Cable assemblies, accounting for $185.1 million in factory shipments. These include SC, ST, FC, Escon, biconic, fddi, sma, E-2000, MT, military, and application-specific.

With regard to the most popular multimode connector design types, ST leads by a wide margin, with SC simplex and fddi following. ST also occupies a significant percentage of multimode connector/adapter sales, with SC and Escon following. The leading design types among multimode cable assemblies are ST, Escon, and SC.

General trends

Almost unanimously, suppliers agreed that prices eroded significantly in 1996, ranging from 10% to 15% for some fiber-optic connectors. Price erosion was no doubt stimulated by the introduction of plastic ferrules, although ceramic ferrules continue to be used by 80% to 90% of the total industry. Ceramic ST singlemode connectors could be found for $8.00, and ceramic SC connectors could be found for as low as $6.50 to $6.95. Multimode ST connectors could be purchased for $2.00, though the average was generally in the $3.00 range.

Meanwhile, many suppliers expanded their product offerings. In addition to connectors, couplers, adapters, and cable assemblies, they began to offer attenuators, amplifiers, transceivers, receivers, distribution frames, switches, patch panels, distribution panels, etc. As previously mentioned, more sup pliers offered prewired shelves as well.

Finally, the number of offshore sup pliers marketing product in the United States continues to increase. Japanese suppliers include Fujikura (which has a joint venture with Alcoa), Sumitomo, Seiko, nec, ntt, Pacific Rundum, jae, Taiyo, and Suncall, among others. Taiwan is home to Hon Hai, foci, Pan International, and Chien Chang, among others. Diamond, Siemens, Radiall, Huber+Suhner, and Johanson, among others, represent European suppliers. Offshore manufacturers accounted for $162 million (16%) of the total North American market in 1996.

New products

There were many new product introductions last year. Among the most notable were the following:

MT and MU connectors, the demand for which continued to increase in 1996. The MU is now offered in two series. The first is the mu-a series, a line based on the SC technology commonly used in high-density-profile interconnect applications. The second is the mu-b series, used in backplane applications. Both of these connectors originated in Japan.

Lucent Technologies introduced the LC, which has a smaller footprint. The receptacle is the same overall package size as an SC connector. However, two separate plugs fit into the connector. Thus, in effect, capacity is doubled.

3M introduced the Jitney Optical Bus, jointly developed with IBM and Lexmark, which has a high data transfer rate of 1 Gbit/sec.

Although fiber optics have been dominated by long-line applications, the past year has seen demand accelerate in such new markets as data-intensive lans, subscriber broadband distribution architectures, and fiber-to-the-curb networks. As a result, factory shipments of fiber-optic connectors, couplers, adapters, cable assemblies, and prewired shelves in North America experienced double-digit growth in 1996 compared to 1995, reaching a total volume of $1.003 billion. Some niche companies reported increases of 30% to 50%. Meanwhile, offshore manufacturers grabbed a larger share of the market in 1996, reaching 16%.

Most suppliers agreed that price erosion remained very significant in 1996, from 10% to 15% for some fiber-optic connectors. Many suppliers expanded their product offerings last year as well.

Looking ahead, the five-year forecast for factory shipments of connectors, couplers, cable assemblies, and prewired shelves is expected to reach $1.631 billion by 2001, a compounded annual growth rate of 10.2%. u

Ken Fleck, of Santa Ana, CA-based Fleck Research, a division of Global Connector Research Group Inc., can be reached at www.fleckresearch.com.

The Top Ten

Connector, coupler, cable assembly, and adapter manufacturers, ranked by the dollar volume of 1996 sales figures, are as follows:

1 Lucent Technologies

2. 3M Telecom Systems Div.

3. amp Inc.

4. Siecor Corp.

5. adc Telecommunications Inc.

6. Alcoa Fujikura Ltd.

7. Siemens Components Inc.

8. Amphenol Fiber Optic Products

9. Methode Electronics Inc.

10. Molex Fiber Optics Inc.

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