Optical component and module sales to grow despite capex declines: LightCounting

April 28, 2016
Despite slowing capital expenditures (capex) among service providers, LightCounting expects sales of optical components and modules to grow 18% this year and enjoy a 12% compound annual growth rate of 12% from 2016 through 2021.

Despite slowing capital expenditures (capex) among service providers, LightCounting expects sales of optical components and modules to grow 18% this year and enjoy a 12% compound annual growth rate of 12% from 2016 through 2021.

In its new "Optical Communications Market Forecast Report," the market research firm says that component and module sales remained strong in 2015 in the face of declining telco capex and lower than projected spending growth among cloud companies. The move to higher data rates helps explains the sector's resiliency, according to LightCounting. Optical transmission assumes a larger share of connectivity costs as data rates go up; in particular, modules based on complex modulation formats command higher prices, the company points out.

For example, excluding the FTTx and wireless segments, global sales of optical transceivers rose 11% in 2015, averaging 9% CAGR in 2010-2015. Sales of FTTx transceivers and BOSAs jumped 58%, offsetting an 18% drop in sales of wireless fronthaul optics during the year.

LightCounting expects capex among the 15 leading network operators will decline this year. This includes the Asian market. In fact, the market research firm expects telco capex will shrink 7% to $178 billion dollars in 2016. Fortunately for technology vendors, the market research firm expects Internet and cloud companies will spend between $43 and $48 billion on servers, networks, and other infrastructure in 2016, up a bit from the $42.6 billion they spent in 2015.

With these trends in mind, LightCounting projects in its new report that worldwide sales of optics used in Ethernet, Fibre Channel, CWDM/DWDM, SONET/SDH, and active optical cable/electro-optic module applications will grow 18% in 2016 and 12% CAGR in the 2016-2021 timeframe. FTTx and wireless optics sales are more difficult to predict because of extreme market volatility; nevertheless, LightCounting forecasts such products will contribute about $2 billion to the total market in 2021.

"This forecast hinges on the adoption rates of several new technologies," commented Dr. Vladimir G. Kozlov, founder and CEO of LightCounting Market Research. "100G Ethernet and DWDM optics, flex-grid WSS [wavelength-selective switch] modules, and 10G PON transceivers are some of the key products to watch in 2016."

For related articles, visit the Business Topic Center.

For more information on optical components and suppliers, visit the Lightwave Buyer's Guide.

Sponsored Recommendations

New Optical Wavelength Service Trends

July 1, 2024
Discover how optical wavelength services are reshaping the telecom landscape, driven by rapid expansion and adoption of high-speed connections exceeding 100 Gbps, championed by...

Data Center Interconnection

June 18, 2024
Join us for an interactive discussion on the growing data center interconnection market. Learn about the role of coherent pluggable optics, new connectivity technologies, and ...

ON TOPIC: Innovation in Optical Components

July 2, 2024
Lightwave’s latest on-topic eBook, sponsored by Anritsu, will address innovation in optical components. The eBook looks at various topics, including PCIe (Peripheral...

The Journey to 1.6 Terabit Ethernet

May 24, 2024
Embark on a journey into the future of connectivity as the leaders of the IEEE P802.3dj Task Force unveil the groundbreaking strides towards 1.6 Terabit Ethernet, revolutionizing...