Optical modulator market set for 38% annual growth - Electronicast

22 January 2003 -- The global consumption value of the optical modulator market will increase at a "strong pace" of 38% per year over the next five years, from USD266m in 2002 to over USD1.3bn in 2007, says analyst Electronicast.

- US biggest market now with 40%
- China will take the lead before 2012

22 January 2003 -- The global consumption value of the optical modulator market will increase at a "strong pace" of 38% per year over the next five years, from USD266m in 2002 to over USD1.3bn in 2007, says analyst Electronicast.

Rapidly rising quantity growth will be offset by falling average prices. Between 2007 and 2012 consumption value growth will continue at an average annual rate of nearly 19%, to reach over USD3bn, says the report The Optical Modulator Global Market and Technology Forecast Consultant Service.

According to ElectroniCast's study, North America led global consumption of optical modulators in 2002, with a 40 percent relative market share. But this dominance will be erroded over the next decade.

Japan/Pacific Rim will gain market share lead
Eventually the regional markets share of long haul and high data rate links will migrate to Asia from North America. At the end of the forecast timeframe, new build long haul/high data rate Asia links will be attributed to China. Optical modulators used in the Japan/Pacific region will account for 40% of the global market share in 2012.

"Modulators serving the 10Gbit/ss space will not be the only products needed," said Stephen Montgomery, president of ElectroniCast Corp. "The 2.5Gbit/s space is very attractive, with 40Gbit/s to make an appearance this year. The main drivers are optical modulators used with high-speed transmitters that are required to transmit longer distances. The actual assembly of transmitters and boards will trend to the Asian region over the forecast period," Montgomery said.

The integration of laser diodes, photo diodes, transmitter/receiver (T/R) pairs, passive optical components and other optical components has started with the simplest level of hybrid integration in the lower data rate components (155 and 622Mbit/s). This will expand steadily into more complex hybrid integration, and into data rate components.

Monolithic integration will proceed with E/A-type modulators, and other elements with relatively higher incidence in higher data rate (2.5, 10 and 40Gbit/s), E-O modulators will expand to higher data rates; however, the package will be limited to hybrid integration.

Modulators in integration
Manufacturers have started development of integration of laser diode with modulators and optical waveguide fabricated on a single die. Both E-O and E/A modulators are undergoing R&D processes. The main driver for the integration of modulators with other components is economics; does the package deliver a less costly solution.

Electronicast adds, "Of course, there are application drivers, such as: a smaller package; lower loss; and greater control (temperature) of the single package.

Competitive alternative solutions to Electro-optical (E-O) including Electroabsorption (E/A), Indium Phosphide (InP) and Mach-Zehnder (M-Z) modulator integration and standalone solutions are under development. In these cases, packaging is the key driver, along with the main multiple: economics.

ElectroniCast summarises that the engineering and technology advances will be developed. However, without the cost-effectiveness of the component and a suitable package, meeting all specification and customer demands, the modulator product will not be successful.

The technology advancements are secondary to the packaging and cost issues.
In the 2003 ElectroniCast report, the optical modulator market is presented in segments:
- Electroabsorption (E/A) Type
- Electro-Optical (E-O) Type
- "Other" modulator type

In 2002, Electro-optical (E-O) optical modulators, typically utilizing lithium niobate as a base held 60% market share of global consumption. The Electroabsorption (E/A) market share will increase in relative market share over 45 percent by 2012.

The Optical Modulator Global Market and Technology Forecast Consultant Service is available, immediately, for a fee of USD12,000. The service includes debriefing sessions, inquiry services, database spreadsheets, study text and fibre-optic industry quarterly reports.

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