Market shift in fiber optic transceivers sparked by emergence of 10-Gigabit Ethernet, says iSuppli

Aug. 8, 2001--"The new generation of 10-Gigabit Ethernet products will be one of the brightest spots in the overall recovery of the networking equipment market segment that we believe will begin next year."

Aug 8th, 2001

While the demand for networking equipment has weakened significantly during the last three quarters, fiber optic component technology continues to move forward creating exciting opportunities for several companies in the emerging market for 10-Gigabit Ethernet transceivers and modules.

The latest forecasts from iSuppli Corp.'s market intelligence services group indicate that revenues for 10-Gigabit Ethernet fiber optic transceivers will be $208 million in 2002, growing to more than $2.7 billion by 2004. The emerging market for 10-Gigabit Ethernet modules is predicted to show similar high growth opportunities, rising from $497 million to more than $1.2 billion during the same period.

In iSuppli's latest report, "Fiber Optic Transceivers and Modules: Make Way for Integration," Scott Smyser, market manager for Optoelectronics/RF components for the company, indicated, "While SONET/SDH will continue to have its place in traditional long haul telco networks, high-speed Ethernet with its lower total cost is poised to become the technology of choice for metropolitan area networking (MAN) applications.

"With the finalization of the IEEE 802.3ae interconnect standard for 10-Gigabit Ethernet slated for March 2002, this category will quickly expand to displace SONET/SDH as the topology for Internet backbone installations in the last mile."

The 36-page iSuppli Market Intelligence Report analyzes the market drivers for 10-Gigabit Ethernet and SONET/SDH fiber optic transceivers and modules and examines the packaging issues that are being addressed to move the former devices into the competitive arena.

Revenue projections are provided for all classes of devices, and details of important Multi-Source Agreements (MSAs) -- key multi-vendor alliances that are driving the development of both standards and devices -- are discussed in detail. Newly announced developments such as vertical cavity surface emitting laser technology and parallel optics are also covered.

"Both suppliers looking to enter the 10-Gigabit Ethernet marketplace and prospective buyers of such equipment should plan on becoming part of one of the currently existing MSAs to keep at the forefront of new developments and ensure multiple sources of supply for the devices in the near future," Smyser noted.

"The new generation of 10-Gigabit Ethernet products will be one of the brightest spots in the overall recovery of the networking equipment market segment that we believe will begin next year."

About iSuppli:

iSuppli and its wholly owned subsidiary Stanford Resources offer market intelligence services that provide buyers and sellers of electronic components with timely information needed to make strategic component procurement decisions. For more information, visit www.isuppli.com.

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