Ovum: Optical component sales flat in 2Q12

Market research and analysis firm Ovum reports that worldwide sales of optical components hit $1.6 billion in the second quarter of 2012 (2Q12), meaning the market was essentially flat sequentially.

The leveling in the quarter came after sequential growth in the first quarter, the company says in its new “Market Share Alert: 2Q12 Global OC.” However, Ovum attributes the first quarter’s positive performance more to recovery from supply shortages caused by flooding in Thailand rather than a pickup in demand (see "Ovum: Optical component sales climb 5% in 1Q12"). In fact, Ovum laid the blame for the lack of momentum in 2Q12 to soft demand caused by macroeconomic uncertainty.

That said, not every supplier treaded water. “Among the top 10 suppliers, Oclaro and Neophotonics led the market with 17% sequential expansion,” said Daryl Inniss, practice leader, components telecoms at Ovum. “Meanwhile market leader Finisar contracted by 8%, the largest sequential decline among the top 10. Growth came from North America and Japan, which helped the performance. However, suppliers cited continued weakness in Europe and now in China since the March quarter.”

Despite the overall weakness in demand, there remains pull for components to support high-speed transmission, from 10 Gbps to 100 Gbps. “Strong client- and line-side demand was reported for the 40 and 100G, while the tunable XFP appeared to post a weaker revenue performance than in previous quarters,” Inniss added.

A return to growth is imminent, however. “The long-term outlook for optics is positive as bandwidth demand continues to grow,” Inniss asserts. “The market is back to manufacturing capacity from the Thai floods, with Fabrinet opening its new manufacturing facility, and has returned to pre-flood capacity.”

Ovum predicts 3Q12 will see approximately 4% sequentially growth, with optical component sales for the full year reaching $6.6 billion.

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