LightCounting: Transceiver industry well positioned to weather recession
MARCH 2, 2009 -- LightCounting forecasts worldwide transceiver sales will contract 14% in 2009 to $2 billion, with a modest recovery expected in 2010. Despite current market conditions, LightCounting expects growth in certain segments, including the latest 8-Gbps Fibre Channel transceivers, 40-Gbps DWDM modules, and active optical cables.
MARCH 2, 2009 -- The optical transceiver industry will contract sharply in 2009, but fare better than other industries, reveals the latest market forecast from LightCounting (search Lightwave for LightCounting).
Data traffic--the primary industry driver--continues to grow, requiring optical transceivers to be shipped for new platform deployments and to upgrade existing systems. Unlike the 2001 downturn, excess investment and network overcapacity are not issues; transceiver vendors have leaner inventories and are more robust, say LightCounting analysts. The latest down-cycle will weed out weaker suppliers, though ongoing industry consolidation will create stronger suppliers.
LightCounting forecasts worldwide optical transceiver sales will contract 14% in 2009 to total $2 billion from the $2.3 billion record sales achieved in 2008. LightCounting foresees a modest market recovery in 2010.
Despite current market conditions, LightCounting expects growth in certain segments, including the following:
• The DWDM market will grow faster than other telecom segments, driven by sales of 10- and 40-Gbps transponders. 40-Gbps transponder sales will continue to grow even in 2009, LightCounting expects to see first 100-Gbps line-side transponders in 2012.
• The Ethernet market will remain the largest segment throughout the forecast period. Adoption of 40- and 100-Gbps Ethernet interfaces will start in 2009, ahead of their standardization in 2010.
• Another exciting development is the race between XFP-E and tunable XFP in the DWDM market. LightCounting forecasts that adoption of tunable XFP will be rapid as it replaces tunable and fixed DWDM modules after 2010.
• The 8-Gbps Fibre Channel market continues to show strong growth as the market transitions from 4 Gbps. This trend will likely only accelerate.
• The active optical cable (AOC) is a rare market that will grow throughout the forecasting period as AOCs increasingly replace copper links.
"The transceiver market is one of the more recession-resistant segments of the communications industry, as proven during the 2001 telecom crash when transceiver vendors were among the few to emerge from the rubble," notes Vladimir Kozlov, founder of LightCounting. "No matter how bad the economy gets, every network upgrade will require optical transceivers."
This report presents historical data from 2006 to 2008 and a detailed market forecast through 2012 for SONET/SDH, Ethernet, Fibre Channel, CWDM, DWDM, FTTx transceivers, parallel modules, and active optical cables, sorted in over 120 product categories. The historical data account for sales of 30 transceiver vendors. The market forecast is based on LightCounting's model correlating transceiver sales with network traffic growth and projected FTTx subscribers.