Transceiver market set records in '08, braced for uncertain '09

DECEMBER 22, 2008 -- Sales of optical transceivers were an all-time record of $603 million in the third quarter of 2008, while year-on-year growth was 14%, say LightCounting (search for LightCounting) analysts.

The analyst firm expects Q4 transceiver sales to decline by between 5% to 15% across all the main telecom and datacom transceiver segments. This decline will likely also continue into Q1 2009. The good news is that data traffic growth, the fundamental driver of capacity, remains strong.

Record optical transceiver sales of $603 million were recorded in the third quarter of 2008 despite first signs of a recession towards the quarter's end. Strong sales of OC-192 DWDM and SONET/SDH transceivers for metro and long-haul networks were the main reasons for market growth. But signs of the recession were evident, with the optical access market declining by 9% in the third quarter, LightCounting reveals. GPON sales were marginally up, but EPON transceiver sales, the dominant passive optical network standard, declined.

In datacom, there was also an 11% decline in 10-Gigabit Ethernet module sales due mainly to the drop in SFP+ and XENPAK shipments. This follows record 10-Gigabit Ethernet module sales of $93 million in the second quarter of 2008. Strong growth in 8-Gbps SFP+ Fibre Channel modules compensated for declines in 2-Gbps and 4-Gbps transceivers, resulting in a flat market overall.

LightCounting expects 2008 to be a record year for optical transceivers sales despite the expected stated decline across all segments in the final quarter of the year. In 2009, the effect of the recession will see an increase in company acquisitions as well as companies exiting the business, even some large players, analysts forecast. LightCounting says it also expect to see more examples of creative, strategic alliances.

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