LightCounting: Transceiver market returns to positive growth

DECEMBER 17, 2007 -- Sales of optical transceivers reached a record $526 million in the third quarter of 2007 and are likely to exceed $560 million in the remaining quarter, according to transceiver research company LightCounting.

DECEMBER 17, 2007 -- Sales of optical transceivers reached a record $526 million in the third quarter of 2007 and are likely to exceed $560 million in the remaining quarter, according to transceiver research company LightCounting (search for LightCounting). The LightCounting "Transceiver Sales Report" released today reported that the growth in Q3 2007 was primarily due to increased sales of DWDM modules and SONET/SDH transceivers, which both showed a 24% increase, respectively.

According to the author of the report and founder of LightCounting, Dr. Vladimir Kozlov, the industry's continued growth and support of technology advancement in lieu of developing new technologies are encouraging.

"Optical transceiver manufacturers faithfully supported the advancement of optical networking in 2007 by shipping close to 30 million modules in the first three quarters of this year," reports Kozlov. "Vendors ramped production of OC-768 and SFP+ modules in response to the increasing demand for higher data rate and small form factor modules."

Kozlov notes that suppliers of SONET/SDH transceivers were rewarded in Q3 2007 by a strong demand for their products despite advances of Ethernet and DWDM technologies in access and transport systems. "This was the best quarter for SONET/SDH transceiver vendors since Q1 2004, when sales increased by almost 50%," he says.

The transceiver market's return to growth comes as a welcomed relief after the steady growth during 2005 and 2006 of transceiver sales was temporarily interrupted by a 7% decline in the first quarter of 2007, followed by a flat second quarter. Profitability of optical transceiver manufacturing remains a challenge for vendors as the customer bases become increasingly more consolidated, contends LightCounting.

The report briefly discusses growth in emerging 40-Gbit/sec and 100-Gbit/sec markets and Carrier Ethernet deployment activity from the system vendors and carrier's perspectives, relative to the impact on transceiver sales.

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