OPTICAL COMPONENTS
PLAYING A PART A
Here, we reveal what two specialist industry analyst firms predict will drive the market for optical components in 2023 and beyond
ccording to industry market intelligence specialist firm, LightCounting, the optical components market could be set to hit
$20bn by 2027, despite a weak year next year. Tis is according to the company’s updated Optical Components forecast. Te firm reiterated that the optical
communications industry entered 2020 with strong momentum. Tis is thanks to a surge in demand for DWDM, Ethernet and wireless fronthaul connectivity at the end of 2019, alongside the shiſt to working and schooling- from-home during 2020 and 2021 due to the pandemic creating stronger demand for faster and more networks. While supply chain disruptions continued, said LightCounting, the industry was able to largely overcome them, and the market for optical components and modules saw strong growth in 2020 and 2021. In a notification of the release of the updated
Optical Components forecast, which was authored by Vladimir Kozlov, Founder and CEO,
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LightCounting said: “We believe the transceiver market is on track for another year of strong (14%) revenue growth in 2022, aſter increasing by 10% in 2021, and 17% in 2020. However, market growth is projected to slow to 4% in 2023, prior to recovering in 2024-2025. Demand for optics is strong across all market segments, but continuing botlenecks in the global supply chain negatively impacted sales of 400G DR4 and 100G DR1+ transceivers to Amazon in the first nine- months of 2022. Meta increased its deployments of optics sharply this year, but its latest forecast for 2023 has been reduced substantially. We suspect that Amazon and other cloud companies may moderate their investments in 2023, if the current economic slowdown continues to negatively impact their advertising, streaming and retail businesses.”
Strengths and weaknesses Tis forecast projects a 11% CAGR between 2022 and 2027, which is not widely different
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from the 13% CAGR forecasted in October 2021. Tis is atributed to strong sales of DWDM and Ethernet optics accounting for the majority of market growth in 2021 – the segments that are projected to lead the growth between now and 2027. Sales of optical interconnects, mostly active optical cables (AOCs), will also increase at double digit rates over the next five years. Meanwhile, said the firm, PON sales for FTTx networks will remain steady, as the China market ends its 10G cycle and North America and Europe ramp up 10G PON deployments, driven by government funding programmes. 25G and 50G PON provide new growth later in the forecast period. Wireless fronthaul is one area of weakness, since
Despite a reduced forecast, the overall market is expected to roughly double in size, from $1.8bn in 2023 to $3.6bn in 2027”
Fibre Yearbook 2023
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