OPTICAL COMPONENTS
“ LightCounting Global sales of optical transceivers 2016-2027 by segment
5G network deployments in China are reaching completion. LightCounting predicts this segment will return to growth in 2026-2027 with the onset of 6G deployments. In a separate report from LightCounting,
also authored by Kozlov, the firm highlighted that demand for Ethernet switches from cloud companies created a new market segment for very high-bandwidth switches and switch ASICs. It also transformed the industry supply chain as cloud companies started using internally designed Ethernet switches, opening these ‘white box’ designs to a broader community. Te Ethernet switch ASICs report was first
published in April 2022, and the update was released in October of the same year. Te report covers the switching ASIC market, looking particularly at high-bandwidth (3.2T and above), low latency chips deployed in cloud data centres. Te updated report included 3.2T/6.4T
chips in addition to the higher-speed products, which added around $1bn to the total market
size compared to its April estimate. Te forecast includes chips sold in the merchant market, as well as chips used by Cisco in their own equipment. Similarly to the Optical Components report, the Ethernet switch ASICs report has a lower forecast for 2023 compared to the April 2022 edition. In a press notification, Kozlov said: “Tis reflects reduced guidance by the leading cloud companies for data centre upgrades planned for next year. Despite a reduced forecast, the overall market is expected to roughly double in size, from $1.8bn in 2023 to $3.6bn in 2027.”
Co-packaged optics A big topic for industry and one that is discussed within the report is the adoption of co-packed optics (CPO) in 25.6T and 51.2T Ethernet switches by cloud companies. Kozlov continued: “Assuming that 15% of 25.6T and 51.2T switch chips will have half of their ports equipped with CPO adds $500m to the market size in 2027, increasing it from $2bn to $2.5bn. Te impact of CPO adoption is not as significant as we estimated in the first edition of this report, published in April, because of revised assumptions on pricing of switching ASICs.” Looking at semiconductors, independent
Total semiconductor revenue sequential growth
Fibre Yearbook 2023
analyst and consultancy firm Omdia’s Competitive Landscape Tracker revealed that the second quarter of 2022 was the third consecutive quarter of weakening revenue growth for the semiconductor market, with a decline in revenue for 2Q22 of 1.9% from $161.2bn in 1Q22 to $158.1bn in 2Q22. According to Omdia, the decline followed the longest sustained period of semiconductor growth of eight uninterrupted quarters. Cliff Leimbach, Senior Research Analyst at
We expect the remainder of 2022 and potentially the first half of 2023 will be an adjustment period as the market returns to normalcy”
Omdia, said: “Te decline in semiconductor revenue has led to 2Q22 being recorded as the third-worst performing Q2 in 20 years of Omdia tracking the market.” However, he did note a light at the end of the tunnel, saying: “Changes are coming aſter an unprecedented run of demand growth from work-from-home and educate-from- home activity. Given the cyclical nature of the semiconductor market, we expect the remainder of 2022 and potentially the first half of 2023 will be an adjustment period as the market returns to normalcy.” According to Omdia’s report, a contributing
factor in the semiconductor decline is Intel’s second quarter performance in 2022 and a decline of 13% in its microprocessors (MPU) business in the first quarter of 2022. India said that the drop from a market that “represents more than 10% of the total semiconductor market” pulled the entire market down. In addition, said Omdia, the US dollar
strengthened against many foreign currencies in the second quarter of 2022 from quarter 1. Tose organisations that reported revenue in other currencies, said the firm, saw a fall in revenue when converting to US dollars, while some non-US companies experienced a quarterly revenue increase in local currency, but a negative quarterly increase in US dollars. Together, said Omdia, these factors have “exerted a downward influence on the total semiconductor market revenues in US dollars”. According to the report, a review of the top
semiconductor firms’ performance demonstrated that Intel and NVIDIA’s combined decline was $3.7bn in the second quarter of 2022. Tis was atributed to weak consumer demand for products and OEMs holding less inventory in uncertain times. Te only other top-10 firm by revenue to decline in the period was Qualcomm. Te remaining companies increased in revenue during the quarter. Finally, said Omdia, the memory market increased slightly at just over 1%. Samsung is the number one dynamic random- access memory (DRAM) and NAND firm. India cited this, alongside Intel’s results, as solidifying Samsung as the top semiconductor firm according to revenue. n
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Omdia
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