Report finds datacom market surged in 2013; telecom lagged
LightCounting believes that 100G will be a must-have technology in metro networks once 1G broadband access lines become commonplace and 10G becomes widely used in access aggregation.
Technology market research firm LightCounting reports that the market for optical components and modules posted 9% growth for the year with total sales exceeding $4.2 billion. The company projects a similar growth rate for the total market in 2014, but says the growing top-line numbers hide a lot of volatility. Some market segments almost doubled in 2013, while others declined by a third. Growth in annual sales of datacom optical products accelerated, reaching 20% in 2013, compared to 16% in 2012. However, the telecom optical components and modules market remains dormant, advancing by just 3% in both 2013 and 2012. These figures were released as a preview to LightCounting’s January 2014 Market Forecast Database.
The new report finds that sales of Ethernet optical transceivers were up 37% in 2013, exceeding $1.3 billion, and will remain the largest market segment in 2014, although the growth rate is expected to moderate. Shipments of 100 Gigabit Ethernet modules is expected to continue to ramp upwards in 2014, but growth in revenues will be modest, as competition among suppliers will push prices down. Sales of 40 Gigabit Ethernet transceivers reportedly more than tripled in 2013, mostly due to strong demand from mega-data centers, operated by companies like Google. However, LightCounting believes the market for 40-GbE transceivers may be volatile in 2014, given that a small number of large customers are driving the demand for these products.
Related: For optical transceivers, 10G equals 10M in 2013
Optics continues to gain share in data center interconnects at the expense of copper, according to LightCounting. SFP+ 10 Gigabit Ethernet (GbE) SR optical transceiver sales grew 26% in 2013 as 10GBase-T (100-m reach copper cable modules) remained on the fringes. SFP+ active optical cables (AOCs) are starting to compete with direct-attach copper cables for 1m to 5m connections. Sales of 10-GbE products should sustain the market’s growth in 2014, says the researcher, compensating for any potential volatility in the sales of other products. The telecom market is a different story. Sales of 10G DWDM transceivers fell by 11% and 16% in 2012 and 2013, respectively, although the market researchers expect the sector to rebound in 2014.
The market is overdue for growth, according to LightCounting, which has previously said that operators would be wise to invest more, especially in 100G. “It is possible that the telecom market will have a better year in 2014,” the researcher said in a statement. “LightCounting data suggests that the datacom market responds faster to changes in economic outlook than the telecom industry, which could lag a recovery by three-to-five quarters.”
LightCounting believes that 100G will be a must-have technology in metro networks once 1G broadband access lines become commonplace and 10G becomes widely used in access aggregation. This is just starting to happen now, the company says, but it may take ten years for 1G/10G/100G lines to become widespread throughout access/aggregation/transport layers of metro networks, respectively.