Professionals in the cabling industry who have tried to purchase single-fiber connectors with 2.5-millimeter (mm) ceramic ferrules for multimode fiber anytime in the recent past know that they are in short supply. The reason these connector types are hard to find is that ceramic ferrules for multimode fiber are more difficult to come by than they were just a couple years ago.
There are several forces that have driven this market condition to its current state, but the situation will not be a long-term problem for the industry.
Most ceramic ferrules used in multimode connectors manufactured in the United States are imported from Japan. Kyocera and Adamant currently are the two biggest suppliers of ceramic ferrules to the U.S. market. Two other companies, Toto and Pacific Rundum, also supply ferrules to U.S. fiber-optic connector makers.
In 1998, the demand for ceramic ferrules for singlemode and multimode fibers in the U.S. market was 62 million units. Last year, the demand reached 124 million units. KMI Corp. has predicted that by 2005, the demand will reach 500 million units, for a compound annual growth rate of 36%.
Two years ago, the volume of ceramic ferrules from these suppliers was essentially equally split between those for singlemode and those for multimode connectors. But demand for singlemode connectors-and, therefore, demand for singlemode-connector ferrules-has significantly outpaced demand for multimode connectors and associated ferrules. By 2005, 76% of the products exported by the major ferrule suppliers will be for singlemode connectors; only 24% will be for multimode connectors. This shift is reflective of the rising demand for singlemode connectors.
To some extent, the shift in demand has impacted the way in which ferrule suppliers and their clients-makers of fiber-optic connectors-do business. For example, more than one ferrule supplier has reported that producing ceramic ferrules for multimode connectors is hardly worth the effort and expense, given the high demand for singlemode-based products. On the other side, some connector makers have reported that ferrule suppliers are demanding payment in advance for a year's worth of ferrules-in some cases, as many as one million pieces. Other connector makers must make volume commitments to the ferrule suppliers. And some have reported that they must purchase other, additional parts from the suppliers in order to guarantee receipt of the ferrules they need.
Despite all the bad news, we can look optimistically toward the future. I believe that in approximately one year, the ceramic-ferrule shortage will subside significantly, for four primary reasons:
- There will be a continuous increase in ferrule production from suppliers.
- The industry will soften to an extent, evidenced by some cancellations already reported.
- Some connector manufacturers have switched to the use of polymer ferrules, rather than ceramic.
- Ribbon-based or other multifiber technologies, some of which use MT connector types, are growing in popularity among equipment manufacturers and other organizations.
Pacific Rundum recently established a manufacturing facility, at which the company plans to produce 2 million units per month. Forty percent of that volume will be exported to the U.S., and 90% of the products made in the facility will be 2.5-mm ferrules for singlemode connectors. Simultaneously, the company set up another facility designed to output 4 million units monthly. That facility also predominantly will manufacture ferrules for singlemode connectors.
Additionally, polymer ferrules are rising in popularity, particularly in backplane technologies. Alternatives like polymer ferrules are not yet equal to ceramic ferrules in terms of performance, but through technological advances, these ferrule types are quickly gaining ground. And they remain more affordable than ceramic ferrules by approximately 20%.
Over the next several months, the economic forces that have caused the ceramic-ferrule shortage will give way to the economic forces and actions on behalf of ferrule suppliers that will make the shortage a thing of the past.
Angela Wang is an analyst with fiber-optic market-research firm KMI Corp. (www.kmicorp.com).