40/100 Gigabit Ethernet transceiver market forecasted to reach $545M by 2014

About two-thirds of these revenues will come from 40 GbE products, the analyst firm CIR believes.

Jan 15th, 2010

According to a new report from industry analysis firm CIR, the market for 40/100 Gigabit Ethernet (GbE) transceivers will reach $545 million in revenues by 2014, with about two-thirds of these revenues coming from 40GbE products. With standards due to be completed by the middle of 2010 and products arriving on the market CIR believes that the 40/100GbE space is ready to emerge, the report asserts.

Findings of the report include:

-- Suppliers of pre-standard 40/100GbE transceivers already include Avago, Finisar, Opnext, and Sumitomo, among others, and these early entrants will be key forces in shaping the 40/100-Gbps future. These first products are arriving in the form of active optical cables (AOCs) and are based on 10GbE technology with new MAC/PCS FPGAs.

-- Although OC-768 continues to be deployed in carrier networks, carriers are preparing for a leap to 40/100GbE. 100GbE has a key advantage over OC-768 in the lack of required dispersion compensation due to the use of coherent detection in the transceivers. CIR estimates that the market for 100GbE LR and ER transceivers will reach approximately $195 million in revenues by 2014.

-- CIR predicts that a "serial" 40GbE approach will better satisfy market requirements after 2013 (see "Ethernet Alliance starts 40G serial incubation effort") and that the current 4x10G CWDM variant may instead be a short-lived product. The main market for serial 40GbE will be in the access and metro markets; some parts of the long-haul core may be affected as well. By 2014, revenues from serial 40GbE are expected to reach almost $140 million.

-- On the demand side, the purchasing behavior of high-performance computing (HPC) centers will be important. This segment of the market will be where 40/100GbE will find some of its earliest and most enthusiastic users. In addition, CIR believes that the technology that HPC centers buy today is what the typical enterprise will be buying in three to five years.
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The report, 40/100GbE Markets: 2010 and Beyond, provides CIR's fourth assessment of this market. It includes seven-year forecasts (in volume and value terms) of port counts, transceivers, and TOSAs/ROSAs shipped, and components and materials used. Forecast breakouts by the various current IEEE variants are also included as well as assessments of the various proposed MSA formats.

The report also profiles and assesses the product/market strategies of major firms currently marketing or planning to market component and transceiver products in this space.

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