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Optical components market led by Finisar

Industry Sector

Telecommunications

Published

25 January 2013

Author

Mike King

Type of News

Market

The global optical component market was valued at $3.6 billion in 2012, and has been forecast to hit a market value of $12.3 billion by 2019, driven by the availability of high speed processors and component devices that support increased speed and traffic on the optical networks.

Optical components are used to update the communications networks to manage broadband, to update the data centre networks to make them manage traffic with higher speeds, and to implement the backbone network for mobile communications.

The optical component market is intensely competitive. There is increasing demand for optical components as communications markets grow in response to more use of smart phones and more Internet transmission of data.

Among the top 10 suppliers, Oclaro and Neophotonics led the market with 17% sequential expansion. Meanwhile market leader Finisar contracted by 8%, the largest sequential decline among the top 10.

Growth came from North America and Japan, which helped the performance. However, suppliers cited continued weakness in Europe and now in China since the March quarter.

Everything is going mobile. This evolution is driven by mobile smart phones and tablets that provide universal connectivity. With 6 million cell phones in use and one million smart phones, soon to be 6 million smart phones, a lot of people have access to mobile communication.

Video, cloud-based services, the internet, and machine-to-machine (M2M) provide mobile connectivity. All these devices are networked and drive significant traffic to the broadband network, stimulating the need for optical transceivers.

The main challenge facing optical component players is not so much technical issues but more the requirement to continually decrease costs. This is not new but neither is it going away

Worldwide optical transport market revenues are forecast to grow rapidly through 2019. This is in the context of a world communications infrastructure that is changing. Technology is enabling interaction, innovation, and sharing of knowledge in new ways.

For more information on the optical components market, see the latest research: Optical Components Market

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