Opto-Electronic Transceiver Industry Report 2010

Ten years after the telecom bubble burst, the optical components and transceiver industry is once again on the rise. The current upswing offers a well deserved break for suppliers struggling through years of modest market growth, combined with fierce competition among suppliers and very demanding customers. The question is whether present successes will prove sustainable for more than just a few quarters. While clearly some of the increased activity is a result of several slow quarters in late 2008 and early 2009 as customers are replenishing inventories, a few factors suggest that accelerated market growth will be sustained for several years:

• The analysts data on optical transceiver shipments in 20042009 suggest that investments in network infrastructure were lagging traffic growth by 10-15% per year, so increased investment may be required now to catch up.
• Major upgrades to datacenters worldwide are clearly underway, fueled by online applications and services. New datacenters require much more optical connectivity than in the past because of increased data rates and changes in datacenter architecture.
• Increasing usage of wireless bandwidth triggered substantial upgrades to wireless back haul, driving demand for high-data-rate optical transceivers.
• Sales of tunable transceiver modules and ROADM are benefiting from higher expectations to timelines of network deployment and restoration, as these components reduce the time required to set up or reconfigure networking systems.