Optical network market, led by compact modular systems, up 7% in 3Q20: Cignal AI
Sales of compact modular systems – small platforms designed for use in open, disaggregated architectures -- grew 24% year-over-year in the third quarter of 2020 (3Q20), according to Cignal AI. The market research firm states in its newly released Transport Applications Report that this popularity helped the overall optical network systems hardware space to exceed the previous year’s revenue totals by 7% during the quarter. Meanwhile, interest in 400ZR pluggable optical modules is growing so fast that sales threaten to outstrip supply.
Sales of compact modular systems were particularly strong in Asia-Pacific, which saw spending on such platforms jump more than 75% during 3Q20. Huawei (mostly in China), Fujitsu (in Japan), and Nokia each more than doubled their sales in the region. Globally, Ciena saw its compact modular sales spike 18% versus the year-ago quarter to maintain its market share lead in this niche.
“Compact modular is gaining popularity with a wider set of network applications and operators due to the continued adoption of disaggregation outside cloud and colocation,” said Scott Wilkinson, lead analyst at Cignal AI. “The market saw extraordinary growth in Asia-Pacific over the last two quarters, with sales in the region now approaching those of EMEA.”
That said, Cignal AI predicts that growth in compact modular sales will decelerate to the low single digits in 4Q20 as capex budgets empty, particularly in North America.
Elsewhere, the quarter also saw the market for 400ZR optical modules begin to take shape. Cignal AI reports that several hundred such modules shipped for testing and evaluation in the quarter. “The demand pipeline for 400ZR remains strong and operators are pleased with the prototypes under evaluation,” said Andrew Schmitt, directing analyst at Cignal AI. “Acacia had a huge quarter thanks to a large buildout at Amazon AWS.”
Cignal AI remains bullish on pluggable coherent optics, which the market research firm projects will compose 40% of the high-performance optical market by 2024 (see “Cignal AI: Expect coherent pluggables wave to reshape networks” and the figure at the top of the page). Overall, shipments of fixed 400-Gbps and above coherent ports reached more than 35,000 ports in 3Q20, a sequential increase of 65%.
Cignal AI’s Transport Applications Report provides market size, market share, and forecasts for revenue and port shipments for optical equipment designed to meet specific applications, including coherent optical technology, compact modular, and advanced packet-OTN switching hardware. Vendors examined include Acacia, ADTRAN, ADVA, Ciena, Cisco, Ekinops, Fujitsu, Huawei, Infinera, Inphi, NEC, Nokia, NTT Electronics (NEL), Ribbon Communications, and ZTE.
For related articles, visit the Business Topic Center.
For more information on high-speed transmission systems and suppliers, visit the Lightwave Buyer’s Guide.
To stay abreast of optical communications technology, subscribe to Lightwave’s Enabling Technologies Newsletter.
Stephen Hardy | Editorial Director and Associate Publisher, Lightwave
Stephen Hardy is editorial director and associate publisher of Lightwave and Broadband Technology Report, part of the Lighting & Technology Group at Endeavor Business Media. Stephen is responsible for establishing and executing editorial strategy across the both brands’ websites, email newsletters, events, and other information products. He has covered the fiber-optics space for more than 20 years, and communications and technology for more than 35 years. During his tenure, Lightwave has received awards from Folio: and the American Society of Business Press Editors (ASBPE) for editorial excellence. Prior to joining Lightwave in 1997, Stephen worked for Telecommunications magazine and the Journal of Electronic Defense.
Stephen has moderated panels at numerous events, including the Optica Executive Forum, ECOC, and SCTE Cable-Tec Expo. He also is program director for the Lightwave Innovation Reviews and the Diamond Technology Reviews.
He has written numerous articles in all aspects of optical communications and fiber-optic networks, including fiber to the home (FTTH), PON, optical components, DWDM, fiber cables, packet optical transport, optical transceivers, lasers, fiber optic testing, and more.
You can connect with Stephen on LinkedIn as well as Twitter.