Optical transceiver sales to shrink in 2023: LightCounting
Following a prediction that sales of Ethernet transceivers will decline this year (see “Slowdown at Meta leads LightCounting to call for 2023 Ethernet transceiver sales decline”), LightCounting now believes the entire space will dip into the red in 2023. That 10% Ethernet device retreat, coupled with an expected 30% reduction in sales of wireless fronthaul modules, will lead to a 1% overall decline in optical transceiver sales this year, the market research firm now predicts in its most recent Market Forecast Report.
As cited in the earlier Ethernet transceiver sales forecast, LightCounting expects Amazon and other cloud companies plan to slow the aggressive growth in spending seen in previous years. The market researchers now believe capex from the Top 15 internet content providers (ICPs) will grow “only” 4% in 2023 after several years of double-digit increases. Meanwhile, telecom service providers plan to reduce their capex in 2023, although they will continue to upgrade their access networks.
That said, as the chart above highlights, LightCounting does expect growth the return in 2024. Investments in AI infrastructure will remain a priority for the ICPs, the market research firm notes. Such initiatives should sustain the market for high-bandwidth, low latency Ethernet and InfiniBand switches (and the transceivers they will require) in the next five years. Deployments of optical circuit switches in AI clusters also should expand beyond Google’s data centers, LightCounting believes.
On the telco side, sales of 50G and 100G fronthaul transceivers should increase in the 2026-2028 timeframe as telecommunications services providers begin to prepare and roll out early 6G deployments. Meanwhile, PON optics sales should remain strong as deployments of FTTx continue to increase due to government stimulus programs.
LightCounting’s Market Forecast Report presents forecasts for optical transceivers used in the telecom and datacom sectors and includes chapters reviewing the health and spending outlook for both CSPs and ICPs, as well as explanations of forecast drivers and assumptions for each of the six product segments covered: Ethernet, WDM, Fronthaul, Backhaul, FTTX, and Optical Interconnects. The accompanying Excel database includes unit and sales forecasts for over 200 product categories.
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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.