Optical transceiver sales grew in 3Q18, but not for everyone: LightCounting

LightCounting states in its “December 2018 Quarterly Market Update Report” that optical transceiver sales grew a respectable 8% year-on-year in the third quarter of 2018. However, it noted that not every optical module vendor reaped the benefits. And the have/have not dynamic should continue into the year’s fourth quarter. The market research firm also stated that optical transceiver sales should continue upward in 2019, “with the occasional pothole.”

Strength in optical transceiver demand from data center operators and a 48% year-over-year jump in DWDM 100G port-equivalents explains the 8% overall growth rate. Sales of 200G-capable ports grew 189% and 400G-capable shipments, which LightCounting described as “still small,” climbed 272% versus the year-ago quarter as well – and would seem to bode well for 2019.

Several optical module vendors saw their sales increase against 3Q17 as a result. They include II-VI (+20%), Accelink (+18%), Innolight (+18%), Lumentum (+49%), Neophotonics (+15), and Sumitomo (+12%). However, a few other firms saw sales move in the other direction, with AOI (-36%), Acacia (-10%), and Oclaro (-15%) among the unlucky ones.

This dichotomy should continue in 2018’s final quarter, based on guidance optical transceiver vendors have provided, LightCounting reports (see graph above). The optimistic include II-VI, Acacia, and NeoPhotonics. However, Lumentum had to temper its formerly sunny outlook for the quarter (see “Lumentum reveals bad news for 2Q19”), and Applied Optoelectronics is still fighting through production problems, LightCounting points out.

Turning to 2019, LightCounting points out that its most recent five-year forecast calls for double-digit increases in demand for Ethernet, WDM, wireless transceiver, and active optical cable technology that should benefit transceiver suppliers. In particular, LightCounting analysts like the sales prospects for 100GbE Ethernet transceivers in several iterations, 200G DWDM (CFP2 ACO, CFP2 DCO), and 25G SFPs for 5G fronthaul. However, it points out that increasing trade tensions between the U.S. and China could throw cold water on the market. In particular, the fall out from the current arrest of Huawei’s CFO bears watching, especially if the case leads to sanctions on Huawei similar to those imposed on ZTE, LightCounting warns.

The “December 2018 Quarterly Market Update Report” offers data and commentary on the Q3 2018 financial results of communications services providers and internet content providers, as well as makers of networking hardware, optical components, modules, and semiconductors. It also includes shipment data through Q2 2018 and estimates for Q3 and Q4 2018, for more than 100 optical transceiver and wavelength-selective switch products, obtained via LightCounting’s vendor shipment survey.

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For more information on optical transceivers and suppliers, visit the Lightwave Buyer’s Guide.