LIGHTCOUNTING - Optical Communications Market … · 2017-05-03 · Market Survey data Financial...

LIGHTCOUNTING Market Research on High-Speed Interconnects Datacom, Telecom, CATV, FTTX, Consumer markets © Copyright 2011 LightCounting LLC All material proprietary and confidential.

Your Connection to Market Intelligence

3/22/2013 1

LIGHTCOUNTING


Forecast Methodology: Part 1

3/22/2013 2

Fall in Seattle

Winter – see fall

Spring – see winter

2 seconds later


Telecom Seasons

3/22/2013 3

0%

10%

20%

30%

40%

50%

60%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Internet traffic growth DWDM network bandwidth growth


Forecast Methodology: Part 2

3/22/2013 4

Temperature data Radar data Barometer data Seasons Climate change

Historical records Modeling Validation

Market Survey data Financial reports Economic cycles New technologies New applications

Historical records Modeling Validation


Forecasts that sell newspapers

3/22/2013 5

All-Optical Networking will change the world Raman amplifiers will replace EDFAs SONET is dead, 40G is dead, Fibre Channel is dead Silicon Photonics and/or InP integrated circuits will change the world


Scaling Growth of Network Bandwidth

3/22/2013 6

0%

10%

20%

30%

40%

50%

60%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017


-

0.10

0.20

0.30

0.40

2009 2010 2011 2012

Re

lati

ve B

and

wid

th

(no

rmal

ize

d u

nit

s)

10 Gbps

40 Gbps

100Gbps

Annual growth in network bandwidth = Number of Ports shipped per year x Data Rate


CapEx of top 15 service providers

3/22/2013 7

$140,000

$145,000

$150,000

$155,000

$160,000

$165,000

$170,000

2007 2008 2009 2010 2011 2012

Tota

l Cap

Ex (

$M

)

$0

$20,000

$40,000

$60,000

$80,000

2007 2008 2009 2010 2011 2012

Cap

Ex (

$M

)

Asia

Europe

US

• Service providers were able “to use CapEx more efficiently in 2012” (purchase more equipment with less money).

• In the end of 2012, AT&T and Deutsche Telecom disclosed plans for boosting annual CapEx by 10-15% in 2013-2015 and it is very likely that their competitors will have to increase infrastructure investments as well.


Revenue and profits of telecom equipment vendors

3/22/2013 8

Companies 2008 2009 2010 2011

Content Providers 12% 16% 16% 14%

Service Providers 6% 10% 12% 8%

System Vendors 5% 5% 8% 6%

IC Vendors 10% 9% 22% 20%

OC and Module Vendors 2% (4%) 3% (1%)

Net Margin Across the supply chain (GAAP)

$0

$25

$50

$75

$100

2009 2010 2011 2012

Equ

ipm

en

t R

eve

nu

e (

$B

) Ciena (Product revenue)

ZTE (Network revenues)

Fujitsu (System + Network revenue)

Alcatel Lucent (total less software,services)

Ericsson (Networks revenue)

NSN (all revenues)

Huawei (Carrier + Enterprise revenue)


Revenue of component vendors

3/22/2013 9

$-

$200

$400

$600

$800

$1,000

Qu

arte

rly

Rev

en

ue

s ($

M)

Opnext

Oplink

Oclaro

NeoPhotonics

JDSU

Finisar

Emcore

Avago

$-

$200

$400

$600

$800

Q1

201

1

Q2

201

1

Q3

201

1

Q4

201

1

Q1

201

2

Q2

201

2

Q3

201

2 E

Q4

201

2 E

Sa

les (

$M

)

Global Optical Transceiver Market

• Strong demand for datacom products benefits Avago, Finisar and other vendors

• NeoPhotonics reported increasing sales of high end products

• Emcore is ramping up tunable laser sales

• Gigalight reported 20% increase in 2012 sales

• Genuine Opto, HiSense, WTD and many other vendors in China reported higher sales in 2012


“Iron curtains” in Cyber Space?

3/22/2013 10

Will this help to moderate competition in the global optical communication market?


Market is highly non-linear to fluctuations in demand

3/22/2013 11

0%

10%

20%

30%

40%

50%

60%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017


0%

10%

20%

30%

40%

50%

60%

70%

80%

0% 10% 20% 30% 40% 50%

Mar

ket

Gro

wth

Rat

e

Internet Traffic Growth Rate

Small changes in demand may lead to sharp increases in sales

Shortage of components is great for profitability of suppliers


DWDM port shipments

3/22/2013 12

-

0.20

0.40

0.60

0.80

1.00

1.20

2009 2010 2011 2012 2013 2014 2015 2016 2017

Rel

ativ

e B

and

wid

th (

no

rmal

ized

un

its)

10 Gbps

40 Gbps

100 Gbps

Number of DWDM ports * data rate

How will this growth translate into revenue?

This data is available in LightCounting Forecast Report: http://www.lightcounting.com/Forecast.cfm

http://www.lightcounting.com/Forecast.cfm


Telecom Transceiver Market

3/22/2013 13

$-

$200

$400

$600

$800

$1,000

$1,200

2009 2010 2011 2012 2013 2014 2015 2016 2017

Sale

s ($

M)

SONET/SDH CWDM / DWDM FTTx Wireless Infrastructure




Datacom Transceiver Market

3/22/2013 14

$-

$500

$1,000

$1,500

$2,000

2009 2010 2011 2012 2013 2014 2015 2016 2017

Sale

s ($

M)

Ethernet Fibre Channel Optical Interconnects




10 GigE shipments will continue to ramp

3/22/2013 15

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Un

its

1 Gbps

10 Gbps

40 GigE

100 GigE

This data is available in LightCounting Report on 40G and 100G Data Center Interconnects:

http://www.lightcounting.com/DataCenter.cfm



10 GigE ports: optical and copper

3/22/2013 16

-

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

copper optical


Growth in Data Center Bandwidth

3/22/2013 17

0%

10%

20%

30%

40%

50%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Internet traffic growth Ethernet optical Ethernet optical and copper


Data Centers become more efficient

• Mega-data centers replace many small and mid-size data centers and improve utilization efficiency of storage and networking equipment.

• Server virtualization and software defined networking also lead to more efficient utilization of equipment and interconnect bandwidth. – “Expedient Communications, a cloud service provider that deployed

10-GbE switches on its E5-powered cloud offering. Expedient reported a 23% reduction in the number of switch ports and cables needed on its network, a 14% reduction in infrastructure costs and a 150% increase in server bandwidth”

3/22/2013 18


Upcoming Reports

• 40G and 100G Datacenter Interconnects (March 2013): – http://www.lightcounting.com/DataCenter.cfm

• Market Update Report and Quarterly Sales (March 2013): – http://www.lightcounting.com/marketupdate.cfm

• State of the Industry Report (May 2013): – http://www.lightcounting.com/2012_SOTIR.cfm

• AOCs, EOMs and Si-Photonics (May 2013) – http://www.lightcounting.com/activeoptical_2012.cfm

3/22/2013 19



http://www.lightcounting.com/marketupdate.cfm



http://www.lightcounting.com/2012_SOTIR.cfm

http://www.lightcounting.com/2012_SOTIR.cfm

http://www.lightcounting.com/activeoptical_2012.cfm

http://www.lightcounting.com/activeoptical_2012.cfm


Long term view

3/22/2013 20

$-

$1,000

$2,000

$3,000

$4,000

$5,000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Sale

s ($

M)

• The market will remain cyclical • Many new technologies will find a place in the market, but their impact may

be overestimated

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LIGHTCOUNTING - Optical Communications Market … · 2017-05-03 · Market Survey data Financial...

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