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4 April 2007


Optical networking component market to approach $8bn by 2012

The market for optical networking components will grow from about $2.8bn in 2007 to $7.9bn in 2012, according to analyst firm CIR.

The optical components business will experience a significant ramp-up in revenues over the next few years due to the expansion of optically addressable markets, the firm reckons. Bringing optics closer to the customer is enabling volume opportunities for components manufacturers that have not existed in the past. Optical solutions are, in some cases, the only means available to building cost-effective, high-bandwidth access and enterprise networks.

CIR says that developments driving demand include the following:

  • Accelerating deployment in corporate networks and data centers of 10 Gigabit Ethernet (largely optical, whereas previous Ethernet versions have been dominated by copper media). The value of lasers used in Ethernet networks should grow from just over $300m in 2007 to $1.2bn by 2012, reckons CIR.
  • Passive optical networks (PONs) are becoming the technology of choice for residential access networks. CIR expects more large carriers to adopt ambitious PON deployment strategies in the next few years so, by 2012, the market for PON lasers and detectors should exceed $800m and the market for PON splitters should almost double to about $450m.
  • More wavelength division multiplexing (WDM). Carriers are increasingly adopting agile WDM technology in their core transport networks. CIR expects this to cause a rapid expansion in demand for reconfigurable optical add-drop multiplexers (ROADMs), WDM filters and tunable lasers. Tunable lasers should be the fastest-growing major segment of the components market, reaching almost $1bn by 2012.

Due to these factors, the optical components market should experience a min-boom over the next three years, but then settle down to annual growth of a very healthy 15%, forecasts CIR.