Global Optical Transceiver Sales Down 5% in Q1, In Line with Market Expectations and Poised for Rebound
Global optical transceiver sales fell 5% in Q1 2011 after reaching a record high in Q4 2010. This was driven by the fiber analysis and Ethernet market segments, which declined by 20% and 10%, respectively.
SONET/SDH and DWDM interface module sales saw only a slight decline, mainly due to strong user demand for 40G products.
In addition, FTTx transceiver and optical interconnect sales both increased in Q1 2011.
Q1 2011 sales highlights include:
- Continued growth in 10G transceiver shipments;
- Initial shipments of 16G SFP+ modules;
- A 20% increase in OC-768 short-reach transceiver sales;
- A 30% increase in 40G DWDM transponder sales revenue;
- A 50% increase in 100G LR4 module sales.
Inventory adjustments made by some optical component suppliers in late 2010 and early 2011 had a limited impact on the optical transceiver market in Q1 2011.
Given the significant sales increases across most products in 2010, the 5% decline in early 2011 is within the normal range acceptable to the market. Additionally, as many suppliers were renegotiating daily contract prices, the lower prices set on January 1 also affected Q1 sales.
Q2 sales guidance from major suppliers indicates that Ethernet transceivers and Fibre Channel transceivers, which saw the largest declines in Q1, are expected to rebound in Q2, driven by sustained strong demand for 10G and 8G SFP+ transceivers.
SONET/SDH sales are expected to remain stable, while DWDM module sales may trend downward in Q2 2011.
This market forecast is consistent with earlier market adjustments: data communications markets such as Fibre Channel and Ethernet respond more quickly to demand changes than telecommunications markets such as SONET/SDH and DWDM modules.
On an optimistic note, growth in the FTTx and optical interconnect markets is likely to continue into Q2 2011, which should help the global optical transceiver market return to normalcy.