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Optical components market to plunge by 45 percent

Posted: 07 Jan 2003 ?? ?Print Version ?Bookmark and Share

Keywords:optical component? network industry? sonet/sdh gear? dwdm transport? switching equipment?

Once considered to be one of the fastest growing segments in the communications infrastructure industry, the optical components sector has been devastated by the dramatic downturn in the networking industry. iSuppli Corp. predicts in its report "Optical Components Struggle to See the Light in Telecom" that the total market for optical components used in SONET/SDH gear and in DWDM transport and switching equipment will fall to $1.69 billion this year, a 45 percent decline from 2001 levels of $3.17 billion.

As the telecom industry continues to be sluggish, the outlook for the optical components market remains bleak through 2005. Following two years of dramatic contraction in 2001 and 2002, the market research firm predicts that the market will bottom out in 2003, before returning to modest single-digit growth rates in 2004 through 2006.

A significant portion of the optical component market is for lasers and receivers in the SONET/SDH market. iSuppli estimates that in 2001, optical components for SONET/SDH gear accounted for approximately 42 percent of the total available market (TAM). Between 2003 and 2006, more than 40 percent of the total spending will be for SONET/SDH optical components - primarily lasers and receivers for transceivers.

In the long-haul and ultra-long haul networks, DWDM systems are seriously challenging SONET/SDH gear for market share. Unfortunately, this networking segment was significantly overbuilt between 1997 and 2000, and continues to suffer from excess data handling capacity.

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