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Optical components market drops 4% in Q1

Posted: 25 Jun 2007 ?? ?Print Version ?Bookmark and Share

Keywords:optical components market? manufacturing initiatives? Fibre Channel transceivers?

The latest report from market research firm Ovum RHK found that Q1 optical components market revenue reached $980 million, a 4 percent drop from Q4 2006 but was up 8 percent from the year-ago quarter.

According to the firm, most optical components vendors attributed the revenue decline to customer-based inventory and manufacturing initiatives. JDSU recorded a 3 percent sequential sales decline and lost market share on a rolling Q4 basis. Likewise, Finisar posted sales of $88 million for the quarter, a 10 percent sequential decline and the second largest drop among the top ten vendors. Finisar cited inventory correction for 4Gbps Fibre Channel transceivers and the impact of just-in-time manufacturing initiatives by two of its customers as contributing factors.

Among the top vendors, Bookham experienced the weakest q-on-q performance among. The company had pre-warned of weak sales to Nortel, its largest customer, and also suffered from inventory corrections. Opnext, on the other hand, posted the strongest results with a 6 percent gain over the previous quarter. Growth came from components supporting 10Gbps and above, which accounted for over 80 percent of Opnext's quarterly revenues.

Besides the components and modules supporting 10Gbps, 40Gbps and ROADMs, new products are being introduced to stir up market growth. "All other segments of the optical communications market are expanding, and we do not see any signs of a slowdown," said Daryl Inniss, VP and practice leader, communication components at Ovum. "We see optical component suppliers' revenues decline as a consequence of supporting customer-driven initiatives, and the effects are largely over. We expect the market to expand throughout the rest of 2007."

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