Thanks for visiting Fibre Systems.

You're trying to access an editorial feature that is only available to logged in, registered users of Fibre Systems. Registering is completely free, so why not sign up with us?

By registering, as well as being able to browse all content on the site without further interruption, you'll also have the option to receive our magazine (multiple times a year) and our email newsletters.

China’s optical hardware market continues to grow

Share this on social media:

Despite concerns from component makers, China’s optical hardware market continues to grow, according to Cignal AI, a networking component and equipment market research firm. In fact, optical revenue in China is up 13 per cent for the first half of 2017 compared to the same period in 2016, the firm states in its second quarter Optical Hardware Report.

The weak demand reported by optical component makers is a result of an ongoing inventory correction (primarily at Huawei), rather than a signal of weak end market demand. Huawei and ZTE both reported record shipments of 100G coherent ports in China during the quarter. The companies also showed strong revenue performance in the region.

“Demand for optical hardware in China is not slowing down, and equipment vendors are universally providing positive guidance for North America during the second half of the year,” said Andrew Schmitt, lead analyst for Cignal AI. “Operators around the world are shifting spending from long haul to metro WDM, though this shift is materialising into gains for only a few vendors.”

Meanwhile, North American spending increased quarter-over-quarter as the region experiences a shift in spending from long-haul to metro WDM. This trend is creating greater demand for higher speed coherent ports, which are evolving from 200G to speeds as high as 400G later this year (see Cignal AI: 2017 will be the year of metro 200G).

Ciena and Cisco are the primary beneficiaries of the double-digit year-over-year growth in North American metro WDM, according to Cignal AI. Both companies grew market share, with Ciena’s North American optical equipment revenue increasing by 21 per cent year-over-year.

Outside China and Japan, the rest of the Asia Pacific countries experienced 20 per cent year-over-year growth. This was particularly fuelled by India’s Reliance Jio, which is purchasing substantial amounts of equipment from Ciena and Nokia as part of an aggressive 4G LTE expansion in the country.

But it’s not all sunshine and roses in Europe, Middle East and Africa (EMEA), where revenue dropped substantially compared to the year prior. This stems from sharp declines in spending in the long-haul WDM and submarine systems markets, while metro WDM spending remained flat, according to Cignal AI.

Issued quarterly, Cignal AI’s Optical Hardware Report examines optical equipment revenue across all regions and equipment types, including shipment information and guidance from individual equipment companies. Forecasts are based on spending trends in each region and the equipment types within those regions.



Related news

Recent News

01 June 2020

A team of researchers from RMIT, Monash and Swinburne universities in Australia, has achieved a data speed of 44.2Tb/s from a single light source.

27 May 2020

Broadband Forum has made significant progress on bringing an improved broadband user experience closer, with two new specifications nearing completion.

26 May 2020

Openreach engineer Scott McPartlin pitched in to help remote, vulnerable residents on the island of Coll, stay connected during lockdown.

19 May 2020

Microsoft has signed a definitive agreement to acquire virtualized network software provider, Metaswitch Networks.