Jan. 25, 2013—A report released by Wintergreen Research (Lexington, Mass., U.S.A.) this week estimates that the optical component market will grow from $3.6 billion in 2012 to $12.3 billion by 2019. The 567-page report, Optical Components: Market Shares, Strategy, and Forecasts, Worldwide, 2013 to 2019, covers optical communication network elements and infrastructure, which is expected to surge along with the growth of smart phone use and Internet data transmission.

The long-term drivers of the market for network infrastructure equipment and communications semiconductors include increasing bit data, streaming video, and the shift in programming to broadcast-quality short videos, news and training videos.

While low-bandwidth video does not directly drive growth in optical components, it indirectly creates demand for broadband data transport. The explosive growth of transmitted date and video capability requires efficient high-speed transmission, and because the transmission spectrum is limited, optical components help enable transmission of more high-quality data over a smaller part of the spectrum. 

The study’s lead author, Susan Eustis, says, “With 6 million cell phones in use and one million smart phones, soon to be 6 million smart phones, a lot of people have access to mobile communication. Video, cloud-based services, the internet, and machine-to-machine (M2M) provide mobile connectivity. All these devices are networked and drive significant traffic to the broadband network, stimulating the need for optical transceivers.”

Optical elements in the Optical Transport Network (OTN) include optical fiber, optical fiber links, switches, transceivers, amplifiers and regenerators. These optical elements enable transport, multiplexing, switching, management and supervision of communication channels, particularly critical to data center infrastructure. Carrier Ethernet for 10G datarates is an optical network technology growing in Core, Enterprise, and Carrier Backbone applications, for which components include transceivers, transmitters, receivers, and transponders.

Next-gen 10 G optical transceivers, which convert electrical data signals into optical signals and back, are emerging that are compliant with the Small Form Factor Pluggable (XFP) Multi-Source Agreement (MSA) specifications; their implementation in SONET/SDH/DWDM/Gigabit Ethernet applications is growing.
The report forecasts a tremendous increase in wireless cell-tower base station investment as network traffic grows exponentially. In addition, the smartphone market will require a build-out in backhaul networks and cell-tower technology, lending to use of more optical components. As demand for increased speed and traffic on optical networks grows, so does the need for high-speed processors and components that support them.

The report, available at ResearchandMarkets.com, reviews market trends and plans of major carriers and telecom technology companies, including Qwest, Alcatel, Juniper and Cisco Systems. The study reviews how market consolidation and recent mergers and acquisitions will affect the market. The report also describes market shares, forecasts, segments, and regional revenue of the optical component market’s major players.