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Study: Optical DWDM market to fall 11% in '01

Sun, 06/03/2001 - 8:00pm
Anne Kerven

Maybe you sensed it, but now it's official: The global market for optical components used in terrestrial DWDM and optical networking will fall 11 percent this year thanks to excess inventory and less network building.

On the upside, growth will return in 2002, but at a more conservative rate, says a study from RHK Inc.

Citing last year's "highly aggressive purchasing" by system vendors, RHK Director of Optical Components John Lively says the need for a "security of supply and OEM difficulties in forecasting component demand meant over-purchasing was inevitable. Once the excess gets through the system, "We can expect a more rational purchasng environment with solid, double-digit growth rates into 2003 and 2004," he says.

On that note, RHK expects the DWDM optical component market to grow from 2000's $5 billion to about $14 billion in 2004. The growth will be driven by new system deployment, the growth in optical functions over electrical, and new, next-generation products.

Likewise, a tendency by carriers to move from deploying new networks to adding capacity on existing ones means different product groups will grow at different rates. Terminal components, such as lasers and receivers, for example, will grow from $2.7 billion in 2001 to $6.6 billion by 2004 as carriers light additional wavelengths, RHK reports.

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