Friday, March 31, 2017

LightCounting Forecasts Optics Sales to top 4 ICPs

LightCounting, in its latest High-Speed Ethernet Optics report, finds that demand for Ethernet optics from leading Internet content providers (ICPs) continues to rise, with sales to the Top 4 ICPs - Amazon, Facebook, Google and Microsoft - forecast to increase from $0.5 billion in 2016 to $1 billion in 2017 and nearly $2 billion by 2022, representing around 30% of the global market for Ethernet transceivers.

LightCounting notes that supply shortages for 100 Gigabit Ethernet optics limited market growth in 2016, as vendors worked to ramp production. The research firm projects that, based on estimated manufacturing capacity for the leading suppliers of optics in 2017, demand will continue to exceed supply until 2018. Meanwhile, it expects volume shipments of 200 and 400 Gigabit Ethernet transceivers for applications in ICP mega-data centres will commence in 2019 and 2021, respectively.

Broken down by technology, LightCounting forecasts that the 40 Gigabit Ethernet segment will continue to decline having peaked in 2016, while sales of 100 Gigabit Ethernet solutions will continue to grow rapidly and peak at around $1 billion by 2019. For the 200/400 Gigabit Ethernet segment, it projects that sales will ramp from 2018 to reach around $200 million in 2019 and approach $1.2 billion by 2022.

LightCounting's forecast is based on a correlation between the growth rate of traffic inside mega-data centres and the bandwidth of optical transceivers sold into the market segment, while Amazon and Facebook recently stated that traffic in their facilities is increasing at a rate of around 100% per year.

Meanwhile, data on transceiver sales indicates that the top 4 ICPs increased bandwidth of optical connectivity by 70% in 2016, which is consistent with reported shortages in supplies of 100 Gigabit Ethernet optics. For 2017, LightCounting expects that bandwidth will increase by 90% as supply chain shortages moderate.

For the period 2018 to 22, LightCounting's projections assume that traffic growth in mega-data centres will decline gradually, while ICPs will find ways to use optical connectivity more efficiently. Even so, the research firm predicts that the global market for Ethernet optics will increase by 18% annually and exceed $6 billion by 2022.

http://www.lightcounting.com/News_033017.cfm

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