Ovum reveals Global OC Market Sales up 5% in 1Q12

London, 28 June 2012 – The global optical components (OC) market posted revenues of $1.6bn for a sequential gain of 5 per cent in the first quarter of 2012, according to Ovum.

In a new market share alert*, the independent telecoms analyst firm found that the upturn in 1Q12 was largely due to the resumption of manufacturing capacity to near what it was before the Thai floods. However, OC sales in 1Q12 were still below year-earlier levels.

Daryl Inniss, Practice Leader of Components at Ovum and author of the market alert, said, “The return of manufacturing capacity is the main contributor to the OC market’s 1Q12 increase. Among the top 10 suppliers, Opnext’s 28 per cent gain led the market. North America was a bright spot, with vendors citing strong spending from Verizon and the multi-service operators (MSOs).”

The Asia market had varied performances, with Japan growing strongly while China was mixed. Sales of 40G in China met expectations, and while demand for access components was slow, this segment is usually sluggish in the first calendar quarter. “This uncertainty in China is associated with the lack of visibility and actions that the government might take in order to stimulate growth in the market,” Inniss said.

According to the study, 1Q12 has been the first growth quarter since 1Q11, but macroeconomic uncertainty still plagues vendors, with many citing limited order visibility. Suppliers have responded to these challenges with an increase in consolidation, including transactions between Oclaro and Opnext, Sumitomo and Emcore’s VCSEL business, and Accelink and WTD.

Inniss added, “The long-term outlook for optics will continue to be positive as bandwidth demand continues to grow. The announced mergers of various suppliers will improve their capability to deliver highly integrated solutions that are needed for telecom core and enterprise networks and to compete with market leader Finisar.

‘”Ovum sees the market expanding by about another 4 per cent sequentially in 2Q12 and forecasts full-year revenues of $6.9bn for 2012, for 6 per cent annual growth,” Inniss concluded.

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