Global Optical Communication Market Dynamics – December 2022

Optical Fiber Communication 1
(Last Updated On: April 25, 2023)

Chapter 1: Global Fixed Broadband Market

1.1 Q222 Global Broadband Growth Trend Analysis

1.2 Q222 Net Increase Share of Regional Fixed Broadband Users

1.3 Q222 Growth of Optical Broadband Users in all Continents

1.4 Q222 Fixed Broadband Technology Development

1.5 Q222 Top 10 Countries with Net Growth of Global Broadband Users

Q222 Global Broadband Growth Trend Analysis

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  • PointTopic data shows that by the end of the second quarter of 2022, the number of global fixed broadband connections increased by 1.34% to 1.32 billion.
  • The growth degree of different markets varies, in the second quarter of 2022, 13 countries reported a decline in fixed-width users. The decline mainly occurred in the saturated broadband market, where a mobile connection is the preferred way to access the Internet.
  • Due to the global economic slowdown, the growth of global fixed broadband users in this quarter was the lowest level in the past six quarters.

Q222 Net Increase Share of Regional Fixed Broadband Users

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  • East Asia’s largest regional broadband market maintained the largest share of the net increase in fixed broadband users, rising from 68.2% in Q122 to 71.1% in Q222. This is mainly due to China‘s market size and the increase of nearly 12 million fixed broadband users in Q222. Thanks to the high quarterly growth rate of major markets such as India, Thailand, and Vietnam, Asia Other’s net growth share increased from 11.3% to 15.5%.
  • Due to the significant quarterly decline of fixed broadband users in Ukraine, we recorded another negative net growth in Eastern Europe. In the second quarter of 2022, the net increase in North America’s market share fell to 1.8%, compared with 4.4% in the first quarter of 2022, mainly due to the significant slowdown in the growth of the United States.

Q222 Growth of Optical Broadband Users in All Continents

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  • In the second quarter of 2022, in addition to other regions in Asia, the quarterly growth of the number of fixed broadband users was lower than that in the first quarter of 2022, while the other regions in Asia increased by 0.03%. The most obvious slowdown (-0.82%) is in the rest of the United States.
  • The penetration rate of fixed broadband in Africa is still the lowest, only 4%. However, it recorded the highest quarterly growth rate of 2.7%. Developing markets in East Asia and other parts of Asia are the second fastest growing regions, with the second lowest population penetration rate of 5%.
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  • From Q122 to Q222, the share of FTTH connections in the total number of fixed broadband subscriptions continued to grow, increasing by 0.8% to 59%. The market share of cable and copper-based broadband connection (ADSL) has shrunk. In the second quarter of 2021, they accounted for 16.8% and 9.6%, respectively. The number of VDSL users has increased in 17 countries (including major VDSL markets such as Greece, the Czech Republic, Germany, and Italy). In contrast, in the other 17 markets, the number of users has declined as consumers turn to optical fiber.
  • Globally, the number of Coppers decreased by 9.4% in the 12 months from Q221 to Q222, while the number of FTTH connections increased by 13.1%. Satellite broadband connections recorded a 5% increase, reflecting that this technology enables users to access broadband where wired networks are difficult to deploy or maintain. A recent example is the provision of Starlink satellite terminals to Ukrainian institutions and military forces, where the ongoing conflict is damaging the fixed broadband infrastructure. Wireless connectivity fell 0.7% this quarter, mainly due to the loss of FWA users in the Philippines, and consumers chose other platforms such as optical fiber and 5G.

Q222 Top 10 Countries with Net Growth of Global Broadband Users

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Chapter 2: Investment and Network Construction of Operators

2.1. Three Major Operators in November

2.2. Operation Status Centralized Purchase by Operators

2.3. Dynamics of Domestic and Foreign Operators

Operations of the Three Major Operators in November

  • The number of mobile subscribers of China Mobile increased by 1.427 million in November. The number of 5G package customers increased by 23.883 million. In terms of broadband, the number of users increased by 2.261 million, and the cumulative number of broadband users reached 270 million.
  • China Telecom’s net mobile subscribers increased by 600,000 in November, reaching 391 million. The number of broadband users increased by 820,000, reaching 181 million. This month, China Telecom’s 5G users added a net of 6.02 million, with a cumulative total of 6.02 million. 263 million households.
  • China Unicom added 4.451 million 5G users in November, reaching 209 million. The cumulative number of “big connection” users reached 854 million. The number of 5G industry virtual private network service customers reached 3,416. Internet of things The number of terminal connections also reached 376 million.
  • In terms of 5G users, the three major operators added 34.354 million new 5G package users in November, an increase of 9.582 million compared with the previous month. The cumulative number of 5G package users totaled approximately 1.067 billion.
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Domestic and Foreign Operators’Investment and Network Construction Trends

  • US Cellular Expands 5G Coverage

  • US Celluar, the fourth-largest mobile network operator in the United States, is expanding its 5G network in several states. With this expansion, 1.4 million people now have access to the company’s 5G network. Using a feature in 4G and 5G technology known as X2 coordination, UScellular can extend existing 5G service to adjacent sites, making 5G available to more customers. In addition to expanding the availability and coverage of 5G services, US Cellular has expanded its automated capabilities through greater autonomy, improved real-time network updates, and what is known as “Automatic Neighbor Relations” (ANR) features to speed up the deployment of these services. This automation complements the work of US Cellular engineers, allowing them to focus on other high-value work that contributes to network quality and reliability. The expansion is part of UScellular’s long-term network modernization plan. This represents a 5% increase in the company’s 5G coverage, extending these higher data speeds to more than 50% of its network coverage. It’s an element of the company’s use of artificial intelligence technology to help ensure its network operates at peak performance.
  • Lumen invests to Expand US Intercity Network by 6 Million Fiber Miles

  • Lumen Technologies is investing in an additional 6 million miles of fiber, which is expected to be installed by 2026. Lumen has been working to meet enterprise demand for more network capacity, most recently creating the world’s largest ultra-low loss fiber optic network. Once complete, Lumen’s U.S. intercity investment will reach nearly 12 million fiber miles, providing diverse routes to more than 50 major cities across the country. Lumen continues to upgrade its infrastructure with multi-conduit systems to rapidly deploy the latest fiber optic technology to differentiate this network. Lumen will continue to use Corning’s SMF-28 ULL fiber and SMF-28 Ultra fiber to upgrade its intercity infrastructure and increase its network capacity. This is the latest in optical technology. Lumen has upgraded more than 24,000 miles of routes on its U.S. intercity network. This improves network performance levels and supports the deployment of its next-generation optical platform. New fiber technology can now support customer wavelength services up to 400G and increase customer speeds in the future. This helps meet the high bandwidth needs of businesses and allows their data to be captured and analyzed in real time.
  • Visionary Invests $100 million to Build Fiber Optic Network West of Rocky Mountain

  • US regional internet provider Visionary Broadband has committed $100 million to build fiber optic internet in 20 communities in Wyoming, Colorado, and Montana. The company will provide 1Gbps/1Gbps (or Gigabit) service, and all devices support 10Gbps/10Gbps to every home and business in its service area. Visionary is installing XGS-PON and High Capacity Ring-based Active Ethernet equipment. Construction is underway in Casper, Wyoming, Cheyenne, Gillette, and Lusk and will be available to residential customers in early 2023. Fiber is widely known to customers in Dayton, LaGrange, Lanchester, Torrington, Yoder, Wyoming, Gunnison, and the Kremlin, Colorado.
  • China Telecom and China Unicom have Opened a Total of 990,000 5G Shared Base Stations

  • China Telecom stated that in the process of network construction, China Telecom has strengthened co-construction and sharing and extensive cooperation, built the world’s first, largest, and fastest 5G SA co-construction and sharing network, and promoted the construction of new information infrastructure along the green Accelerate development in the direction of low carbon and high efficiency. Since China Telecom and China Unicom jointly built a shared 5G network in 2019, the two parties have opened a total of 990,000 5G shared base stations, achieving basic continuous coverage of key towns. On this basis, we continued to deepen co-construction and sharing and opened 1.55 million 4G shared base stations. Co-construction and sharing have produced huge economic and social benefits. The two parties have saved a total of 240 billion yuan in investment, saving more than 20 billion yuan in operating costs each year, saving more than 10 billion kWh of electricity, and reducing carbon emissions by 6 million tons. The above results of co-construction and sharing, Contributed to Chinese operator solutions to the global communications industry.
  • China Telecom Completed the World’s First 5G Private Network RedCap Test in Zhenjiang Port

  • China Telecom completed the world’s first 5G private network RedCap test in Zhenjiang Port. RedCap (Reduced Capability), translated as reduced capability, is a key 5G new technology specially established for research in the 3GPP R17 phase. By simplifying the number of terminal antennas and reducing the transmit and receive bandwidth, RedCap significantly reduces cost and size. It achieves the best balance between performance and cost. Compared with 4G, RedCap IoT has stronger performance and supports 5G native capabilities such as network slicing, low latency, high reliability, and large capacity. This test is based on the 5G port customized private network solution released by China Telecom Group Co., Ltd. It uses the 3.5GHz commercial spectrum to verify the basic functions, service rate, delay, user coexistence, mobility management, and video frequency of RedCap in smart port scenarios. Key content such as business collection. The test results show that RedCap can meet the needs of business applications such as unmanned unloading of hoppers, remote stacking and reclaiming, intelligent tallying, and stack identification, which will strongly promote the application of RedCap technology in 5G smart port scenarios.
  • Shenzhen Unicom and ZTE are the First to Complete the Field Test of 5G mMTC Function and Performance

  • Shenzhen Unicom, together with Shenzhen Institute of Information and Communication Technology and ZTE Corporation, completed the large-scale machine-type communication (mMTC, Massive Machine Type Communication) function and Field verification of performance. This 5G mMTC test includes RedCap UE primary capability verification, cell resident access, uplink and downlink peak rate, single-user small/large packet delay test, and other test content. Shenzhen Unicom, Shenzhen Institute of Information and Communication Technology, and ZTE worked together during the test. The final test results fully complied with the 3GPP standard protocol process and performance expectations. As one of the three most essential scenarios for 5G applications, mMTC is designed for the Internet of Things. It is mainly oriented to smart cities, environmental monitoring, smart homes, forest fire prevention, and other application scenarios that target sensing and data acquisition. It has the characteristics of small data packets, low power consumption, and massive connections. As a key technology and solution for medium and high-speed IoT scenarios, 5G RedCap can greatly reduce the requirements on radio frequency and baseband so that terminals can reduce power consumption and obtain higher battery life perfectly matching the capability requirements of mMTC scenarios while inheriting With the advantages of 5G network slicing and low latency, it has intergenerational advantages compared with 4G Internet of Things technology. Stronger performance and more functions greatly reduce costs, which is conducive to the vertical integration of modules and terminal devices—wide application in the industry.
  • Equinix Enters Malaysia with US$40m Data Center Investment

  • Equinix has announced its entry into the Malaysian market with plans to build a new International Business Exchange TM data center – JH1 – in Johor. A world-class digital infrastructure will accelerate the transformation of the digital economy in Malaysia and the broader ASEAN region. The initial investment of JH1 is about 40 million US dollars, and it is planned to start operation in the first quarter of 2024, providing 500 cabinets and 1960 square meters of colocation space. The world-class IBX data center will support Malaysian and multinational companies doing business in Malaysia to access the Equinix platform, bringing together and connecting the underlying digital infrastructure to power their success. Equinix’s expansion in Malaysia is in line with the MyDIGITAL initiative launched by the Malaysian government, which aims to provide the country with a blueprint to accelerate the growth of digital products and services. Johor State Chief Minister Datuk Onn Hafiz Ghazi said: “While the digital economy is a catalyst for the Malaysian economy, data centers are integral in supporting the digital ecosystem and its continued growth. We welcome Equinix’s investment.”
  • Delaware County, Indiana, plans to Deploy AT&T Fiber to Nearly 1,250 Locations

  • Delaware County, Indiana, announced plans for a $2.3 million project with AT&T that will build a state-of-the-art network and deliver AT&T FiberSM to approximately 1,250 customer locations in parts of the county. The project is contingent on a final contract between the county and AT&T. The plan calls for residents and businesses to have fast download and upload speeds of up to 5Gb. Faster speeds and increased bandwidth mean customers can connect multiple devices, stream multiple entertainment sources, quickly upload content to social media, and experience the ultra-low latency of pro-level gaming, all at the same time. Extensive planning and engineering work on the project will begin once the contract is finalized. Construction of the network is expected to be completed within 18 months of contract execution. AT&T has extensive experience deploying fiber optics in Indiana. Hundreds of thousands of places in the state now have access to AT&T Fiber.
  • Zayo Announces 22 New Long-haul Dark Fiber, 400G, and Trans-Pacific Subsea Lines

  • Zayo Group Holdings Limited, the world’s leading communications infrastructure platform, has announced a series of expansions to its stand-alone fiber optic network infrastructure to continue increasing its long-haul capacity. The development includes three new long-distance dark fiber lines, 18 new 400Gbps lines, and a newly completed trans-Pacific subsea line connecting the US and Tokyo. In addition to the new dark fiber lines, Zayo has increased fiber capacity on the following lines: Las Vegas to Phoenix. The upgraded lines will have 400G capability by 2023. The string of expansions by Zayo represents the latest in a $250 million investment the company has made in its global infrastructure this year. Recently, the company expanded its infrastructure and Tier 1 IP network to the major border cities of McAllen and Laredo, Texas, with two new 100G IP points of presence (PoPs) and 400G wavelength capabilities. In May, Zayo announced its largest organic network expansion to date. As it celebrates its 15th anniversary, Zayo’s footprint spans 16 million fiber miles and 137,000 route miles.

Chapter 3: Dynamics of System Equipment Vendors

3.1, Ciena’s FY22Q4 Revenue of US$971 Million was Higher than Expected

3.2, Ekinops Provides Network Backbone for Next-generation Connectivity in Africa

3.3, NBN selects Ericsson for Fixed Wireless Access Network Upgrade

3.4, Orange and Huawei achieved the Transmission Record of 157 Tbit/s over 120 Kilometers of Optical Fiber

Ciena’s FY22Q4 Revenue of US$971 Million was Higher than Expected

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  • In the fourth quarter of the fiscal year 2022, Ciena’s revenue was US$971 million, compared with US$1.042 billion in the same period last year, a year-on-year decrease of 6.8%. The gross profit margin in the fourth quarter of the fiscal year 2022 was 44.7%, compared with 45.8% in the same period last year, a year-on-year decrease of 1.1%. In the fourth quarter of the fiscal year 2022, net income was $57.6 million, and earnings per share were $0.39, compared with net income of $104 million, and earnings per share were $0.66 in the same period last year.
  • Gary Smith, President, and CEO of Ciena, said: “Our strong fiscal fourth quarter financial results were better than expected as we benefited from some favorable supply chain developments in the second half of the quarter. Looking ahead, given our large backlog and supply Continuing signs of gradual improvement, we expect hyper-velocity revenue growth in fiscal 2023. And, we remain confident that the persistence of our long-term demand drivers and our strategic investments to expand our addressable markets will position us for strong performance in the coming year’s revenue growth.”
  • In terms of regional markets, the sales revenue from the Americas market in the quarter was US$724 million, a year-on-year decrease of 3.37%; the sales revenue from Europe, Middle East, and Africa (EMEA) market was US$135 million, a year-on-year reduction of 20.9%; from the Asia-Pacific market, The sales revenue of the company was US$112 million, a year-on-year decrease of 7.87%.
  • Looking ahead, Ciena expects its first-quarter fiscal 2023 revenue to be between $910 million and $990 million. The fiscal first quarter’s gross margin is likely below 40%. Full-year fiscal 2023 revenue growth will be 16%-18%. Adjusted gross margin for fiscal 2023 is 42% to 44%.

Dynamics of System Equipment Vendors

  • Ekinops Provides Network Backbone for Next-generation Connectivity in Africa

  • Ekinops, a leading optical transport and network access specialist, has announced that it has been selected by telecom infrastructure provider Bandwidth and Cloud Services Group (BCS) to undertake a network backbone upgrade that will enhance connectivity across Africa. BCS is a pan-African wholesale telecommunications infrastructure provider providing fiber optic connectivity solutions in East, Central, and Southern Africa. It is the region’s key partner for backhaul data and cloud services to mobile operators and service providers. Across the network, BCS estimates that its projects support approximately one-third of the Internet capacity (in terms of data volume) in the Democratic Republic of the Congo (DRC), Rwanda, South Sudan, and Uganda. Customers in these regions account for two-thirds of all data users, who rely on BCS’ network for about half of their capacity needs. As part of an expansion project that has grown over the years, BCS aims to improve connectivity and reduce regional latency. After a competitive bidding process, BCS selected Ekinops’ DWDM transmission solution for the planned backbone expansion, leveraging Ekinops’ experience in supporting previous network upgrades. The project involves realizing a long-distance, regional optical transmission network with 1Tbps (terabit) per second capacity throughout Africa and providing 10G traffic from points of presence (PoPs) and transmission towers to network hubs by deploying 44 metro-upgraded urban connections.
  • Indonet Partners with Juniper to Automate and Modernize Network Deployments

  • Juniper Networks announced that Indonesian digital infrastructure provider PT indointernetttbk (Indonet) had selected Juniper Apstra to help it automate, modernize and facilitate the expansion of its experience-first network infrastructure. Apstra has saved Indonesia about 20% in costs by managing automated network provisioning and monitoring. As the largest archipelago in the world, Indonesia has established itself as a preferred data center location in Southeast Asia due to its strategic location across important shipping lanes, high levels of internet penetration, and a vibrant digital-first economy. To capitalize on this, the government has launched a series of initiatives to accelerate economic growth, driven by the urgent need for digital transformation in the manufacturing, finance, and healthcare sectors. The demand for reliable and scalable hosting services has surged with the digital transformation. Spending in Jakarta alone is expected to reach US$938 million in 2027, with a projected five-year CAGR of 22.7%. As Indonesia’s first Internet Service Provider, Indonet has already built a reputation for delivering scalable and reliable digital infrastructure solutions and is poised to gain more with continued growth. Perry Sui, Senior Director, ASEAN, and Taiwan, Juniper Networks, said: “Juniper Networks is delighted to partner with and grow Indonesian Networks. They are building a simplified, reliable, and efficient infrastructure across Indonesia. Apstra has greatly facilitated its data center network automation and expansion.
  • We look forward to continuing to work together as they transform into a modern digital infrastructure provider, furthering Indonesia’s growth momentum.”
  • NBN selects Ericsson for Fixed Wireless Access Network Upgrade

  • Australia’s National Broadband Network Co (NBN Co) will increase its fixed wireless access (FWA) footprint by 50% by the end of 2024, deploying 4G and next-generation 5G connectivity under a ten-year exclusive partnership agreement with Ericsson. NBN Co is an Australian government company responsible for designing, building, and operating Australia’s digital backbone network as a wholesale broadband access network provider. Australia has one of the largest countries in the world with vastly different population densities, and this deployment is a major move to address the geographic challenge of better serving communities and businesses across Australia. FWA currently covers more than 650,000 establishments across Australia. Under the new partnership, Ericsson will deliver the next-generation technology critical to 5G, enabling 5G to many existing base stations on the NBN’s fixed wireless network. The new capacity and coverage of the upgraded network will provide fixed wireless access to 120,000 homes and businesses within NBN satellite coverage for the first time. Ericsson’s range-extending innovation will allow NBN Co to extend the cellular range of its fixed wireless network from 14km to 29km. By leveraging the latest 4G and 5G solutions, including 5G in the NBN mmWave spectrum bands, the upgrade program aims to support higher speeds for fixed wireless networks and provide a better customer experience. Importantly, the new infrastructure will also support future upgrades of NBN’s existing spectrum from 4G to 5G.
  • NHTC Deploys Adtran End-to-End Fiber Broadband Solution to Extend Gigabit Services

  • Adtran announced that New Hope Telephone Cooperative Corporation (NHTC) is leveraging Adtran’s end-to-end fiber optic broadband solution to expand its network significantly. Adtran is helping NHTC launch a competitive gigabit fiber broadband service, spending less time operating the network and more time building the brand in a fast-growing market. NHTC is based in New Hope, Alabama, where the population is growing, and new broadband carriers are frequently entering the market. Because of this growth, NHTC needs to significantly expand its fiber broadband solutions to compete with the large Tier 1 operators. Adtran helped NHTC acquire the equipment it needed within a very tight time frame and immediately provide gigabit service to any customer, anywhere. Adtran end-to-end solution includes Adtran Mosaic One cloud software and Adtran Connected Home solution, connected with Combo PON technology through Adtran 10G optical fiber access platform. The flexible Combo PON technology enables NHTC to maintain support for traditional GPON customers while providing multi-gigabit XGS-PON services to existing and new users. The Mosaic One intelligent SaaS platform gives marketers insights to assess customer behavior and professionally guide their digital campaigns. It also provides customer support teams and network engineers the ability to resolve customer issues quickly, preempt impending network issues, and maximize customer satisfaction. Additionally, Adtran Service Delivery Gateways (SDGs) combined with AI-powered adaptive Wi-Fi powered by Plume enables NHTC to deliver a multi-user, multi-gigabit experience in the smart home.

System Equipment Vendor Dynamics

* Ericsson Expands Production in India to Accommodate 5G Network Deployment

Ericsson announced that it would expand its capacity and operations in Pune with partner Jabil to meet the demand for 5G network deployment in India. Ericsson was the first telecom equipment supplier to establish a facility in India in 1994. Together, Jabil will produce equipment, including 4G and 5G radios, RAN computing, and microwave products. With the launch of 5G in India, we are increasing production of 5G telecom equipment in Pune in a phased manner to support network deployments by Indian telecom service providers,” said Nunzio Mirtillo, head of Ericsson’s Southeast Asia, Oceania, and India market area. The production in India is part of our global production footprint across all continents. This footprint allows us to ensure a global, flexible and resilient supply chain to respond quickly to market and customer needs, and India benefits from this.” The increase in production will expand the business through high-tech production and create approximately 2,000 jobs in Pune, India. Ericsson India is also establishing a technology center to increase flexibility and speed of product entry into the market. The project will focus on new product introduction and production engineering to ensure high-quality standards, testing/integration, early product supply readiness, and operational support to ensure efficient development and deployment of 5G in India.

* Orange and Huawei Achieve 157 Tbit/s Transmission Record on 120 km of Fiber

Huawei and Orange have successfully achieved a new world record of 157 Tbit/s transmission over 120 km of fiber in a prototype test on the Orange network in southwest France. This technological achievement demonstrates that Orange’s current infrastructure is well prepared for the technology that will be used to transport the ever-growing traffic of the next decade. In June 2022, Huawei unveiled the industry’s first ultra-broadband Super C + Super L solution, capable of delivering 12 THz spectrum using C-band (C is a conventional wavelength) and L-band (L is a longwave) fiber. The Super C + Super L solution can provide a 12 THz spectrum using C-band (C is conventional wavelength) and L-band (L is longwave) fiber. In this test, the total bandwidth was extended to 18 THz by using internal S-band (S stands for shortwave) technology and relying on the transmission expertise of Huawei’s R&D center in France. Based on Huawei’s advanced high-order constellation shaping modulation algorithm, 240 wavelengths were used to provide a total transmission capacity of 157 Tbit/s. While traffic demand is growing dramatically every year, spectral efficiency (e.g., the amount of information transmitted for a given spectrum) appears to improve only half as fast over the same period. This will lead to the saturation of the existing backbone network. This technology provides a solution to leverage already deployed fiber systems and ensure capacity upgrades without investing in new fiber deployments. Testing has shown that innovation and research are and will continue to be a top priority for both companies to address future traffic needs and provide affordable connectivity to customers. Richard Jin, president of Huawei’s optical business line, said: “Huawei has long been committed to strategic investment, research, and technology breakthroughs in optical communications, as evidenced by our exceptional optical research teams, such as the one in Paris. We are excited to work with an innovative operator like Orange to contribute to creating the network of the future.”

Chapter 4: Optical Device Vendor Dynamics

4.1   Performance of Optical Device Vendors

4.2   Coherent High-Intensity Partners with ETRI and KAIST Focusing on Advanced Semiconductor Devices for the Korean Market

Emcore Reports Fourth Quarter Fiscal 2022 Financial Results

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* Emcore sales revenue for the fourth quarter of fiscal 2022 was $25.6 million, with $21.0 million from the Aerospace and Defense (A&D) segment and $4.6 million from the Broadband segment. net GAAP loss of $16.9 million, a non-GAAP net loss of $10.9 million, and a negative adjusted EBITDA of $9.4 million.

* The fourth quarter marked the beginning of a new era for Emcore,” said Jeff Rittichier, Emcore’s President and Chief Executive Officer. With the completion of the acquisition of KVH Industries’ Inertial Navigation product line, the acquisition of Space & Navigation in the previous quarter, and the combination of our existing QMEMS and FOG products, Emcore has created the world’s largest independent inertial navigation solutions provider in the world. A&D accounted for more than 80% of total revenue in the fourth quarter. While its gross margin was negatively impacted by integration-related and other items in the quarter, we have been working hard to execute our restructuring plan to become a cohesive and profitable inertial navigation business. ”

* For the broadband business, sales revenue from the broadband business more than halved to $4.6 million in the fourth quarter compared to $10.3 million in the prior year quarter, Emcore said, adding that the sequential decline in the broadband business was primarily due to lower CATV revenue. Looking ahead to the first quarter of fiscal 2023, which ends December 31, 2022, Emcore currently expects sales revenue to be in the range of $25-27 million.

Optical Device Vendor News

* Coherent Collaborates with ETRI and KAIST Focusing on Advanced Semiconductor Devices for the Korean Market

Coherent, a global leader in materials, networking, and lasers, announced that it had signed a Memorandum of Understanding (MoU) with two Korean institutions – Electronics and Telecommunications Research Institute (ETRI) and Korea Advanced Institute of Science & Technology (KAIST), have signed a Memorandum of Understanding (MoU) to promote collaboration in advanced electronics and photonic devices, with a focus on the Korean market.

The MoU was signed in conjunction with the Korea-U.S. Industrial Cooperation Forum. The forum provides a platform for mutual cooperation between the

two countries with the support of the U.S. Department of Commerce, MOTIE (Korea’s Ministry of Trade, Industry, and Energy), and KIAT (Korea Institute of Advanced Technology). Korea is at the forefront of new technologies that are transforming industries such as communications, automotive, and consumer electronics, and Coherent’s technology platform is ideally suited to enable a wide range of existing and emerging applications in these fast-growing markets,” said Dr. Julie Sheridan Eng, Chief Technology Officer of Coherent.

Korea remains a strategic market for Coherent, and we are looking forward to expanding our relationship with respected partners such as ETRI and KAIST. We will begin by reviewing our respective technology roadmaps and identifying areas where we can improve and accelerate Korea’s technology development.” The partnership will cover many device innovations, leveraging silicon carbide, gallium arsenide, and indium phosphide technology platforms. The partnership will address power electronics applications in electric vehicles, industrial applications, optics, and wireless networks.

* Liante Technology: Proposed to use Over-raising Funds of 57.84 Million Yuan to Invest in Innovation Center Project

Wuhan Liante Technology Co., Ltd. announced that according to the company’s development strategic plan, to improve the company’s production layout, improve production efficiency, enhance the company’s overall industrial supporting capacity, and at the same time, improve the efficiency of the use of funds raised, the company’s board of directors, after careful study, intends to build an innovation center project.

The Company held the 18th meeting of the 1st Board of Directors and the 13th meeting of the 1st Supervisory Board on December 19, 2022, and considered and approved the proposal of using over-issued funds to invest in the Innovation Center Project and agreed to use over-issued funds of 57.84 million Yuan to invest in the Innovation Center Project. The investment amount of 57.84 million Yuan was higher than the net amount of 57.64 million Yuan, mainly due to the interest generated from the over-issued fund account, the stamp duty, and some handling fees that were not planned to be replaced.

Chapter 5: Chip Vendor Dynamics

5.1 Chip Vendor Dynamics

5.2 Fiber Optic Cable Vendor Dynamics

Marvell’s Third Quarter Sales Revenue of $1.537 Billion Increased 27% Year-Over-Year

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* Marvell’s third quarter fiscal 2023 sales of $1.537 billion were at the lower end of the company’s previously expected range, up 27 percent year-over-year. GAAP gross margin was 50.6 percent, and the non-GAAP gross margin was 64.0 percent. third quarter fiscal 2023 GAAP net income was $13 million.

* In the third quarter of fiscal 2023, we achieved record sales revenue of $1.54 billion, an all-time high for Marvell, and 27 percent year-over-year growth, driven by key growth drivers such as cloud, 5G, and automotive, as well as our presence in the enterprise networking end market share and content gains.,” said Matt Murphy, Marvell’s president and chief executive officer. Inventory reductions, particularly from our Storage customers, impact our near-term results and performance guidance. We work closely with them to manage their changing needs orderly, clearing the way for a return to growth. Our Design Win momentum remains strong, our new cloud-optimized offerings are beginning to grow, and we are well-positioned to address the current environment successfully. We remain confident in our long-term growth momentum.”

* Looking ahead to the fourth quarter of fiscal 2023, Marvell currently expects sales revenue of approximately $140 million, up or down 5 percent, GAAP gross margin of 49.2 percent, up or down 1 percent, and non-GAAP gross margin of approximately 64.0 percent, GAAP diluted earnings per share of approximately $0.00, up or down $0.05, and non-GAAP diluted earnings per share of approximately $0.46, up or down $0.05. Non-GAAP diluted earnings per share were approximately $0.46, up or down $0.05.

Semtechs Third-quarter Sales Revenue Down 15 Percent Sequentially

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* Semtech sales for the third quarter of fiscal 2023 ended October 30, 2022, were $178 million, down 15.1 percent sequentially and 8.9 percent year-over-year. 65.1 percent GAAP gross margin and 65.5 percent non-GAAP gross margin.

* Despite strong macro-related headwinds that negatively impacted our demand in the second half of the year and adjustments to the divestment of our Hi-Rel business, we expect fiscal 2023 to be another record revenue year for Semtech,” said Mohan Maheswaran, Semtech’s president and chief executive officer. We are beginning to see signs of stabilizing demand and are encouraged by several exciting new designs wins across all of our product groups and target markets. We are focused on delivering innovative and differentiated technology platforms that enable our customers to build higher-performance, more efficient, and more sustainable systems. As we prepare for fiscal 2024 and complete the proposed acquisition of Sierra Wireless, we remain excited about the potential future opportunities for the combined company and expect to deliver strong long-term earnings growth in the years ahead.

* Semtech currently expects fourth-quarter sales to be in the range of $145-$155 million, GAAP gross margin to be in the range of 63.6%-64.6%, non-GAAP gross margin to be in the range of 64.0%-65.0%, GAAP diluted earnings per share to be in the range of $0.20-$0.27 and non-GAAP diluted earnings per share to be in the range of $0.44-$0.52. Non-GAAP earnings per diluted share will be in the range of $0.44-$0.52.

Broadcom FY2022 Results 21% Increase in Sales Revenue

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* Broadcom reported fourth-quarter fiscal 2022 sales of $8.93 billion, an increase of 21 percent year-over-year. GAAP net income of $3.359 billion increased by $1.37 billion year-over-year. Non-GAAP net income was $4,544 million, an increase of $1,043 million, and GAAP diluted earnings per share were $783 million, an increase of $3.38. Non-GAAP diluted earnings per share were $10.45, an increase of $2.64 from the prior year.

* By segment, the Semiconductor Solutions segment generated sales of $7.092 billion, up 26 percent year-over-year. The Infrastructure Software segment generated sales of $1.838 billion, up 4% year-over-year.

* Broadcom’s fiscal 2022 sales grew 21 percent annually to a record $33.2 billion due to strong demand from hyper-scale service providers and enterprises,” said Hock Tan, president, and chief executive officer of Broadcom. Looking ahead to fiscal 2023, the increased investment in research and development over the past few years enables us to expand our leadership in next-generation products in the end markets in which the company operates.” * Based on current business trends and conditions, Broadcom expects sales revenue for the first quarter of fiscal 2023 ending January 29, 2023, to be approximately $8.9 billion, with adjusted EBITDA of approximately 63 percent of expected sales revenue.

Chapter 6:  Mergers and Acquisitions

6.1 Microsoft Announces Acquisition of Lumenisity, the Next Generation Hollow Core Fiber (HCF) Provider

6.2 Ziply Fiber and iFiber Communications Enter into Acquisition Agreement

6.3 Other Merger and Acquisition Developments

Microsoft Announces Acquisition of Lumenisity, the Next Generation Hollow Core Fiber (HCF) Provider

* Acquirer: Microsoft

* Acquiree: Lumenisity, the UK leader in next-generation Hollow Core Fiber (HCF) solutions. The company’s innovative and industry-leading hollow core fiber products provide fast, reliable, and secure networks for global, enterprise hyper-scale institutional customers.

* Transaction Amount: Not yet announced.

* Purpose of Acquisition: The acquisition will expand Microsoft’s ability to optimize its global cloud infrastructure further to meet the stringent latency and security requirements of its cloud platform and service customers.

* The networks and data centers on which these application scenarios depend require high-speed switching, enhanced security, increased bandwidth, and high-capacity communications. HCF solutions offer significant advantages for such needs. For the public sector, HCF can provide enhanced security and intrusion monitoring for countries around the globe. In the healthcare sector, HCF can help accelerate medical image detection and enhance providers’ ability to ingest, preserve and share medical image data in the cloud, thanks to its ability to transfer large volumes of data. With the rise of the digital economy, HCF can also help international financial institutions seek fast, secure transactions across a wider geographic area.

* As part of the Lumenisity acquisition, Microsoft plans to leverage the organization’s technology and industry-leading team of experts to accelerate its innovative development in networking and infrastructure

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Lumenisity Hollow Core Fiber (HCF) Advantages

Lumenisity’s next-generation hollow core fiber (HCF) uses a patented design of light transmission in a hollow core,
which offers advantages over solid glass core-based fiber
optic cables, such as:
– Light travels 47% faster through hollow core fiber (HCF) than standard quartz glass, increasing overall transmission speed and reducing latency
2- Lumenisity’s innovative hollow-core fiber optic internals allow for enhanced security and intrusion detection.
3- Eliminating fiber nonlinearities and the wider spectrum allows for lower costs, increased bandwidth, and better network quality.
4- The potential for ultra-low signal loss allows longer-range deployments without repeaters.

Ziply Fiber Reaches Acquisition Agreement with iFiber Communications

  • Acquirer: Ziply Fiber.
  • Acquired Party: iFIBER Communications. iFIBER is a high-speed fiber optic internet service provider working with local puds in Western, Central, and Eastern Washington.
  • Transaction Amount: not yet disclosed.
  • Purpose of Acquisition: Upon completion of the acquisition, Ziply Fiber will provide fiber optic Internet services through indefinite use rights with each partner PUD. Customers will benefit from extended service hours, access to new products such as managed voice, whole home WIFI, and improved networking management ability. Current iFIBER customers will continue to enjoy the premium Internet and voice services provided by the iFIBER team. All iFIBER employees will continue to support new and existing customers.“

From the beginning, Ziply Fiber has been committed to enhancing the connected lives of our Northwest neighbors,” said Harold Zeitz, Ziply Fiber CEO. “We continue to find new ways to bring high-speed fiber connectivity to as many communities as possible. The agreement with iFIBER accelerates our ability to bring fiber optic internet to more customers and supports our belief in effective public-private partnerships. “

Since aggressive fiber expansion efforts began in the summer of 2020, Ziply Fiber has announced new fiber construction projects in more than 90 towns and cities in the Northwest across four states. The company has committed hundreds of millions of dollars to build an advanced 100% fiber-optic network for many of the suburban and rural communities in the Northwest Territories that are underserved in terms of internet access. The company has been actively building fiber in the Northwest Territories since June 2020. It plans to build and deploy new fiber optic cables, local hubs, new offices, and new hardware to run the network as hundreds of parts of a project.

Other Acquisitions and Mergers

  • Aeris to acquire IoT Business from Ericsson

  • Ericsson and Aeris Communications, a leading provider of Internet of Things (IoT) solutions based in San Jose, California, have signed an agreement to transfer Ericsson’s IoT Accelerator and Connected Vehicle Cloud business. Ericsson IoT Accelerator is used by more than 9,000 businesses, managing more than 95 million connected devices and 22 million eSIM connections worldwide. These enterprises and connections leverage Ericsson’s growing ecosystem of more than 35 communication service provider partners for global IoT cellular connectivity. The Connected Car Cloud is the complete connected car platform today, used by the leader in Automotive IoT to connect 6 million vehicles in 180 countries. Aeris and Ericsson’s IoT platform will connect over 100 million devices in 190 countries worldwide. For customers, this provides stability, reliability, and global scale needed to support the full lifecycle of IoT projects across multiple industries, use cases, and geographies. Through this transaction, Aeris will become the market leader in IoT, generating strong market synergies and further simplifying IoT for 9,400 businesses by providing them with secure, reliable, and intelligent IoT solutions. The transaction includes transferring assets and employees of Ericsson’s IoT business to Aeris. In addition, Ericsson intends to provide transition services for Aeris and will acquire a small stake in the company. The transaction is expected to close in the first quarter of 2023.
  • Verizon Plans to Acquire West Central Wireless

  • Verizon is buying another small wireless network operator to fill some gaps in its 5G coverage in Texas. “West Central Wireless has entered into a deal with Verizon that will result in us discontinuing our mobile and fixed wireless business,” said Mike Higgins, general manager of West Central Wireless. Higgins said the company would cease service sometime next year. “West Central Wireless reaches 353,000 Texans through BroadbandNow, including San Angelo, a city of more than 100,000 residents,” said Wave7 Research analyst Jeff Moore. Over the past 20 years, Verizon and AT&T have acquired Many regional carriers.” Verizon confirmed its intent to acquire West Central Wireless in a statement to Light Reading: “Verizon has signed an agreement to acquire certain spectrum and wireless assets of West Central Wireless. The acquisition is subject to FCC approval and other conditions and is expected to close by mid-2023. The deal will expand Verizon’s service to the Midwest Texas region.” The proposed acquisition follows a pattern. In recent years, Verizon has acquired Chariton Valley Communications (CVCC) in Missouri, Triangle Mobile in Montata, Bluegrass Cellular in Kentucky, Chat Mobility in Iowa, and Blue Wireless in New York and Pennsylvania.

Chapter 7:   New Products and New Technologies

7.1 New products and technologies of chip vendors

7.2 Other New Products and Technologies

New Products and New Technologies for Chip Manufacturers

Marvell Introduces Secure 1.6T Ethernet PHY for Cloud and 5G Markets

Marvell Technology has introduced the Alaska C X9340P, a new 5nm 1.6T Ethernet PHY. The new product features 100G I/O with built-in media access control security(MACsec). It fully supports Precision Time Protocol (PTP), which is suitable for cloud data centers and communication network applications. MACsec enables data center operators to implement hardware-based link-layer security, and PTP enablesEthernet can to support ultra-reliable timing-critical services. Together with the previously announced Alaska C X93160 PHY, the X9340P provides a pin-compatible flexible platform for retiming, gearbox, encryption, and timing applications at speeds up to 800GbE. The X9340P is Marvell’s latest product based on the industry’s highest performance based on 112 Gbps PAM4 SerDes technology and uses 56Gbps PAM4Compared with the PHY of SerDes technology, the power consumption per bit is reduced by 40%. The Alaska C X9340P PHY integrates the IEEE 802.1AE 256-bit MACsec function in the PHY to provide flexible encryption deployment. This eliminates the cost and power burden of including this functionality in a switch ASIC. Marvell supports the Open Compute Project (OCP)-driven Switch Abstraction Interface (SAI) on the X9340P and X93160 devices, enabling leading cloud data center customers to control network equipment elements independently of the vendor.

Other New Products and Technologies

  • EMCORE Introduces New TAC-450 IMU Integrating PIC Technology, Tactical-Grade Gyroscope, and Inertial-Grade Accelerometer
  • The EMCORE TAC-450 Series IMUs are smaller and lighter in compact housing, expanding the types of potential autonomous applications that can use EMCORE’s new IMU technology. The PIC Inside design with low-power electronics also provides excellent product lifetime and reliability with excellent shock/vibration resistance. Each TAC-450 IMU delivers dynamic and precise sensor performance, providing superior navigation capability and environmental robustness for challenging applications. The TAC-450 IMU family, including the TAC-450-360, -340, and -320, is a high-bandwidth, low-noise, photonic gyroscope design in various performance levels, with inertial-grade accelerometer and magnetometer options available. The accelerometer used in the TAC-450 IMU offers remarkable sensitivity and accuracy across its dynamic range. The EMCORE TAC-450 IMU is designed to provide excellent drift (bias stability) and noise (velocity random walk) performance. The TAC-450 IMU also features flexible power and communication interfaces for easy integration, robust performance and survivability, and increased product lifetime due to PIC technology. The TAC-450-320 and -340 provide faster gyro response and measurements for highly dynamic applications. The new products are backward compatible with popular IMUs through outputable dual-use technology, which makes it easy to integrate the all-new TAC-450 IMUs with flexible interfaces and programmable message outputs.
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  • China Unicom Releases Millimeter-wave Indoor Distributed Micro Base Station with High Localization Rate

  • China Unicom actively leads the millimeter wave ecological industry chain and continues to promote the independent controllability of millimeter wave base station equipment. The release of China Unicom’s first millimeter-wave micro-base station with a high localization rate represents China Unicom’s successful completion of the first step of the “three-step” plan for millimeter-wave independent controllability, leading and promoting the research and development of millimeter-wave localized chip devices. China Unicom Research Institute successfully released the first millimeter-wave indoor distributed micro base station with a high localization rate in China, realizing the first milestone in the research and development of millimeter-wave independently controllable base stations! China Unicom, Purple Mountain Laboratory, and AVIC International jointly developed this indoor distributed micro base station with a high localization rate. It includes three parts: BBU, Hub, and pRRU. It has an independently controllable baseband controller, RF chip, and high-frequency integrated networking. And eight major features include independent networking, flexible frame structure, and green energy-saving solutions. It can meet the deployment requirements of high-density and large-bandwidth hotspot scenarios and enable XR/4K/8K and other large-bandwidth applications. The research and development of the whole machine have driven the localization of baseband, intermediate frequency, and radio frequency essential components. The road to localization will not be accomplished overnight. China Unicom is steadily advancing and gradually solidifying the foundation of independent and controllable millimeter waves through the “three-step” evolution plan. Li Hongwu, president of China Unicom Research Institute, said, “This release is the base station version 1.0, which meets the requirements of R16. In the future, it will meet the needs of R17/R18 and promote the realization of the whole equipment to reach the leading international level until it is entirely autonomous and controllable.

Chapter 8: Market Data and Analysis

  • 8.1 LC: Q322 The Global Wireless Infrastructure Market Continues to Show Weakness
  • 8.2 Technavio: In the Next Five Years, the Global QSFP Module Market will have a Net Increase of US$1.127 Billion
  • 8.3 IDC: Q322 Global Ethernet Switch and Router Market Continues to Grow8.4 Dell’Oro: Q322 Global Data Center Switch Sales Hit a Record, up 20% Year-on-Year
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LC: Q322 The Global Wireless Infrastructure Market Continues to Show Weakness

  • LightCounting (LC) has released its Q3 2022 Wireless Infrastructure Market Report. In the third quarter of 2022, the global wireless infrastructure market performance continued the weakness in the second quarter of 2022, indicating that the wireless infrastructure market driven by 5G is approaching its peak as the first wave of 5G deployment subsidies. Global uncertainty, lingering supply chain tensions, and foreign exchange headwinds led to a continuation of the weakness seen in the first half of 2022 and the third quarter of 2022. Meanwhile, the wireless infrastructure market continues to operate in the state of balance achieved in 2021: The two opposing spheres of influence, the China-dominated East and the U.S. and its allies-dominated West, are becoming more balanced. LC found that the West holds 50.5% of the global wireless infrastructure market, while the East accounts for the rest, with China accounting for more than 80% of the East.
  • LC Principal Analyst, Stephane Teral, said: “Overall, market dynamics continue to remain balanced as the execution of 5G contracts awarded in the second half of 2020 and the first half of 2021 continue unabated. The end of the first wave of 5G is coming, which confirms our view that the global wireless infrastructure market will peak this year.”
  • As a result, the global wireless infrastructure market is down 1% QoQ and 8% YoYin Q3 2022. 5G RAN is the only segment to achieve sequential growth. The 5G core segment performed flat quarter-on-quarter but grew 28% year-on-year
    driven by the Chinese market. Elsewhere, the open RAN segment was weak again as Rakuten Mobile completed ahead of schedule, and Dish’s 5G network buildout failed to offset delays in Germany’s 1&1 network rollout.
    ●According to LC’s model, after the peak in 2022, the global wireless infrastructure market will show a slow single-digit decline to reflect the differences in the construction process of different regions and countries, including the impact of COVID-19 and two consecutive years ( 2019 and 2020) the impact of a “two-year step function” of double-digit growth. The model, which considers all 5G three-year rollout plans collected by LC from many service providers, shows a strong 5G market in 2022 and 2023.

LC: LiDAR Market Expected to Grow but U.S. Investors Lose Interest

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  • LightCounting (LC) has updated forecasts for automotive lidar and smartphone 3D sensors. In a report published as early as November 2021, LC was skeptical about forecasts for widespread deployment of autonomous vehicles within the next five years, as the market still has significant technical, regulatory, and societal challenges to overcome. Chinese EV makers have already started deploying L2/3 lidar on many of their models and are starting to ramp up production. In November 2022, Hesai released a new short-range “blind spot” lidar and reported receiving more than 1 million customer orders. LC expects that the sales of lidar for L2/3 ADAS applications will drive the rapid growth of lidar sales in 2023-2027.
  • Autonomous Trucks (AT) will be the second largest market in 2023-2027. Amazon used semi-autonomous trucks made by Embark on public roads as early as 2012. Embark became a public company in the second half of 2021, but by the end of November 2022, its market value had fallen 35 times to just over $100 million. Embark recently announced coast-to-coast truck routes with nine transfers in cities throughout the Sunbelt, including new locations in Dallas, El Paso, Atlanta, and Jacksonville.
  • Backed by Amazon and new public companies, Aurora is accelerating self-driving technology, starting with trucks. Aurora works with industry leaders across the transportation ecosystem, including Volvo Trucks, PACCAR, Toyota, Uber, FedEx, U.S.Xpress, Schneider, Werner, Covenant, and Uber Freight. Their latest roadmap includes commercialization by the end of 2024. However, investors weren’t willing to wait that long, and Aurora’s stock is down 10-fold from its peak a year ago (November 2021).

LC: AOC and DAC Market to Stagnate in 2023, Return to Growth in 2024 CPO will Start Gaining Market Share in 2024

● LightCounting (LC) released reports on high-speed cables, AOC, EOM, and CPO. Sales of AOC (Active Optical Cable) and copper cables are growing, as shown in the chart below, both as server connections and as interconnects in decoupled switches and routers. Many low-speed (25G and below) cables are also used in industrial and consumer applications. Still, these market segments are not included in the LC report.

● Due to the economic slowdown, market growth will be interrupted in 2023 but will resume in 2024. From 2023 to 2027, the CAGR of AOC and copper cable is expected to be 14% and 25%, respectively. The rise of AEC will boost copper sales but at the expense of AOC. In addition, the adoption of CPO will also be one of the reasons for the slowdown of AOC growth until 2027.

● Most of the high-speed cables are used in HPC and AI clusters. The speed of optics in the HPC market is doubling every generation, and adoption is accelerating with each generation. Mellanox’s 200G InfiniBand HDR started late, but since mid-2019, adoption has been faster than any previous rate. Nvidia released the 400G InfiniBand in November 2021, and the next generation may not be far away. Nvidia’s latest GPU system is designed for 800G optical transceivers, AOCs, and copper cables to extend the reach of NVLinks, a proprietary interconnect technology developed to scale GPU arrays. Nvidia expects NVLink connectivity to lead the adoption of higher data rate connections, including 200G SerDes.
LC expects CPO port shipments to increase from 50,000 in 2023 to 4.5 million in 2027. In contrast, AOC and copper cable shipments are expected to reach 10 million and 20 million units by 2027, excluding industrial and consumer applications. Despite the economic slowdown, cloud computing companies prioritize investments in data centers and AI clusters. For example, Amazon spent $10 billion less on order fulfillment infrastructure and reallocated those funds to data center construction in 2022.

Technavio: In the Next Five Years, the Global QSFP Module Market will have a Net Increase of US$1.127 Billion

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  • According to Technavio’s latest forecast, the market will grow by 9.3% in 2023. The global QSFP module market size will increase by USD 1.127 billion from 2022 to 2027, with Cisco and Intel leading the opportunity. The QSFP module market is fragmented and characterized by many established players. Established players such as Cisco, Intel, II-VI, NeoPhotonics, and Huawei Investment & Holding Co., Ltd. collectively occupy the largest share of the global QSFP module market. Vendors focus on expanding their product portfolios by developing advanced technologies and launching new products. Key players are investing in acquiring companies, enhancing product portfolios, and strengthening their presence in the global QSFP module market.
  • From 2022 to 2027, the global QSFP module market size is expected to grow by USD 1.127 billion. Moreover, according to Technavio, the market will grow at a CAGR of 9.6% during the forecast period.
  • From the perspective of the application market, data communication will be the largest contributor to market growth. The increasing bandwidth demands of data centers are driving the demand for QSFP modules in the data communications sector. Regionally, North America will account for 39% of the market growth during the forecast period. In North America, the United States is relatively leading in investment in data centers.
  • The suppliers involved in this report include Amphenol, Arista, Broadcom, Coherent, Corning, Dell, Foxconn, Fujitsu, Hitachi, Huawei, InnoLight, Intel, Lumentum, Molex, NVIDIA, Semtech, Sumitomo Electric, and TTI.

Yole: InP Market Will Reach USD 5.6 Billion in 2027, Applications Expand to Consumers

The migration to higher data rates, lower power consumption in data centers, and the deployment of 5G base stations will drive the development and growth of optical transceiver technology in the coming years. As an integral part of high-speed and long-distance optical transceivers, InP laser diodes remain the best for telecom and datacom photonic applications. Driven by the mass adoption of high data rate modules above 400G by large cloud service providers and national telecom operators who need to increase the capacity of fiber optic networks. Yole forecasts that the InP market, long dominated by datacom and telecom applications, is expected to grow from $2.5 billion in 2021 to around $5.6 billion in 2027.

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* For a long time, everyone has speculated about the application of InP in the consumer industry. 2022 marks the beginning of this adoption. For smartphones, OLED displays are transparent in the wavelength range of 13xx to 15xxnm. Original equipment manufacturers (OEMs) interested in removing the camera notch on the phone screen and integrating 3D sensing modules under the OLED display are considering switching to InP edge-emitting lasers (EELs), replacing the current GaAs vertical-cavity surface-emitting lasers ( VCSEL). However, the move is not straightforward from a cost and supply perspective.

* In 2021, Yole sees the first penetration of InP into wearable headphones. Apple is the first OEM to apply InP to the AirPod 3 series to help differentiate skin from other surfaces. This adoption has extended to the 14 Pro series of iPhones. The leading smartphone maker has changed the look of its top-of-the-line smartphone, the iPhone 14 Pro series, reducing the size of the notch at the top of the screen to a pill shape. To achieve this new front-facing camera layout, some other sensors, such as a proximity sensor, had to be placed under the display.

* An innovative company like Apple adding a differentiating feature to its product can significantly affect other companies in its supply chain, and vice versa. Traditional GaAs suppliers of Apple’s proximity sensors can switch from a GaAs platform to an InP platform because the two materials share similar front-end processing tools. Yole said it would certainly like to see new players enter the InP business, as the consumer market has huge potential. Beyond that, this move by Apple could trigger the penetration of InP into other consumer applications, such as smartwatches and automotive light detection and ranging (LiDAR) within silicon photonics platforms.

Yole: The Global Edge-emitting Laser Market Will Reach $7.4 Billion in 2027

* Since the development of lasers in the 1960s, they have been increasingly used in many fields. This has propelled the laser market into a trillion-dollar industry. Today, laser technology is ubiquitous in many traditional and emerging applications. These applications span optical communications, materials processing, displays, automotive lighting, medical dermatology, surgery, and 3D sensing in LiDAR.

* The market for semiconductor lasers, especially edge emitters, is fragmented. They are implemented in various laser types, including diode lasers, fiber lasers, diode-pumped solid-state lasers (DPSSL), and optically-pumped semiconductor lasers (OPSL). Traditional applications span industrial, telecom, scientific, and consumer markets. There are also many niche applications, including spectroscopic analysis for the military and aerospace markets and the life sciences market.

*Yole expects the edge-emitting laser (EEL) market to grow from USD 3.5 billion in 2021 to USD 7.4 billion in 2027 at a compound annual growth rate of 13% during this period (CAGR 2021-2027). This growth will continue to be driven by optical communications, such as optical modules and amplifiers for datacom and telecom and 3D sensing applications.

* EEL business is an important part of the optoelectronics industry. Despite the widespread adoption of semiconductor lasers for communication or sensing applications, the EEL industry also represents a challenging market. EEL producers are involved in several levels of integration depending on their expertise and equipment. They must choose carefully which market segments or applications they want to target based on their internal capabilities. Many applications require unique laser system specifications, which also impact EEL components. Furthermore, there is strong competition between direct diode, fiber lasers, DPSSL, OPSL, and gas lasers at the technical system level.

Yole: State of the MEMS Industry in 2022

* Yole predicts that the MEMS market will reach USD 22 billion in 2027 as emerging applications and combined innovative technologies provide more added value to MEMS sensors.

* MEMS sensors and actuators are part of everyday life and are found in systems ranging from smartphones to cars to fighter jets. MEMS is going through unprecedented growth, with the market size reaching $13.5 billion in 2021, an increase of more than 17% from $11.5 billion in 2020 (10% growth in 2020). The market is expected to pass the $22 billion mark five years from now, with a compound annual growth rate (CAGR) of approximately 9% from 2021 to 2027.

* Major growth comes from traditional MEMS devices (microphone, RF, inertial, optical), which are used in wearables and hearables (especially TWS in sensor packaging), 5G smartphones, ADAS, industrial monitoring, and many other applications. Nonetheless, the future is promising for emerging devices (currently a small market) such as gas sensors for air quality monitoring and ultrasonic MEMS for haptics and medical imaging, as well as MEMS timing/oscillators presently being hyped in the market and micro speakers. Both technologies have the potential to replace decades-old technologies, and they are headed in that direction.

* To support future growth, few investments and financing are related to various MEMS. The industry has funded many related products and applications, raising a total of more than 700 million US dollars. These products include OQeded for optical MEMS, Vesper for piezoelectric microphones, xMEMS for MEMS micro-speakers, Usound, and SonicEdge… New technologies and devices are still attracting buyers, and the number of mergers and acquisitions is still increasing: Bosch acquired Arioso, Safran acquired Sensor, and Murata acquired Resonant…Moreover, the cooperation helped the company develop new promising markets: TriLite and Dispelix, LaSAR Alliance, AudioPixels and Earth Mountain, etc…..

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IDC: Q322 Global Ethernet Switch and Router Market Continues to Grow

According to a recent report from IDC, in the third quarter of 2022, the global Ethernet switch market will grow by 23.9% year-on-year to $10 billion. Meanwhile, the worldwide enterprise and service provider (SP) router market grew 5.6% year-over-year to $4.1 billion.

Ethernet Switch Market Highlights: Following a 14.6% YoY growth in Q2 2022, the global Ethernet switch market will grow by 23.9% YoY in Q3 2022. In the first three quarters of 2022, it will increase by 17.4% year-on-year. The Ethernet switch market shows strong momentum in data and non-data center markets. Revenue in the non-data center/enterprise campus and branch office segment increased 25.6% year-over-year, while port shipments increased 25.3% year-over-year. Datacenter segment revenue increased 21.7% year-over-year, while port shipments increased 14.7% year-over-year.

Router Market Highlights: In the third quarter of 2022, the total revenue of the global enterprise and service provider router market increased by 5.6% year-on-year. The service provider segment, which includes communication and cloud service providers, grew by 3.8%, and its revenue accounted for 75.3% of the total market revenue. The enterprise router segment accounted for the remaining market share, and its revenue increased by 11.8% compared to last year. From a regional perspective, the US service provider and enterprise router market grew 16.7% year-over-year. The Canadian market was flat, up 0.1% year-over-year, while the Latin American market grew 35.2%. In the Asia-Pacific region (excluding Japan and China), the market declined by 7.7% year-over-year. Japan rose 9.3% year-on-year, while China fell 4.4% year-on-year. Western Europe market revenue increased by 11.8% year-on-year, Central and Eastern Europe market revenue decreased by 25.9% year-on-year, and Middle East and Africa revenue decreased by 2.8% year-on-year.

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Vendor Performance: Cisco’s Ethernet switch revenue grew 19.9% YoY in the third quarter of 2022, giving the company a 43.8% market share. Cisco’s service provider and enterprise router revenue grew 5.2 percent in the quarter, bringing its market share to 37.0 percent. Huawei’s Ethernet switch revenue rose 28.6% in the third quarter of 2022, bringing the company’s market share to 11.1%. The company’s service provider and enterprise router revenue fell 5.1% year-over-year, resulting in a decline in market share to 24.9%. Arista Networks’ Ethernet switch revenue grew 66.0% YoY and 14.0% QoQ in the third quarter of 2022, giving the company a 9.7% market share. H3C’s Ethernet switch revenue rose 7.5% in the third quarter of 2022, bringing the company’s market share to 5.4%. In the service provider and enterprise router segment, H3C’s revenue was down 1.7%, and the company’s market share was 2.0%. HP’s Ethernet switches grew 2.4 percent in the quarter, for a 4.8 percent market share.

Dell’Oro Market Report

* Dell’Oro: Q322 Global Service Provider Router Market up 5% YoY

According to a recent report released by Dell’Oro Group, in the third quarter of 2022, driven by the continued acceleration of growth in North America and CALA (Caribbean and Latin America), the global service provider (Service Provider, SP) router and aggregation switch market year-on-year 5% increase. Ivaylo Peev, the senior analyst at Dell’Oro Group, said: “The North American market remains on the upswing as service providers upgrade their networks to take advantage of 400Gbps technology and expand their networks to accommodate growing traffic demands. 5G, IoT, pervasive video Network traffic demand continued to grow, driven by other technology trends. Globally, revenue growth in the SP edge router and aggregation switch segments was partially offset by flat performance in the SP core router segment. The latest ASIC-based edge routers and The rapid adoption of line cards is a key reasons for the growth of the edge router market. These ASICs support 400Gbps connections and provide the highest available bandwidth.” Additional highlights from Dell’Oro’s Q3 2022 Service Provider Routers and Switches Report: EMEA (Europe, Middle East, and Africa) and APAC (Asia Pacific) revenue declines undercut high (double-digit) revenue growth in North America and CALA. The market for SP edge routers and aggregation switches grew strongly, while the market for core routers stabilized. Supply chain constraints eased during the quarter and component availability improved, allowing SP router suppliers to address some of their order backlogs. Among the top five SP router vendors, Cisco and Juniper recorded solid revenue growth, while Huawei and ZTE declined. Nokia posted a strong quarter based on euro (EUR) revenue reporting, but the unfavorable euro-dollar (USD) exchange rate led to a decline in its dollar revenue.

* Dell’Oro: Hyperscale Data Center Capex Expected to Grow 28% in 2022

According to a recent report from Dell’Oro, capital expenditures for hyper-scale data centers are expected to increase by 28% in 2022. However, Dell’Oro expects cloud service providers to enter a digestion cycle in 2023. “Data center Capex has registered double-digit growth for the fifth consecutive quarter, driven by U.S. hyper-scale investment in new data centers,” said Baron Fung, research director at Dell’Oro Group. Providers were able to significantly reduce backlogs in the remaining cloud and enterprise markets in 2019. However, we expect growth to face headwinds as hyper scalers wind down their expansion cycles and enterprises tighten IT in an uncertain business environment Capex.” Additional takeaways from the Q3 2022 Data Center IT Capex Quarterly Report: China’s cloud and enterprise data center markets are slashing spending. Upcoming changes in server architecture will drive long-term data center investments. Datacenter Capex is expected to grow in the single digits through 2023.

* Dell’Oro: Q322 Global Data Center Switch Sales Hit a Record, Up 20% Year-on-Year

According to a recent report released by Dell’Oro, in the third quarter of 2022, the sales of global data center switches increased by nearly 20% year-on-year, reaching a historical high in the third quarter and the first three quarters. Arista, Huawei, Juniper, and white box vendors increased their revenue share, with Arista increasing its revenue share by more than 6 percentage points in the quarter. Sameh Boujelbene, Senior Research Director, Dell’Oro Group, said: “As the supply environment continues to improve, more orders are finally being fulfilled, as evidenced by the double-digit growth in port shipments during the quarter. With such a strong performance, the market is expected to achieve double-digit growth in 2022. For 2023, although the macroeconomic situation may worsen, we expect a large backlog from 2022, coupled with 200/400Gbps Accelerating adoption, coupled with continued strong demand from hyper scalers, will drive the market to see steady growth once again.” Other highlights from the Q3 2022 data center switch report: All segments saw growth, including cloud service providers (SPs), telecom operators, and large enterprises, of which the cloud segment contributed 80% of the year-on-year growth in the quarter. North America, China, and Asia Pacific (excluding China) achieved double-digit growth, with the North American market contributing 90% of the total growth for the quarter.

Meanwhile, the Europe, Middle East, and Africa (EMEA) region declined due to macroeconomic headwinds. In the quarter, 200Gbps and 400Gbps port shipments were close to 2 million, accounting for more than 10% of total data center switch port shipments, and revenue accounted for more than 20% of the overall market. The growth was mainly due to the accelerated adoption and improved supply of large cloud service providers.

* Dell’Oro: Open RAN Performance in the Third Quarter of 2022 Exceeded Expectations Again

According to a recent report from Dell’Oro, the Open RAN market continues to develop faster than expected. Preliminary findings suggest that the regional drivers driving the Open RAN market forward in the first half of 2022 carried over into the third quarter, resulting in a more than doubling of Open RAN revenue year-over-year. Stefan Pongratz, vice president of Dell’Oro Group, said: “While open RAN commercial revenues continue to show a surprising upward trend, we maintain our previous view that the market outlook is mixed. Early adopters tend to have a more open direction. Still, at the same time, there is more uncertainty in the market regarding the early majority of operators and the broader RAN supplier outlook. After all, the main driver of the Open RAN market growth so far this year. The main force is the deployment of non-multi suppliers.” Other key points of the Open RAN report: In the first three quarters of 2022, the top four suppliers of Open RAN revenue include Samsung, Fujitsu, NEC, and Mavenir. Globally, pilot programs are on the rise. However, in the first three quarters of 2022, North America and Asia Pacific still dominate the market and account for more than 95% of the total market revenue. More than 80% of the year-to-date growth was driven by North America, driven primarily by massive non-Massive MIMO and Massive MIMO macro deployments. So far, the rise of Open RAN has had a limited impact on the concentration of the broader RAN (proprietary and open RAN) market. The report data shows that from 2021 to the first three quarters of 2022, the combined RAN share of the top five RAN suppliers (Huawei, Ericsson, Nokia, ZTE, and Samsung) has dropped by less than one percentage point. Dell’Oro has raised its short-term forecast to reflect a higher baseline. Open RAN is expected to account for 6% to 10% of the RAN market by 2023. However, the growth rate of Open RAN is expected to slow down next year.

Dell’Oro: Q322 Global PON Equipment Revenue Up 27% Year-onYear

* In the third quarter of 2022, total global broadband access equipment revenue increased by 17% year-on-year to US$4.7 billion. Spending by service providers on PON equipment continues to drive the overall market, while PON OLT revenue this quarter broke the previous quarter’s record of $1.3 billion. Jeff Heynen, Group Vice President, Dell’Oro, said: “Service provider investment in new fiber broadband networks and equipment continues to grow due to a strongly competitive environment and continued government subsidies. Given the macroeconomic headwinds, will this momentum and resilience continue?” It will be an interesting question in the fourth quarter and 2023.” About $1.4 billion of broadband equipment revenue in the quarter came from North America. Among them, 50% are used for Cable equipment, 38% are used for optical fiber equipment, and the remaining income comes from DSL and fixed wireless access equipment. North America’s decision to stick with Cable equipment comes as other regions, such as Europe, are shifting spending elsewhere. For example, in the entire EMEA (Europe, Middle East, and Africa) region, PON accounts for 54% of total spending on broadband equipment (44% in the same period last year). In comparison, Cable equipment accounts for only 18% (20% in the same period last year). The growth rate of PON expenditure in North America’s overall broadband equipment revenue slowed down significantly, rising from 32% in the same period last year to 38%. In contrast, the decline in the proportion of Cable equipment was not so severe. Heynen believes that with the emergence of DOCSIS 4.0, the downward trend of cable equipment in the North American market will be reversed. Still, he believes that the same situation will not occur in the EMEA market.

Additional Highlights from the Q3 2022 Broadband Access and Home Networking Quarterly Report:

1. In the third quarter of 2022, global XGS-PON ONT shipments will reach 1.5 million units, the second consecutive quarter exceeding 1 million units.

2. Total cable access concentrator (Cable Access Concentrator) revenue was flat year-on-year at $259 million. Both remote PHY equipment and remote OLTs reached record levels during the quarter as cable operators continued to expand their DAA and fiber plans.

3. Cable CPE shipments increased 5% year-over-year to 8.7 million units as suppliers continued to complete orders that had accumulated for multiple quarters. Of this, 75% went to North America, compared to about 16% to the European market (down 4% from before). Total revenue in this segment increased 9% year-over-year due to the rising percentage of high-end DOCSIS 3.1 gateways as a percentage of total shipments (DOCSIS 3.1 devices accounted for approximately 82% of Cable CPE shipments).

4. DSL spending continues to decline. Two years ago, DSL port shipments were 22.3 million and were expected to plummet to 7.5 million in 2022, with the vast majority going to the European market.

Fiber Optic Industrial Report 19

Dell’Oro Market Report

* Dell’Oro: 3Q22 Supply Chain Eases Campus Switch Market to Record High

According to a recent report released by Dell’Oro, in the third quarter of 2022, global campus switch sales will increase by 23% year-on-year, which is the highest growth rate in the past 20 years, even exceeding the two market downturns in 2008 and 2020. speed of recovery. Most vendors, large and small, saw broad-based growth. Among them, Cisco was the only vendor whose market share increased significantly, and its share increased by nearly 5 percentage points in the quarter.

Sameh Boujelbene, vice president of Dell’Oro Group, said: “The gradually improving supply situation has helped to release a long-standing backlog, which has allowed port shipments to reach record levels this quarter and the first nine months of this year. Unfortunately, most of the backlog completed in the quarter was placed ahead of price increases. As a result, supplier margins continued to be suppressed as costs continued to rise but were not passed on to customers. As a point of reference, some supply-constrained components experienced rising costs 100 to 500 times. With a strong performance in the first nine months of this year, the market is expected to achieve strong double-digit growth in 2022. Although the growth in 2022 exceeded expectations, we have not changed our forecast for 2023, and market growth is forecast to decelerate to single digits. This growth will be driven by near-record backlog levels reported by most manufacturers. However, macroeconomic headwinds may dampen market performance as 2023 progresses and backlogs begin normalizing.”

Additional highlights from the Q3 2022 Campus Ethernet Switch report: As supply remains tight, changes in market share are and will continue to be impacted by sharp quarter-to-quarter variations, which may not necessarily reflect competitive displacement but rather the delivery time. After being replaced by H3C in the first quarter of 2022, Huawei continued to maintain its revenue leadership in China in the second and third quarters. 5/5.0 Gbps ports grew more than 40% year-over-year, marking the second consecutive quarter of strong double-digit growth. What’s changed this quarter is that, unlike previous quarters, when Cisco accounted for more than two-thirds of shipments in this segment, this quarter saw growth across all vendors.


* In terms of 5G users, the three major operators added 34.354 million new 5G package users in November, an increase of 9.582 million compared with the previous month. The cumulative number of 5G package users totaled approximately 1.067 billion.

* In the fourth quarter of the fiscal year 2022, Ciena’s revenue was US$971 million, compared with US$1.042 billion in the same period last year, a year-on-year decrease of 6.8%.

* Emcore’s FY2022 fourth-quarter sales revenue was $25.6 million, with $21 million from Aerospace & Defense (A&D) and $4.6 million from Broadband. Coherent said it had signed a Memorandum of Understanding (MoU) with two Korean institutions, the Institute of Electronics and Telecommunications and the Korea Advanced Institute of Science and Technology, to foster collaboration in advanced electronic and photonic devices, focusing on the Korean market.

* Marvell’s third-quarter fiscal 2023 sales of $1.537 billion were at the lower end of the company’s previous forecast range, up 27% year-over-year. Semtech’s sales revenue in the third quarter of the fiscal year 2023, ending on October 30, 2022, was US$178 million, down 15.1% quarter-on-quarter and 8.9% year-on-year. Broadcom’s sales revenue in the fourth quarter of the fiscal year 2022 was US$8.93 billion, a year-on-year increase of 21%.

* Microsoft announced the acquisition of next-generation hollow-core fiber (HCF) provider Lumenisity. Ziply Fiber has entered into an acquisition agreement with iFiber Communications.

* Huagong Zhengyuan launched the XGSPON OLT E2 optical module used in the access network and the 400G LR4 optical module used in the transmission field. InnoLight Technology Research Institute released the industry’s first high-power, anti-reflection laser. Marvell Technology has introduced the Alaska C X9340P, a new 5nm 1.6T Ethernet PHY. The new products feature 100G I/O capabilities with built-in Media Access Control Security (MACsec) and total Precision Time Protocol (PTP) support, making them suitable for cloud data centers and communication network applications.

*LightCounting data shows that in the third quarter of 2022, the global wireless infrastructure market performance continued the weakness in the second quarter of 2022, indicating that the wireless infrastructure market driven by 5G is approaching the first wave of 5G deployment subsidies. Peak. The AOC and DAC markets will stagnate in 2023, resume growth in 2024, and CPO will start to gain market share in 2024. According to Dell’Oro data, in the third quarter of 2022, the total revenue of global broadband access equipment increased by 17% year-on-year to US$4.7 billion. Spending by service providers on PON equipment continues to drive the overall market, while PON OLT revenue this quarter broke the previous quarter’s record of $1.3 billion.

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