Optical network component market to hit $2.7 billion by 2011

15 Feb 2007

Component market to grow at average rate of 3.5% per year, driven by business decentralization and growing demand for high-rate communications.

Global market forecast

The global market for optical network processing units was worth at least $2.1 billion in 2005, rising to more than $2.2 billion in 2006. At an annual growth rate of 3.5%, the market will reach almost $2.7 billion by 2011, according to a report by market analyst BCC Research.

The report, entitled The Market for Optical Network Components, says that network processor unit (NPU) optical network components show the greatest growth potential. In 2006, sales of these totaled $355 million, and this is set to reach $461 million by 2011.

Backplane optical network components will maintain the largest share of the market through the forecast period. In 2006, sales totaled $952 million and they are set to climb to more than $1.1 billion by 2011, with a steady 42% market share. Other categories assessed include system on chip (SOC) optical network components and transceiver network components.

The report says that the communications sector's move towards networked information exchanges is evident in every type of business and in private homes. The trend for companies to move employees out of central sites to remote or home offices means that the number of individual network connections is increasing rapidly each year.

At the core of these networks are optical semiconductors, says BCC. These provide the power and intelligence needed to move information. Recently, there have been significant improvements in the design of optical network microprocessors, which are now better able to support complex networking functions in small form factors.

Semiconductor suppliers have been driving these advances in order to take advantage of the ever-expanding market for network semiconductors. With network use expanding, they are finding a growing number of uses for their products. The end result is an expanding market.

• Market for Optical Network Components (Ref: IFT059A) is published in February 2007 for $4250. For more information, see BCC Research.