05 Apr 2007
CIR's latest analysis of the future market for optical components predicts that sales of tunable lasers will grow rapidly to reach almost $1 billion by 2012.
The resurgent market for optical components used in fibre-optic networks will almost triple in value between now and 2012, predicts a new report.
Market analysts at CIR expect annual sales of these components to grow from $2.8 billion this year to reach $7.9 billion in 2012.
And although that total includes various different semiconductor and non-semiconductor components, devices based on III-V materials will be among the fastest-growing individual segments.
Lawrence Gasman, the lead author of the report, predicts that the market for tunable lasers will be a particularly hot area over the next five years, with compound annual growth of 37 percent. By 2012, that will translate to a total market value of nearly $1 billion.
Over the same period, CIR predicts that the compound annual growth rate of other key components will be as follows:
• Fixed-wavelength lasers: 24 percent
• Detectors and receivers: 28 percent
• External modulators: 35 percent
Unsurprisingly, given those growth rates, Gasman believes that the next five years will witness a 'mini-boom' in fibre-optic components: "[The mini-boom] will be evenly spread to a degree," he told compoundsemiconductor.net. "However, two hot spots are tunable lasers and filters/gratings, both driven by wavelength-division multiplexing (WDM)," Gasman added. "We expect WDM to serve increasingly the core of the network and tunables are now the standard way of deploying dense WDM."
Companies such as Santur, Intel and JDSU, which already have a strong foothold in tunable lasers, should be able to capitalize on this increased demand. Other chip manufacturers such as Bookham and CyOptics will also stand to benefit.
Syntune, a fabless company whose tunable lasers are manufactured at the CyOptics InP foundry, recently said that it had simplified its fabrication method and produced the first monolithic tunable laser for 10 Gbit/s transmission (see related magazine article).
With technologies such as 10 Gigabit Ethernet and FibreChannel now using optical instead of traditional copper wire transmission, fibre-optic components are also being brought closer to the end users.
Gasman reckons that this accelerating deployment of optical technologies in corporate networks and data centres will require a significant ramp in the supply of lasers. Estimating the current value of the market for lasers in 10 Gigabit Ethernet to be worth $300 million, the analyst says that extra demand will swell sales of these lasers to $1.2 billion by 2012.
Another key market driver will be residential access, where passive optical networks (PONs) are becoming the technology of choice. CIR's report predicts that more of the major telecom carriers will adopt ambitious PON deployment strategies over the next few years.
The knock-on effect of this for semiconductor manufacturers will again be extra demand for PON lasers and photodetectors.
Taken together, the market for tunable lasers, fixed-wavelength lasers and PON photodetectors should be worth around $3 billion in 2012, compared with about $1 billion today.
Forecasts of rapid growth in demand for optical components in networking applications were of course a notable feature of the unsustained technology bubble of the late 1990s, but Gasman says that there will be no subsequent bust this time around.
In fact, the market analyst believes that following the period of rapid growth over the next five years, demand for optical components will settle down to a very healthy annual growth rate of 15 percent.
"There are a lot of differences between now and then," said Gasman of the contrast between the two boom periods. "The boom in the past was partly the 'madness of crowds', which certainly is not going to happen again any time soon."
"More importantly, that whole boom was a house of cards constructed as the result of market distortions caused by bad policy decisions," Gasman concluded. "We are still in the process of getting back to normal."
• For full details of CIR's latest optical components report, visit the company's web site.