Optoelectronic Components Market to Embark on Expansion Drive as Demand for Bandwidth Rises
Driven by the telecommunications industry s dominant position amongst end-users of optoelectronics, intensifying demand for ever-increasing bandwidth directly benefits market growth in optical fibers and their attendant equipment. The advent of new technologies such as DWDM provides further stimulus for market growth.
Soaring internet usage across Europe has contributed significantly to the enormous demand for bandwidth. The deregulation of telecommunications and the recovery of the European semiconductor industry are further factors enhancing sales of optoelectronic components.
Although some segments (such as optocouplers) are beginning to stagnate, the overall the market is quite dynamic, rising from $1.11 billion in 1998 to generate revenues worth $2.66 billion from 5.62 billion units in 2005.
In order to remain competitive, reports a new study by Frost & Sullivan, vendors need to fully understand both the technological trends and the economics of the European market. New applications and increased penetration provide optoelectronics manufacturers with opportunities. The importance of innovation in the more lucrative market segments also displays potential for advancements in the market.
Opportunities exist in third party manufacturing and in the creation of highly standardized components suitable for a wide range of applications, the study remarks.
As industries such as optical data storage, the internet and telecommunications continue to experience exponential growth, and new end-user markets open up, the European market for optoelectronic components is poised for overall growth.
The study reiterates: "The market has been primarily driven by the snowballing growth of internet usage, escalating expansion in telecommunications, and the possibility of new applications, most notably automotive and transportation. Technological improvements and price decreases have further fuelled growth."
Since optoelectronics is a component industry, its fortunes are closely linked to the performance of the products into which optoelectronic components are incorporated. For instance, the new market for DVDs has had a beneficial knock-on effect on the optoelectronics industry.
In terms of product markets, the light-emitting diodes sector is clearly spearheading market growth, expected to double its 1998 revenue level of $308.0 million over the forecast period. Improving performance, coupled with the increasing number of applications in the automotive sector, as well as offering distinct advantages over incandescent and fluorescent lamps, are all factors driving the light-emitting diodes market into the new millennium.
Meanwhile, the exponential growth in data traffic, falling prices of new products and growth in optical storage systems are pushing revenues ahead in the laser diodes market, valued at $281.0 million in 1998.
The optoelectronic amplifiers market is estimated by Frost & Sullivan to have been worth $187.1 million in 1998. According to the study, the explosion in telecommunications traffic, WDM applications driving technological advances, and network planners shifting to 1,550nm, will boost sales of optoelectronic amplifiers over the forecast period.
Approximately ninety companies are active players in the European market for optoelectronic components, led by Lucent Technologies, Nortel, Hewlett-Packard and Infineon Technologies.
On the whole, companies tend to be active in more than one product segment; it is rare for a single-segment company to thrive. Overall, the number of European companies in the market is decreasing; those players leaving the market are outweighed by new entrants, typically from low labor cost countries.
Frost & Sullivan is an international marketing consulting company that monitors a comprehensive spectrum of high-tech markets, including electronics, for market trends, market measurements and strategies. This ongoing research is utilized to complement a series of research publications--such as the European Flat Panel Display Markets--to support industry participants with customized consulting needs. Free executive summaries of all Frost & Sullivan reports are available to the press.
Research Publication: 3731-25 - European Optoelectronic Component Markets Publication date: November 1999 Price: $4150 USD
Contact: Erica Brown, Frost & Sullivan Tel: +1 212 964 7000; fax: +1 212 619 0831 Email: ebrown@frost.com
Erica Brown, Frost& Sullivan Tel: +1 212 964 7000; fax: +1 212 619 0831 Email: ebrown@frost.com
E-mail: ebrown@frost.com
