Ethernet boom set to drive 10G module ramp
A new analyst report claims that the market for 10 Gb/s and 40 Gb/s optical communication modules based around semiconductor lasers and modulators will quickly expand from $0.9 billion this year to reach nearly $4.3 billion in 2011.
According to the forecasters at Communications Industry Researchers (CIR), the main reason behind the expected boom will be the deployment of products for use in short-range 10 Gb/s applications.
"The biggest story for 10G is the growth in Ethernet port sales, fuelled by the need for aggregating the surging number of ports on both business and even consumer computers," said CIR, citing recent increased optimism among both optical networking equipment vendors and component manufacturers.
The impact of the Ethernet boom is apparent in CIR's detailed market projections. For example, in 2006 it expects sales of high-speed (10 Gb/s and 40 Gb/s) modules for wavelength division multiplexing (WDM) and Ethernet applications to be in the same ballpark, worth $266 million and $398 million respectively.
However, in five years time the disparity between these two markets will be made clear. In 2011, CIR's analysts predict that the WDM market will have grown by a healthy 179 per cent to reach $743 million. But compare that with the Ethernet segment, which is expected to have grown a staggering six-fold to hit $2.3 billion over the same period.
2008 will be the critical year when much of this growth occurs, with the Ethernet market for 10 Gb/s modules set to more than double from the 2007 figure to more than $1.5 billion.
Although the market for modules does not equate directly to that for manufactured semiconductor lasers, many of the module suppliers also make optical components based on III-V materials.
Chief among these are firms such as JDSU, Finisar, Avago, Opnext and others. Since it supports all of the standard module platforms, and is also working on the new "SFP+" form factor that CIR expects to challenge today's standards before long, Sunnyvale-based Finisar may be in the best position to exploit the rapid growth of the market.
Avago and JDSU are regarded as the two biggest suppliers in the sector currently.
The report also predicts that 26 million ports for 10 Gb/s Ethernet will ship in 2011, equating to an average price just shy of $90 per port.
The Market for 10G and 40G Modules report is available now from CIR. Click here for purchase details
