IHS: 100G+ WDM & China Spending drives Global Optical Network Equipment Market Growth

by Heidi Adams, senior research director, transport networks, IHS Technology:

  • The long-haul wavelength-division multiplexing (WDM) segment of the optical network hardware market outperformed the metro WDM sector in Q2 2016, with spending increasing 23 percent sequentially and 18 percent from a year ago
  • Optical spending in China got a huge uplift in Q2 2016, growing 41 percent quarter-over-quarter and 22 percent year-over-year; China comprised over a quarter of global optical gear spending in the quarter
  • Riding the wave of the strong spending cycle in China—coupled with solid gains in EMEA (Europe, Middle East, Africa) and CALA (Caribbean and Latin America—Huawei notched a 41 percent year-over-year revenue uptick in Q2 2016 and grabbed a 32 percent share of the optical hardware market


IHS Analysis

Driven by 100G+ long-haul WDM and a spending spree in China, the global optical network equipment market grew 15 percent sequentially in Q2 2016 and 7 percent from the year-ago quarter, to $3.5 billion.

In Q2 2016, the WDM equipment segment notched gains of 13 percent quarter-over-quarter and 10 percent year-over-year as 100G long-haul deployments accelerated and 200G+ deployments started to ramp. WDM long haul comprised just over half of WDM spending in the quarter.

Metro WDM growth was more muted in Q2 2016, increasing just 2 percent from Q2 2015. However, IHS Markit expects metro WDM growth to pick up toward the end of 2016 as new metro data center interconnect (DCI)–oriented products start shipping in volume and as major metro deployments in North America—principally by Verizon—begin to ramp.

The Synchronous Optical Networking (SONET) and Synchronous Digital Hierarchy (SDH) segment increased sequentially in Q2 2016 driven by project-specific spending, but it maintained its longer-term overall decline with spending down 8 percent year-over-year.

Optical Report Synopsis

The IHS Markit optical network hardware report tracks the global market for metro and long-haul WDM and SONET/SDH equipment, Ethernet optical ports, SONET/SDH ports and WDM ports. The report provides market size, market share, forecasts through 2020, analysis and trends. Vendors tracked include ADVA, Ciena, Cisco, Coriant, ECI, Fujitsu, Huawei, Infinera, NEC, Nokia, ZTE and others.

For information about purchasing this report, contact the sales department at IHS Markit in the Americas at (844) 301-7334 or [email protected]; in Europe, Middle East and Africa (EMEA) at +44 1344 328 300 or[email protected]; or Asia-Pacific (APAC) at +604 291 3600 or [email protected].

IHS References:

Optical Network Hardware Market Tracker – Regional, China, Japan, India