LightCounting

LightCounting: Q1 2024 Optical Network Equipment market split between telecoms (-) and hyperscalers (+)

Posted on by Alan Weissberger

As has been the trend for the past several quarters, Q1 2024 results for the optical communications market were sharply split between very weak sales in the telecom segment (Communications Service Providers or CSPs) and continued strong demand by the hyperscalers (cloud giants). The combined capex of the Top 15 CSPs declined year-over-year for the sixth quarter in a row, while the Top 15 ICPs spending grew for the second quarter in a row, paced by Alphabet (+91%) and Microsoft (+66%). Chinese ICPs spending also increased dramatically, suggesting the AI boom is hitting China too.

Equipment makers may have felt like passengers in an airplane hitting an air pocket, with networking and optical transport gear sales down 10% y-o-y, and server and switch maker sales up just 4%. Even the smaller and more focused suppliers like Ciena and Infinera were uniformly down compared to Q1 2023.
The stark contrast between telecom and datacom (hyperscalers) is shown in this chart:
Sales of 400G and 800G Ethernet optical transceivers for deployments in AI clusters were in line with our expectations. Although the recovery in demand for DWDM started in Q4 2023, Q1 2024 was slow. No recovery is expected in demand for FTTx and WFH transceivers until 2025-2026. Despite weakness in several segments, cloud demand is expected to lift annual sales of Ethernet transceivers by 40% in 2024, pushing the overall transceiver market to a new high of more than $2.6 in Q2 2024. Innolight continued to report above average results, with record sales for the third quarter in a row.
The semiconductor segment grew 61% y-o-y driven almost solely by Nvidia (up 262%), again highlighting the dichotomy between those feeding the ICPs AI ambitions, and those supporting the traditional communications providers. Broadcom deserves honorable mention (up 43% y-o-y), as its booming datacenter sales suggest that the impact of the AI arms race is starting to expand beyond Nvidia.
Looking ahead we expect continued spending growth by ICPs this year, benefiting the better-positioned suppliers like Nvidia, Broadcom, and Innolight. CSP spending on the other hand will languish for another quarter or two at least, putting a drag on the larger NEMs like Ericsson and Nokia especially.
LightCounting’s Quarterly Market Update consists of a PowerPoint slide deck and a data-packed spreadsheet, with both vendor survey results and publicly reported financial results across six market segments.
References:

LightCounting: Silicon Photonics chip market to hit $3 billion in 2029

Posted on by Alan Weissberger
Sales of silicon photonics chips will increase from $0.8 billion in 2023 to just above $3 billion in 2029. Sales of PICs with TFLN modulators will grow from almost zero now to $0.75 billion by 2029. Sales of bulk LiNbo3 modulators used in legacy DWDM transceivers will continue to decline, becoming negligible by 2029.
Surging demand for optical connectivity in AI Clusters has reversed a decline in market share of GaAs VCSELs. Nvidia purchased close to 2 million 400G SR4 and 800G SR8 transceivers and plans to buy 4 million more this year. These modules use 100G VCSELs, which many experts expected not to be reliable enough for deployment. It is a true comeback story for VCSELs, but it will not last. Nvidia is prioritizing silicon photonics technology for its next generation transceivers.
The Figure below shows sales data of lasers and photonic integrated circuits (PICs) used in optical transceivers, sorted by technology.
LightCounting expect gradual declines in market shares of GaAs and InP based transceivers, while silicon photonics (SiP) and Thin Film Lithium Niobate (TFLN) PICs will gain share. Adoption of LPO and CPO will also contribute to the market share growth of SiP and possibly even TFLN devices.
Companies manufacturing TFLN products are joining forces in accelerating supply chain development. Advanced Fiber Resources (AFR), HyperLight, Fujitsu Optical Components (FOC), Liobate and Ori-Chip as well as their partners organized a special workshop on TFLN at OFC 2024, which was very well attended. We expect more companies to invest into an infrastructure needed to scale up production of TFLN wafers and PICs.
Silicon photonics will provide an integration platform for TFLN. If we include TFLN in a broader definition of silicon photonic PICs, sales of these products will reach close to $3.8 billion by 2029.
About the Author:
Vladimir Kozlov, Founder and CEO of LIGHTCOUNTING, an optical communications market research company.
References:

Highlights of LightCounting’s December 2023 Quarterly Market Update on Optical Networking

Posted on by Alan Weissberger

LightCounting’s Quarterly Market Update report [1.] for Q3 2023 revealed that the optical communications industry financial results were disappointing.

Every financial market indicator that the market research firm tracks – ICP (Integrated Communications Provider) and CSP (Communications Service Provider) capex, datacom and networking equipment, and semiconductor (x-Nvidia) and optical components sales – all had negative growth compared to Q3 2022.

Note 1. LightCounting’s Quarter Market Update reports are designed to provide an easy-to-digest snapshot of optical transceiver growth trends, backed up by detailed quarter-by-quarter sales data collected via LightCounting’s proprietary vendor survey. Performance metrics and commentary for top-tier telecom and internet service providers, network and datacom equipment makers, and optical component and semiconductor vendors are also included to provide an understanding of what drives sales trends at the transceiver level.

………………………………………………………………………………………………………………………………….
There were some notable exceptions to the generally downbeat results:
  • Alphabet and Microsoft had record capital expenditures.
  • Arista, Broadcom, Calix, Innolight, and Nvidia all reported record revenues.
With the exception of broadband access vendor Calix, the standout equipment and component makers all had one thing in common – they all benefited from increased spending on Artificial Intelligence (AI) infrastructure by the large ICPs. Nvidia reported sales growth of more than 30% sequentially and more than 200% year-over-year, perhaps the clearest indicator of how frenzied the race to grow AI infrastructure has become.

LightCounting is projecting, based on its current analysis, that sales increased in Q3 and will increase further in Q4, to a new record high, as shown in the figure below. This data includes estimates for 400G and 800G transceivers manufactured by Nvidia internally.

The expectation of growth in Q4 carries over to 2024 as well and is consistent with the guidance given by several companies ranging from Alphabet and Amazon to Coherent and Lumentum.  The big caveat is that growth in 2024 will be tightly focused on AI-related infrastructure, and growth in demand for those products is expected to far outstrip demand in other segments like traditional telco and enterprise networks. Most of the growth in the optical components and modules market will come from sales of 800G transceivers.

References:

https://www.lightcounting.com/report/december-2023-quarterly-market-update-199

LightCounting: Will Network Transformation resolve telecom’s paradox?

Industry Analysts: Important Optical Networking Trends for 2023

MTN Group and NEC XON deploy Africa’s first 400G optical transponder using TIP’s Phoenix

 

 

LightCounting: Wireless infrastructure market down in 2Q-23 (no surprise)

Posted on by Alan Weissberger
Executive Summary:
As anticipated, it was almost a carbon copy of 1Q23. This sustained declining pattern confirms our prediction that we have entered the post-peak era. While the U.S. market posted its steepest drop, the strong 5G rollouts in China and India along with steady activity in EMEA and Southeast Asia were not enough to keep the wireless infrastructure market out of decline. On the open vRAN front, DISH in the U.S., Rakuten Mobile in Japan, and a few Rakuten Symphony customers failed to produce sequential growth for the market but did create double digit YoY growth. Meanwhile, the mobile packet core market was the only category that grew sequentially.
Despite a weak quarter, Huawei extended its lead over Ericsson, which managed to keep its share stable. In the meantime, once again, Nokia gained market share at the expense of the Japanese vendors. Samsung lost share while ZTE’s remained stable.
“The vibrant secondhand market for 4G and 5G equipment coming from the removal of the Chinese vendors banned in specific countries is not helping either, and that is here to stay and will contribute to the downward trend. In fact, what was supposed to be a boon for Ericsson and Nokia in particular is at this point negatively affecting the short-term market in pockets of EMEA and CALA,” said Stéphane Téral, Chief Analyst at LightCounting Market Research and Founder of Téral Research.
As a result, this year (2023), we expect the market to decline over 2022 with India in the 5G driver’s seat. In the long run, our service provider 20-year wireless infrastructure footprint pattern analysis points to a 2022-2028 CAGR of -3% characterized by low single-digit declines through 2027, which appears to be the bottom leading to flatness or slight growth in 2028. In fact, we expect 5G to slightly pick up in 2027, driven by upgrades needed to prepare networks for 6G. Given the ongoing 6G activity, we believe something labeled 6G will be deployed in 2028.
About the report:
Wireless Infrastructure quarterly report analyzes the wireless infrastructure market worldwide and covers 2G, 3G, 4G and 5G radio access network (RAN) and core network nodes. It presents historical data from 2016 to 2022 of quarterly market size and vendor market shares, and a detailed market forecast through 2028 for 2G/3G/4G/5G RAN, including open vRAN, and core networks (EPC, vEPC, and 5GC) for each region (North America, Europe Middle East Africa, Asia Pacific, Caribbean Latin America). The historical data accounts for the sales of more than 30 wireless infrastructure vendors, including vendors that shared confidential sales data with LightCounting and Téral Research. The market forecast is based on a model correlating wireless infrastructure vendor sales with 20 years of service provider network rollout pattern analysis and upgrade and expansion plans.
More information about the report is available at:
Historical data accounts for sales of the following vendors:
Vendor Segments Source of Information
Altran vRAN Estimates
Amdocs 5GC Estimates
ASOCS vRAN (DU) None, supplies other RAN/vRAN vendors
Baicell RAN (RU) None, supplies other RAN/vRAN vendors
Benetel Open RAN (RU) None, supplies other RAN/vRAN vendors
Cisco EPC, vEPC, 5GC Survey data and estimates
China Information and Communication Technologies Group (CICT) RAN Estimates
Comba Telecom RAN/vRAN (RU) None, supplies other RAN/vRAN vendors
CommScope (acquired Phluido vRAN patents, October 2020) vRAN (RU, DU) Estimates
Corning vRAN Estimates
Dell vRAN (DU) None, supplies other RAN/vRAN vendors
Enea 5GC Estimates
Ericsson RAN, vRAN, 2/3G Core, EPC, vEPC, 5GC Estimates
Fairwaves RAN/vRAN (RU) None, supplies other RAN/vRAN vendors
Fujitsu RAN Survey data and estimates
HPE 2G/3G core, 5GC Estimates
Huawei RAN, vRAN, 2/3G Core, EPC, vEPC, 5GC Survey data and estimates
JMA Wireless vRAN Estimates
KMW RAN/vRAN (RU) None, supplies other RAN/vRAN vendors
Kontron vRAN (DU) None, supplies other RAN/vRAN vendors
Mavenir (acquired ip.access, September 2020) vEPC, vRAN, 5GC Survey data and estimates
Microsoft (acquired Metaswitch and Affirmed Networks, 2020) 5GC, vEPC and 2G/3G core Estimates
Movandi RAN/vRAN (RU/repeater) Estimates
MTI Mobile vRAN (RU) None, supplies other RAN/vRAN vendors
Node-H vRAN (small cells) Estimates
Nokia RAN, vRAN, 2/3G Core, EPC, vEPC, 5GC Survey data and estimates
NEC (including Blue Danube Systems, January 2022) RAN, vRAN (RU), EPC, 5GC Survey data and estimates
Oracle 5GC Estimates
Parallel Wireless vRAN (CU, DU) Estimates
Pivotal RAN/vRAN (RU/mmWave repeater) Estimates
Quanta Cloud Technology (QCT) vRAN (DU) None, supplies other RAN/vRAN vendors
Qucell RAN, vRAN Estimates
Rakuten Symphony (acquired Altiostar, August 2021) vRAN (CU, DU) Estimates
Ribbon Communications 2G/3G core Survey data and estimates
Samsung RAN, vRAN, vEPC, 5GC Estimates
Silicom Open RAN (DU) None, supplies other RAN/vRAN vendors
SuperMicro Computer vRAN (DU) None, supplies other RAN/vRAN vendors
Verana Networks RAN/vRAN (RU/mmWave) Estimates
ZTE RAN, vRAN, 2/3G Core, EPC, vEPC, 5GC Survey data and estimates

LightCounting: Will Network Transformation resolve telecom’s paradox?

Posted on by Alan Weissberger
Christel Heydemann, the CEO of Orange, used her MWC ’23 keynote to highlight the paradox of the telecom market: telecom is a critical enabler of our digital future, yet a 2022 PwC report stated that nearly half (46%) of the global telecom CEOs surveyed thought their companies won’t survive another decade (the average figure for all industries surveyed was 39%). PwC cited the reason as telecoms’ poor record making money from technology.
Telecoms is a profitable business, yet competition and regulation are hampering its growth. Telecoms spends eye-watering amounts in investment – European CSPs alone are estimated to have spent $650 billion on technology in the last decade – yet the industry is one of the worse at getting a return on the investment.
Much of the spend has been on implementing the 5G wireless standard. 5G may be much vaunted by the CSPs but its impact is yet to be felt. That is because the wireless standard as envisaged is still to be implemented. What has been rolled out since 2019 is 5G non-standalone (NSA): a 4G networking/ 5G radio hybrid. It is 5G Standalone (5G SA) that delivers the tools other industries can benefit from: low latency wireless networking and clever network segmentation in the form of slicing.
Overall, some 40 CSPs had deployed 5G SA by the start of 2023, a small fraction of overall 5G deployments. Yet if 5G SA is what will grow revenues via the digitalization programs of different sectors, should there not be a greater urgency to deploy it?
The CSPs also must transform their businesses, their organizations, their staff development, address sustainability, and embrace a development that promises huge returns; artificial intelligence (AI).
Telecoms is built on the engineering disciplines of communications and computing and the CSPs have strong engineering teams. How can CSPs, that want to serve other industries in their digital transformation journeys, be so far behind when it comes to AI? Another paradox.

Network transformation’s impact on the future of the CSPs

What will be the impact of network transformation and transformation in general on the future of the CSPs?
In the latest Network Transformation report, LightCounting defines two scenarios that bound the possible outcomes: Scenario 1 is where CSPs become utilities while Scenario 2 sees CSPs transform into Digital Service Providers.
In Scenario 1, dubbed Utilities, the transformation efforts fail to create the revenue growth needed nor enable the CSPs long-term aspirations to become digital service providers. The CSPs continue as businesses but are consigned to the infrastructure provider layer delivering connectivity services, limiting their ability to invest in their networks. They may still be ongoing businesses but will miss the digitalization opportunities thus bounding their business prospects.
Scenario 2, dubbed Digital Service Providers, is that network transformation achieves its goals. Successful network transformation will allow CSPs to play not only as infrastructure/ connectivity players but as platform providers and specialists addressing vertical markets.
LightCounting believes that some CSPs will be successful and become digital service providers. They will be able to acquire their less successful competitors, further improving scale of their business. Large scale will be very critical for the success of CSPs and their ability to compete with ICPs in offering new services.
Anti-monopoly regulators will have to find the right balance to limit the scale of CSPs, while letting them prosper. It is the huge success of ICPs which attracts attention of the regulators now. It is long overdue. Curbing the scale of ICP monopolies will also help CSPs to sustain their business, but they still need to transform themselves. The recent revelation that Amazon wants to bundle a phone service offering as part of Amazon Prime shows how vulnerable the CSPs are.
LightCounting defined this period as pivotal for the CSPs in last year’s network transformation report. One year on, this remains the case although what is at stake is clearer. We see more determination among CSPs to transform into digital service providers of the future. There is no viable alternative.
More information about the report is available at: Network Transformation
References:

LightCounting: Wireless infrastructure market dropped both YoY and sequentially in 1Q23

Posted on by Alan Weissberger

In the  1stQ2023, the global wireless infrastructure market declined 3% YoY and 17% sequentially, according to LightCounting. Starting a new year with a sequential decline is typical but a YoY drop is abnormal and suggests a declining pattern is in the making. This trend confirms that we have entered the post-peak era.

While the U.S. market posted its steepest drop, the strong 5G rollouts in India and a 5G rebound in Japan, along with stable and sustained activity in EMEA and China, respectively, were not enough to keep the wireless infrastructure market out of the decline. On the open vRAN front, DISH in the U.S., Rakuten Mobile in Japan, and a few Rakuten Symphony customers kept the market flat YoY and produced double digit sequential growth.

Despite a weak quarter, Huawei retook its lead at the expense of Ericsson, which reported weak 1Q23 results that led to a market share loss. In the meantime, Nokia benefited from the 2 leaders’ market share loss and gained 1% point. ZTE also gained share at the expense of Huawei and Ericsson while Samsung’s share remained stable.

“We have passed the 5G peak and have entered the second year of a disinvestment cycle. The 5G investment cycle that started in 2019 and ended in 2021 was driven by hundreds of communications service providers (CSPs), including the world’s largest cellular footprints (i.e., China). At the moment, India’s massive 5G rollout is preventing the situation from getting worse but this will end soon,” said Stéphane Téral, Chief Analyst at LightCounting Market Research.

As a result, this year, LightCounting expects the wireless infrastructure market to slightly decline in 2023 (compared to 2022) with India in the lead. In the long run, our service provider 20-year wireless infrastructure footprint pattern analysis points to a 2022-2028 CAGR of -3% characterized by low single-digit declines through 2027, which appears to be the bottom leading to flatness or slight growth in 2028. In fact, we expect 5G to slightly pick up in 2027, driven by upgrades needed to prepare networks for 6G. Given the ongoing 6G activity, we believe something labeled 6G will be deployed in 2028.

………………………………………………………………………………………………………………………………………………………………………
Separately, Stefan Pongratz, Vice President at Dell’Oro Group said, “Not surprisingly, growth is now transitioning away from the advanced markets towards the slower-to-adopt 5G markets. But the speed of this shift was perhaps a bit surprising as the pendulum swung drastically towards the positive in India while the North American RAN market performed much worse than expected.  And from a supplier perspective, vendor rankings were, for the most part, stable in the quarter. Vendor revenue shares, however, were impacted by the vastly different growth trajectories across the suppliers,” continued Pongratz.

Highlights from Dell’Oro’s 1Q 2023 RAN report:

  • Top 5 RAN 1Q 2023 RAN suppliers include Huawei, Ericsson, Nokia, ZTE, and Samsung.
  • Top 4 RAN 1Q 2023 RAN suppliers outside of China include Ericsson, Nokia, Huawei, and Samsung.
  • Nokia recorded the highest growth rate among the top 5 suppliers, while Ericsson and Samsung both lost some ground in the first quarter.
  • The report also shows that Nokia’s RAN revenue share outside of China has been trending upward over the past five quarters.
  • The Asia Pacific RAN market has been revised upward to reflect the higher baseline in India.

Open RAN and vRAN highlights from Dell’Oro’s 1Q 2023 RAN report:

  • After more than doubling in 2022, Open RAN revenue growth was in the 10 to 20 percent range in the first quarter while the vRAN market advanced 20 to 30 percent.
  • Positive developments in the Asia Pacific region were dragged down by more challenging comparisons in the North America region.
  • Short-term projections remain unchanged – Open RAN is still projected to account for 6 to 10 percent of the 2023 RAN market.
  • Top 5 Open RAN suppliers by revenue for the 2Q 2022 to 1Q 2023 period include Samsung, NEC, Fujitsu, Rakuten Symphony, and Mavenir.
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About the LightCounting Report:
Wireless Infrastructure quarterly report analyzes the wireless infrastructure market worldwide and covers 2G, 3G, 4G and 5G radio access network (RAN) and core network nodes. It presents historical data from 2016 to 2022 of quarterly market size and vendor market shares, and a detailed market forecast through 2028 for 2G/3G/4G/5G RAN, including open vRAN, and core networks (EPC, vEPC, and 5GC) for each region (North America, Europe Middle East Africa, Asia Pacific, Caribbean Latin America). The historical data accounts for the sales of more than 30 wireless infrastructure vendors, including vendors that shared confidential sales data with LightCounting. The market forecast is based on a model correlating wireless infrastructure vendor sales with 20 years of service provider network rollout pattern analysis and upgrade and expansion plans.
Historical data accounts for sales of the following vendors:
Vendor Segments Source of Information
Affirmed Networks (acquired by Microsoft, April 2020) vEPC, 5GC Estimates
Altran vRAN Estimates
Altiostar vRAN (CU, DU) Estimates
Amdocs 5GC Estimates
ASOCS vRAN (DU) None, supplies other RAN/vRAN vendors
Baicell RAN (RU) None, supplies other RAN/vRAN vendors
Benetel Open RAN (RU) None, supplies other RAN/vRAN vendors
Cisco EPC, vEPC, 5GC Survey data and estimates
China Information and Communication Technologies Group (CICT) RAN Estimates
Comba Telecom RAN/vRAN (RU) None, supplies other RAN/vRAN vendors
CommScope (acquired Phluido vRAN patents, October 2020) vRAN (RU, DU) Estimates
Corning vRAN Estimates
Dell vRAN (DU) None, supplies other RAN/vRAN vendors
Enea 5GC Estimates
Ericsson RAN, vRAN, 2/3G Core, EPC, vEPC, 5GC Estimates
Fairwaves RAN/vRAN (RU) None, supplies other RAN/vRAN vendors
Fujitsu RAN Survey data and estimates
HPE 2G/3G core, 5GC Estimates
Huawei RAN, vRAN, 2/3G Core, EPC, vEPC, 5GC Survey data and estimates
JMA Wireless vRAN Estimates
KMW RAN/vRAN (RU) None, supplies other RAN/vRAN vendors
Kontron vRAN (DU) None, supplies other RAN/vRAN vendors
Mavenir (acquired ip.access, September 2020) vEPC, vRAN, 5GC Survey data and estimates
Metaswitch (acquired by Microsoft, May 2020) 5GC, vEPC and 2G/3G core Estimates
Movandi RAN/vRAN (RU/repeater) Estimates
MTI Mobile vRAN (RU) None, supplies other RAN/vRAN vendors
Node-H vRAN (small cells) Estimates
Nokia RAN, vRAN, 2/3G Core, EPC, vEPC, 5GC Survey data and estimates
NEC (including Blue Danube) RAN, vRAN (RU), EPC, 5GC Survey data and estimates
Oracle 5GC Estimates
Parallel Wireless vRAN (CU, DU) Estimates
Pivotal RAN/vRAN (RU/mmWave repeater) Estimates
Quanta Cloud Technology (QCT) vRAN (DU) None, supplies other RAN/vRAN vendors
Qucell RAN, vRAN Estimates
Ribbon Communications 2G/3G core Survey data and estimates
Samsung RAN, vRAN, vEPC, 5GC Estimates
Silicom Open RAN (DU) None, supplies other RAN/vRAN vendors
SuperMicro Computer vRAN (DU) None, supplies other RAN/vRAN vendors
Verana Networks RAN/vRAN (RU/mmWave) Estimates
ZTE RAN, vRAN, 2/3G Core, EPC, vEPC, 5GC Survey data and estimates
References:

LightCounting: Sales of Optical Transceivers will decline in 2023

Posted on by Alan Weissberger
The optical communications industry entered 2020 with very strong momentum. Demand for DWDM, Ethernet, and wireless fronthaul connectivity surged at the end of 2019, and major shifts to work-at-home and school-at-home in 2020 and 2021 due to the COVID-19 pandemic created even stronger demand for faster, more ubiquitous, higher reliability networks. While supply chain disruptions continued, the industry was able to largely overcome them, and the market for optical components and modules saw strong growth in 2020-2022, as shown the figure in below.
We believe the optical transceiver market will be down slightly (1% or so) in 2023 due to declines in the sales of Ethernet and wireless fronthaul transceivers of 10% and 30%, respectively, offsetting growth in all other market segments in 2023.
Amazon and other cloud companies plan to moderate their investments in 2023 and beyond, even if there is no economic recession. The Cloud companies benefited from the COVID-19 pandemic, but they were forced to reassess their plans at the end of 2022, as growth slowed. Their capex almost doubled between 2019 and 2022 but future investments will be more conservative. We expect the Top 15 ICP’s capex to be up only 4% in 2023, essentially flat, after several years of double-digit growth. Investments in AI infrastructure will remain a priority.
Telecom service providers plan to reduce their capex in 2023 also but they will continue to upgrade access networks. Connecting business and consumers to the Cloud is a priority now. Their customers are willing to pay more for secure and low-latency broadband services and it is a great opportunity for revenue growth. Telecom service providers plan to digitize their operations and offer Network-as-a-Service (NaaS) to an increasing number of end users, not just a few of their largest customers.
Despite a slower than expected growth in revenues of the leading Cloud companies, AI infrastructure remains a priority. This new focus will sustain the market for high bandwidth and low latency Ethernet and InfiniBand switches in the next 5 years. We also expect the deployments of optical circuit switches in AI clusters to expand beyond Google’s datacenters.
Other notable forecast changes include increased sales of 50G and 100G fronthaul transceivers in the 2026-2028 timeframe, as we believe they will be needed for early 6G deployments, and increased sales of PON optics as deployments of FTTx are increasing due to government stimulus in the US and elsewhere.
LightCounting’s Market Forecast Report presents our forecast for optical transceivers used in the telecom and datacom sectors, and includes chapters reviewing the health and spending outlook for both CSPs and ICPs, as well as explanations of forecast drivers and assumptions for each of the six product segments covered: Ethernet, WDM, Fronthaul, Backhaul, FTTX, and Optical Interconnects. The accompanying Excel database includes unit and sales forecasts for over 200 product categories.
More information on the report is available at ttps://www.lightcounting.com

LightCounting: 1H-2022 Wireless Infrastructure softness lingered in 3Q-2022

Posted on by Alan Weissberger

by Stéphane Téral, Chief Analyst at LightCounting Market Research

3Q22 was almost a carbon copy of 2Q22, which signals that the 5G-driven wireless infrastructure market is reaching its peak as the first wave of 5G rollouts wane.

Global uncertainties, lingering supply chain constraints, and forex headwinds contributed to another soft 3Q22 that followed an already sluggish 1H22. In the meantime, the wireless infrastructure market continued to operate at its equilibrium reached in 2021: the 2 opposite spheres of influence, the East led by China versus the West defined as the U.S. and its allies, are becoming more balanced.

We found that the West accounted for 50.5% of the global wireless infrastructure market while the East made up for the rest, with China accounting for more than 80% of the East.

“Overall, market dynamics continued to operate at equilibrium with the unabated execution of the 5G contracts awarded between 2H20 and 1H21. However, this also means that we are reaching the end of this first 5G wave, which confirms our view that the global wireless infrastructure market is peaking this year,” said Stéphane Téral, Chief Analyst at LightCounting Market Research.
As a result, the global wireless infrastructure market was down 1% sequentially and declined 8% YoY, sustained by 5G RAN, which was the only category that grew sequentially. 5G core ended flat sequentially but up 28% YoY, mainly driven by China. In addition, open RAN sales were weak again because Rakuten Mobile is ahead of its schedule and Dish’s 5G network construction did not offset the delays in the 1&1 network rollout in Germany.
After this year’s peak, our model points to a slow single-digit declining market. This bell-shaped pattern reflects the differences in regional and national agendas, including the COVID-19 impact as well as the impact of “the 2-year step function”—2 years (2019 and 2020) in a row of double-digit growth. The model considers all the 5G 3-year rollout plans we have gathered from many service providers and indicates strong activity through 2022 and 2023.
Historical data accounts for sales of the following vendors:
Vendor Segments Source of Information
Affirmed Networks (acquired by Microsoft, April 2020) vEPC, 5GC Estimates
Altran vRAN Estimates
Altiostar vRAN (CU, DU) Estimates
Amdocs 5GC Estimates
ASOCS vRAN (DU) None, supplies other RAN/vRAN vendors
Baicell RAN (RU) None, supplies other RAN/vRAN vendors
Benetel Open RAN (RU) None, supplies other RAN/vRAN vendors
Cisco EPC, vEPC, 5GC Survey data and estimates
China Information and Communication Technologies Group (CICT) RAN Estimates
Comba Telecom RAN/vRAN (RU) None, supplies other RAN/vRAN vendors
CommScope (acquired Phluido vRAN patents, October 2020) vRAN (RU, DU) Estimates
Corning vRAN Estimates
Dell vRAN (DU) None, supplies other RAN/vRAN vendors
Enea 5GC Estimates
Ericsson RAN, vRAN, 2/3G Core, EPC, vEPC, 5GC Estimates
Fairwaves RAN/vRAN (RU) None, supplies other RAN/vRAN vendors
Fujitsu RAN Survey data and estimates
HPE 2G/3G core, 5GC Estimates
Huawei RAN, vRAN, 2/3G Core, EPC, vEPC, 5GC Survey data and estimates
JMA Wireless vRAN Estimates
KMW RAN/vRAN (RU) None, supplies other RAN/vRAN vendors
Kontron vRAN (DU) None, supplies other RAN/vRAN vendors
Mavenir (acquired ip.access, September 2020) vEPC, vRAN, 5GC Survey data and estimates
Metaswitch (acquired by Microsoft, May 2020) 5GC, vEPC and 2G/3G core Estimates
Movandi RAN/vRAN (RU/repeater) Estimates
MTI Mobile vRAN (RU) None, supplies other RAN/vRAN vendors
Node-H vRAN (small cells) Estimates
Nokia RAN, vRAN, 2/3G Core, EPC, vEPC, 5GC Survey data and estimates
NEC (including Blue Danube) RAN, vRAN (RU), EPC, 5GC Survey data and estimates
Oracle 5GC Estimates
Parallel Wireless vRAN (CU, DU) Estimates
Pivotal RAN/vRAN (RU/mmWave repeater) Estimates
Quanta Cloud Technology (QCT) vRAN (DU) None, supplies other RAN/vRAN vendors
Qucell RAN, vRAN Estimates
Ribbon Communications 2G/3G core Survey data and estimates
Samsung RAN, vRAN, vEPC, 5GC Estimates
Silicom Open RAN (DU) None, supplies other RAN/vRAN vendors
SuperMicro Computer vRAN (DU) None, supplies other RAN/vRAN vendors
Verana Networks RAN/vRAN (RU/mmWave) Estimates
ZTE RAN, vRAN, 2/3G Core, EPC, vEPC, 5GC Survey data and estimates

References:

https://www.lightcounting.com/report/december-2022-wireless-infrastructure-3q22-177

LightCounting: Wireless Infrastructure Market to Grow at 5% in 2021; 8% in 2Q-2021

Posted on by Alan Weissberger

LightCounting says the 2nd quarter of 2021 was robust for the wireless infrastructure market, as a second quarter typically is, but below 2Q20 that was revved up by China’s 5G catch-up after a massive COVID-19 lockdown. The 5G rollout momentum seen in North America, and Northeast Asia reported in 2H-2020 and 1Q-2021 continued in 2Q-2021 and was augmented by strong activity in Europe, and 4G expansion in India.

As a result, the global wireless infrastructure market grew sequentially, driven by RAN, open vRAN—again mostly fueled by Rakuten Mobile’s 5G network buildout, and 5G and 4G core network elements.

“2Q21 was somewhat reminiscent of the golden GSM era and I could not find anyone malcontent as sales of all 4G and 5G network nodes performed magnificently. Regarding the vendors’ market shares, the gradual rise of Ericsson and Nokia was most immediately induced by the fall of Huawei.” said Stéphane Téral, Chief Analyst at LightCounting Market Research.

LightCounting once again had to increase their North American forecast to reflect a strong start in C-band activity and Ericsson’s 5-year $8B 5G contract with Verizon and decrease their Asia Pacific’s 5G forecast due to uncertainties in China and India. As a result, the global wireless infrastructure market’s growth stayed intact at 5% over 2020.

In the long run, factoring in the strong North American 5G activity which is expected to last until 2025 our model’s market peak has moved by a year to 2023. Our service-provider 20-year wireless infrastructure footprint pattern analysis points to a 2020-2026 CAGR of 1% characterized by low single-digit growth through 2023, followed by a 1% decline in 2024, flatness in 2025, and a 4% drop in 2026. This lumpy pattern reflects the differences in regional and national agendas.

About the report:

2Q21 Wireless Infrastructure Market Size, Share, and Forecast report analyzes the wireless infrastructure market worldwide and covers 2G, 3G, 4G and 5G radio access network (RAN) and core network nodes. It presents historical data from 2016 to 2020, quarterly market size and vendor market shares, and a detailed market forecast through 2026 for 2G/3G/4G/5G RAN, including open vRAN, and core networks (EPC, vEPC, and 5GC), in over 10 product categories for each region (North America, Europe, Middle East Africa, Asia Pacific, Caribbean Latin America). The historical data accounts for the sales of more than 30 wireless infrastructure vendors, including vendors that shared confidential sales data with LightCounting. The market forecast is based on a model correlating wireless infrastructure vendor sales with 20 years of service provider network rollout pattern analysis and upgrade and expansion plans.

More information on the report is available at:

https://www.lightcounting.com/report/august-2021-wireless-infrastructure-2q21-116

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