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Optical transport market declined 6 percent in 3Q 2022

According to a recently published report from Dell’Oro Group, the trusted source for market information about the telecommunications, security, networks, and data center industries, Optical Transport equipment revenue declined 6 percent year-over-year in the third quarter of 2022. Supply of components continued to weigh down the growth potential of the optical equipment market.

“The main culprit for this market revenue decline was the lack of component supply needed to make finished goods,” said Jimmy Yu, Vice President at Dell’Oro Group. “Optical vendors have a growing amount of backlog due to higher demand for DWDM equipment but are not able to deliver completed systems when they are short on one component or two. Another factor lowering the market revenue is the strengthening US dollar. Since the market revenue is based on US dollars, most sales in Europe and Asia are converted to fewer US dollars and reducing the reported market size,” added Yu.

Additional highlights from the 3Q 2022 Optical Transport Quarterly Report:

  • The total WDM equipment market, comprising Long Haul and Metro systems, declined 5 percent year-over-year in the quarter.
  • However, we estimate that on a constant currency basis, the market revenue grew 0 to 1 percent in the same time period.
  • Among the regions in the report, North America remained slightly positive while Europe declined at the highest rate. Revenue from the European region declined due to a couple factors: 1) the lower conversion of euro currency to US dollar and 2) the declining demand caused by the Russia-Ukraine war.

CT Bureau

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