Asia-Pacific leads optical components market

MELBOURNE, AUSTRALIA: Optical components globally (OC) grew 9 percent sequentially to $1.2 billion in 1Q10, and could have posted roughly another 7 percent, but was limited by supply constraints. Ovum’s preliminary results show the OC global market to have grown 25 percent versus the year-ago period.

Supply constraint is the biggest problem plaguing suppliers. The market outlook is positive, with vendors estimating a 4–10 percent sequential quarterly growth. The market is on track for double digit annual growth, a strong rebound from the annual double digit decline in 2009.

For the first time, we have included regional estimates in our market share reporting – Asia-Pacific is the strongest region with 48 percent of global rolling 4Q revenues, in part due to contract manufacturers in the region. Fig. 1 shows the optical components market share by region.Fig. 1: Optical components market share by region. Source: Ovum.

Among the top 10 vendors, the gold star goes to Finisar who holds a market leading share of 14.3 percent. It posted a whopping 75 percent YoY growth and extended its market share 111 basis points on a rolling four-quarter basis. The second vendor is Sumitomo holding a market share of 10.8 percent and third is Avago Tech with a market share of 8.6 percent.

“This feast after famine situation for OC vendors is symptomatic of suppliers near the bottom of the food chain,” said Daryl Inniss, Vice President and Practice Leader, Components, at Ovum.

“Within 12 months suppliers are challenged to quickly change strategies from cost and capacity cutting to survive the macroeconomic downturn to capacity constraints and accurately determine if the current demand is simply a replenishing exercise that lasts a few quarters, or a new build cycle that can be a multiyear process and may require capital investment for expansion.”