Transceiver vendors seeking new opportunities as China PON deployment peaks

Time:2024/10/12 10:05:15

Ovum estimates that China’s huge passive optical network (PON) buildout peaked in 2012; while the total PON transceiver market posted 2012 revenues around $0.8bn, it will decline going forward. There are no other economies as large as China to support the volumes experienced during the buildout, so vendors that supplied deployments in China are seeking new opportunities. This includes Accelink and Hisense, two of China’s leading transceiver vendors.

The China PON buildout delivered a significant single-mode laser accomplishment that prepares the vendors to attack other markets: It drove the annual volume of single-mode lasers above multimode volume and it brought the price of single-mode transceivers below that of multimode transceivers. A robust ecosystem developed to support the deployment of tens of millions of single-mode transceivers annually, while the suppliers delivered double-digit annual price reductions on ONT/ONU transceivers.

The results are surprising because they are counter to industry conventional wisdom. It is well accepted that the highest volume and the cheapest optical communication transceivers are multimode. They are primarily used in data centers to connect switches, servers, and storage devices. Their low cost is a consequence of the high volumes and a mature supply chain. Thanks to PON, there are now equivalent single-mode transceiver suppliers.