LC raised the global access network optical market forecast, China will continue to dominate the market

A few days ago, LightCounting (LC) released the latest access optics report. LightCounting estimates that the global access optics market will reach 127 million units in shipments and $1.77 billion in revenue in 2022. Among them, FTTx equipment will account for about three-quarters of shipments and 49% of total revenue. Fronthaul transceivers accounted for 22% of shipments and 40% of total revenue.

LC’s forecast for shipments of access optical devices shows that PON and fronthaul gray optical devices are the largest and second largest market segments respectively, with similar weights. LC expects global annual shipments of access optical equipment to grow from 127 million units in 2022 to over 140 million units by the end of the forecast period.

By 2027, the annual revenue of global access optics is expected to reach 1.4-1.6 billion US dollars. During the forecast period, the market will experience several years of decline before returning to growth in 2025-2027. The wireless and FTTx markets are cyclical, driven by waves of successive technology deployments, and LC expects 6G wireless and 25G/50G PON to begin deployment in the last few years of the forecast period.

Although 25G and 50G PON will appear later in the forecast, most of the revenue in this market in the next five years will come from the 10G-PON combination (including XG-PON2, XGS-PON and 10G-EPON).

China continues to play a leading role in the global access market

China has the world’s largest population, most of which live in urban environments, and the central government is willing to spend money on Internet access infrastructure, while other populous countries rely heavily on market forces to steer fixed and mobile broadband investment. As a result, China has been and will continue to be the largest single country market over the next five years in terms of consumption of wireless and fixed access optics.

Figure 2 shows that by 2027, China’s share of global wireless and FTTx optical product consumption will remain above 50%, and China will remain by far the largest single country market.

Alternative Access Technology and ODN

Today, broadband access is achieved through copper, coaxial cable, cellular radio and optical technologies, but there are several alternatives that can replace existing networks and operators, including LMDS and mmWave, geosynchronous satellites, medium earth orbit satellites (MEOS), Low Earth Orbit Satellites (LEOS), Stratospheric Airborne Platforms, and Low Altitude Airborne Platforms (UAVs). In its report, LC examines all of these and assesses their impact on the existing access market over the next five years.

This edition of the LC report includes for the first time optical distribution networks (ODNs), especially passive optics in PON networks that provide connections between OLTs and ONUs. Although often overlooked or considered simplistic and low-value, the development of ODNs has actually gone through several stages or generations, with the current generation incorporating not only some creative optical enhancements, but also the introduction of digital and artificial Smart to reduce the cost of installing, monitoring and maintaining critical networks.

Major changes in the latest forecast

LC currently expects cumulative global sales of access optics to be $7.85 billion over the next five years, an increase of approximately 11% from the forecast released in April 2022. Changes to revenue forecasts since April 2022 include forecast growth in 25G and 50G PON, partially offset by lower shipments of XGS-PON, and due to increased demand for packet fronthaul and a mix between gray light and WDM optics The income of gray light fronthaul optics increased. In the latest forecast, the total revenue of WDM fronthaul products is slightly lower than the forecast in April.