Abstract: According to the latest quarterly reports of semiconductor suppliers, optical component suppliers, and cloud computing companies, the Optics market gets a good start in 2021. Driven by the robust demand from cloud computing companies such as Amazon, the optical transceiver market, especially the 400G transceiver market is expected to grow in 2021.
The latest reports from II-VI and Lumentum pointed out that demand for optical components in the telecommunications and data communications markets remains strong, which can be proved by the new sales records of a few semi-conductor suppliers including AMD, Inphi, Maxim, and MaxLinear in the fourth quarter, 2020. Intel’s fourth-quarter sales revenue was very close to the record set in the fourth quarter of 2019.
But due to continued weakness in cloud computing, enterprise, and government businesses, the company’s data center revenue fell by 16% year-on-year. By contrast, AMD’s server processor sales revenue from cloud and enterprise customers set a record, with total revenue increasing by 52% year-on-year to $3.24 billion.
The record above is not the only proof of the robust demand for optical transceivers from the cloud computing company (also known as ICP). Chip manufacturer Innovium announced that it had shipped more than 1 million 400G TERALYNX® switching ASIC ports in 2020. The 12.8Tbps TERALYNX 7 ASIC equipped with 256 50Gbps SerDes can be used for 32 400Gbps connections, and most ports are used in combination with 400G optics. The company reported that the optical transceiver market continued to grow in the fourth quarter of 2020, which means that shipments of 400G QSFP-DD Ethernet optical transceivers will climb in the first quarter of 2021. The demand for switching ASIC chips usually precedes Optics, so the former is a good indicator for the Optics market.
400G QSFP-DD DR4 Fiber Transceiver Module
By the end of 2020, Amazon had identified several new suppliers of 400G transceivers. And all of them had seen an increase in the sales of related products.II-VI, one of the first suppliers to report an increase in related demand, stated that the shipments of 200G and 400G QSFP-DD products have risen double quarter-on-quarter driven by the growing demand from Hyperscale customers in the United States and China. And these statistics had been released in the company’s quarterly performance report by the end of 2020.
However, there is bad news and good news for such a situation. The bad news is that the more suppliers there are, the lower the 400G QSFP-DD optical transceiver price will be. The good news is that demand may be higher than expected.
The ICP set a new revenue record in Q4,2020, but the expenditure was not the case. As far as capital expenditure is concerned, Alibaba, Google, Amazon, Facebook, and Microsoft are the world’s top five cloud computing companies, accounting for 85-90% of the top 15 cloud computing companies tracked by LC. These five companies all achieved record-high revenues in the fourth quarter of 2020. This is because consumers have preferred more goods and services online to various physical stores due to the impact of the Covid-19, which indicated that the pandemic has greatly accelerated the individuals, schools, and enterprises transition to cloud computing.
Top 5 ICP revenue and spending growth rates for Q4 2020
Fiber Mall’s 400G QSFP-DD DR4, FR4, LR4, and SR8 optical modules, 400G QSFP-DD DAC, 400G QSFP-DD AOC have passed the test of operating temperature, electromagnetic shielding (EMI), stability, and transmission signal by major communication equipment manufacturers. All Fiber Mall’s 400G QSFP-DD series products have been widely used in the data centers of major cloud computing companies. For more, please contact us or visit our website.