INDUSTRY NEWS
AI race begins to impact on optics suppliers
to more business from Nvidia, but the company has not disclosed any of the details yet. Fabrinet (Nvidia’s contract manufacturer) reported 20% growth in datacom revenues, driven primarily by “800G AI programs”, but the company noted that “the rate of sequential growth has begun to moderate”. Fabrinet’s guidance for Q1 2024 is almost flat. LightCounting says all these data points confirm the trend observed in the past: Nvidia manufactures most of the optics internally (at Fabrinet) for the first year of deployments but allocates
According to a research note on the early financial results for Q4 2023 from LightCounting, demand for 4x100G and 8x100G transceivers from Nvidia made its first significant impact on the revenues of two transceiver suppliers in Q4 2023. Coherent reported more than US$100 million in revenues from sales of 800G transceivers – up 100% sequentially and the company expects further growth in 2024. Innolight reported more than US$505 million in Q4 revenue – up 30% y-o-y and 20% sequentially. Most of this growth must be also related
(11%). Q4 2023 spending growth was either “way up” or “way down”. Alphabet reported record high capex and both Alphabet and Microsoft reported spending increases of 45-55%. In stark contrast, Amazon, Apple, and Meta reported spending declines of 12%, 37%, and 15% respectively, but all of them spent more in the last two quarters sequentially. LightCounting concludes that the market momentum is positive as we enter 2024 – a huge change from 12 months ago. AI is the hottest area now, but it expects a recovery in the broader market to start in Q2 2024.
the bulk of the volume to Coherent and Innolight after that. This is exactly what is happening now with 4x100G and 8x100G transceivers. Both Coherent and Innolight have extensive manufacturing capacities to support a sharp ramp in production during 2024. Revenue growth picked up in the third quarter and again in the fourth quarter, with Alphabet, Amazon, Meta, and Microsoft all reporting double-digit year-over-year growth and new record highs. Apple sales improved slightly compared to Q4 2022 (up 2%), although its Services business grew faster
EXA plans hybrid trans-Atlantic route
XGS-PON to fuel new spending cycle beginning 2025
London-based infrastructure company EXA, is planning to introduce a new hybrid microwave-fibre route between New York and London, adding to its ultra- low latency transatlantic connectivity. EXA already owns and operates the lowest latency transatlantic cable, EXA Express, and the company says this additional technology enhancement is crucial in applications like financial trading, where minimal delays are imperative for maintaining a competitive edge. “The demand for accelerated connectivity between leading financial exchanges remains unabated,” said Nicholas Collins, EXA’s chief commercial officer. “We are proud to offer the fastest transatlantic fibre routes for financial exchanges between the US and the UK and will continue to listen to our customers when making strategic investments in our network to deliver additional
value that supports their growth. Market leading
latencies for trade execution means greater financial returns for our customers.” Ciaran Delaney, EXA’s chief operating officer, added, “The hybrid microwave-fibre route will see microwave technology introduced between Slough- LD4 and EXA’s Cable Landing Station in Cork, Ireland. The network build is a testament to our commitment to enhancing routes and adopting cutting- edge technologies to consistently achieve industry- leading low latencies and maximise availability.” The announcement follows a number of recent steps by EXA to expand its transatlantic offerings for customers. The addition of Dunant, Havfrue and Amitie subsea cables to its portfolio now provides customers with six separate transatlantic routes and multiple landing points between North America and Europe.
According to a new report by Dell’Oro Group, the sales of Broadband Access Equipment are expected to decline by 1% from 2023, with the first half of 2024 seeing continued weakness followed by an improved spending environment in the second half of the year. Ongoing subsidisation efforts, the shift from copper to fibre, and the rollout of cable distributed access architectures will all propel the Broadband Equipment market from 2025 on. The Broadband Access & Home Networking 5-Year January 2024 Forecast Report says that PON equipment revenue is expected to grow from US$10.8 B in 2023 to US$11.8 B in 2028, driven largely by XGS-PON deployments
in North America, EMEA, and CALA and early 50 Gbps deployments in China. Revenue for Cable Distributed Access Equipment (Virtual CCAP, Remote PHY Devices, Remote MACPHY Devices, and Remote OLTs) is expected to reach US$1.3 B by 2028, as operators continue their DOCSIS 4.0 and early fibre deployments. Revenue for Fixed Wireless CPE is expected to reach US$2.5 B by 2028, led by shipments of 5G sub-6GHz and a growing number of 5G Millimetre Wave units. Additionally, revenue for Wi- Fi 7 residential routers and broadband CPE with WLAN will reach US$9.3B by 2028, as the technology is rapidly adopted by consumers and service providers alike.
4
| ISSUE 36 | Q1 2024
www.opticalconnectionsnews.com
Made with FlippingBook flipbook maker