January 2007 Transceiver Forecast Report

SUMMARY

Sales of optical transceivers exceeded $1.7 billion in 2006, growing at an annual rate of 17 percent. The global market for optical transceivers is expected to reach $2.8 billion in 2010, growing steadily at 12 percent CAGR. This growth is being driven by the wide adoption of high speed 10Gbps interfaces in telecom and enterprise networks as well as by deployments of FTTx systems.

This report presents historical sales data from 2005 and 2006, and a detailed forecast through 2010 for SONET/SDH, Ethernet, Fibre Channel, CWDM, DWDM and FTTx transceivers, as well as parallel optical modules. These technologies are split into 86 product categories. Transceiver sales data for 2005/2006 accounts for sales by 27 transceiver vendors, including 20 vendors that shared confidential sales data with LightCounting. The LightCounting market forecast for 2007 through 2010 is based on a model correlating transceiver sales with network traffic growth and projected deployments of FTTx systems.

Executive Summary

The transceiver market has now shown three years of steady growth, which is likely to extend to 2010 and beyond. Sales of transceivers increased by 17 percent in 2006, to exceed $1.7 billion.

Market growth was driven primarily by sales of the following product categories:

• 4Gbps Fibre Channel modules for storage networks
• 1 0Gbps, including Ethernet, SONET/SDH, and DWDM modules for enterprise and telecom applications
• Transceiver modules for fiber-to-the-x (FTTx) networks

Sales of FTTx modules as well as 10Gbps Ethernet, SONET/SDH, and DWDM transceivers will continue to drive growth, but sales of 4Gbps Fibre Channel modules will be less influential in overall market impact from now until 2010.

TABLE OF CONTENTS

• Section 1: SONET/SDH Transceiver Market
• Section 2: Ethernet and Fibre Channel Transceiver Market
• Section 3: CWDM and DWDM Transceiver Market
• Section 4: FTTx Transceiver Market
• Section 5: Market for Parallel Optical Modules
• Section 6: Forecast Methodology

FIGURE

• Figure 8: List of Transceiver Vendors Included in this Report

APPENDIX

• Appendix A: Historical Data and Forecast for Sales of SONET/SDH Transceivers
• Appendix B: Historical Data and Forecast for Sales of Ethernet and Fibre Channel Transceivers
• Appendix C: Historical Data and Forecast for CWDM and DWDM Transceiver Sales
• Appendix D: Historical Data and Forecast for FTTx Transceiver Sales
• Appendix E: Historical Data and Forecast for Sales of Parallel Optical Modules