LightCounting: Optical transceivers set sales record in Q3 2010/Solarflare unveils SFP+ optical transceiver module

DECEMBER 13, 2010 — Market research firm LightCounting says that global sales of optical transceivers reached $670 million in Q3 2010, exceeding the previous record set in Q2 2008 before the latest economic slowdown. The growth was driven by sales of 10 Gigabit Ethernet SFP+ and DWDM modules, including 40-Gbps devices. Strong sales of FTTx transceivers and optical interconnects also contributed to the strong quarter.

LightCounting says recovery in the datacom market started in second half of 2009 with sales of Ethernet and Fibre Channel transceivers increasing rapidly, at 10% to 30% per quarter. Growth in sales of these products slowed in Q2 2010 but gained momentum in the latest quarter. New products such as 10 Gigabit Ethernet and 8-Gbps SFP+ transceivers accounted for most of the growth, while sales of many legacy products fell sharply.

Growth in sales of SONET/SDH and DWDM modules was more modest in the early stages of the recovery, but gained strength in Q3 2010. The DWDM market segment posted 28% growth, driven by rapidly increasing sales of fixed wavelength and tunable 10-Gbps XFP transceivers and 40-Gbps DWDM modules, LightCounting added.

LightCounting says the accelerating recovery in the telecom transceiver market is in line with its latest forecast report, released this past September. Sales of components, such as ROADMs and pump lasers, used in the initial stages of network installations were increasing quickly in the first half of the year, and LightCounting expected sales of interface modules to pick up as network upgrades progress to installing line cards. This is clearly happening now, the market research firm asserts.

On the other hand, leading suppliers of pump laser modules used in optical amplifiers reported slower sales in Q3 2010 and gave negative guidance for the current quarter. LightCounting attributes this slowdown at least in part to inventory management by customers, but adds that it may also signal uncertainty regarding the scope of network upgrades planned for 2011. On a more optimistic note, sales of ROADMs, which declined in Q2 2010, recovered in Q3 2010 and are expected to remain strong in the current quarter.

High-speed optical transceiver sales
Sales of GPON modules were leading the FTTx market growth in early 2010, but EPON sales started picking up as well later in the year. First shipments of 10G-EPON modules were also reported by several suppliers. The 10G modules are priced a factor 20 higher than lower data rate modules used in FTTx applications. While the pricing is likely to decline as volumes of 10G-PON become substantial, this clearly presents a very attractive opportunity for suppliers of FTTx modules.

First sales of 10-km 100-Gigabit Ethernet transceivers were also reported by several suppliers, LightCounting reports. Initial pricing for low-volume shipments of this product is 100X higher than pricing of 10-Gigabit Ethernet transceivers, LightCounting says, reflecting significant increase in complexity. Google has been a vocal opponent of IEEE approved designs for 100-Gbps 10-km interfaces (see “”) and the current pricing explains why, in LightCounting’s opinion.

Profitability of many optical component and module vendors reached the highest level since the telecom bubble burst in 2001, as suppliers increased capacity utilization and took advantages of economies of scale. More consolidated industry landscape contributed to improved financial performance of leading suppliers.

DECEMBER 14, 2010 — Solarflare has extended its family of SFN5000 10GbE server adapters with the launch of a new SFP+ 10GBase-SR optical transceiver module. The Solarflare SFM10G-SR 850-m multimode SFP+ optical transceiver is designed to support multiple types of optical fiber, including OM1, OM2, and OM3 multimode fiber, with standard LC connectors. It can drive OM3 fiber up to 300 m to support cluster, data center and enterprise networking applications.

Solarflare, which has been one of the leading purveyors of 10GBase-T technology, says it broadened its portfolio to include SFP+ optical modules in response to customer requests to support a complete enterprise networking offering, including the physical interconnection. The company’s new SFP+ transceiver module is tested and compatible with all of Solarflare’s single-port and dual-port SFP+ 10-Gigabit Ethernet server adapters in both enterprise and mid-range products.

“This product introduction streamlines our customer’s purchasing process by enabling them to buy optical transceivers at the same time as our server adapters from the same source,” says Mike Smith, vice president and general manager of host solutions at Solarflare. “The addition of Solarflare’s SFM10G-SR not only allows us to improve this customer experience, but also adds value to our reseller providers, simplifying their selling and fulfillment activities.”

The SFM10G-SR 10GBase-SR multimode SFP+ optical transceiver module is now available for US list price of $307.