China’s well-known optical telecommunications market research institute “Chord Industry Research Center (C&C)” today released the 2016 Annual Research Report on China’s optical telecommunications market. The report says the global optical device market grew by 28.15% to $10 billion in 2016. China’s optical device market is about 4.23 billion US dollars, accounting for 42% of the global market.

The report is published in English and Chinese. A total of 64 pages, including 36 charts and 11 tables. The report also analyses the performance of 18 mainstream optical device companies in 2016.

Main points of view:

In 2016, the total expenditure of the three major operators in China exceeded expectations. The total expenditure of the three operators was 358.2 billion yuan, reaching 430 billion yuan, 20% higher than expected. Capital spending is likely to shrink in 2017.

In 2016, the global optical device market grew by 28.15%, reaching 66.8 billion yuan ($10 billion).

In 2016, the optical module market grew well, with an expected growth rate of about 20%. The business cycle is expected to remain the same in 2017.

The data center optical module market grew by 31.22% in 2016. In 2016, 81% of the shipments of 100G modules came from 100G QSFP28 SR4 products interconnected within the data center.

In 2016, the market demand for optical devices in China was 28.1 billion yuan, and the market size of optical modules in China was about 18.3 billion yuan. China’s optical module market is still dominated by 10G optical module demand, accounting for about 69% of the market share. The demand for 100G optical modules is about 1.28 billion yuan. The market has great potential for growth in 2017.

Tang Rui, senior market analyst at the Harmonic Industry Research Center, said: “Future growth in the optical communications market will mainly come from the evolution of three major operators to WAN 100G. The new ROADM CD/CDC network architecture will have the opportunity to increase shipments in 2017, which will lead to an increase in the shipments of wavelength-adjustable transceiver modules. In addition, data center interconnection will continue to grow steadily next year, but prices will still decline. Overall, there are more to look forward to in 2017, such as the mass production of 100G module by China optical module manufacturer in 2017; whether China’s data center market will usher in an explosive period depends on the network architecture of BAT in 2017, and 10G PON will usher in the best period.

Overall, the construction of LTE by the three major operators has led to a huge demand for fiber optic cables and optical devices, and upgraded inverted fixed network. This year, the construction of transmission network and backbone network has maintained a good growth rate. With China Mobile’s strong investment in fixed-line business this year and the broadcasting network’s license to operate the telecommunications network, new growth points have emerged in the market. Demand for long-distance modules is growing strongly, especially for long-distance 10G transmission module.

The demand for optical modules in the telecommunication market has increased steadily: by the end of 2016, the scale of LTE base stations in China will reach 3.12 million and 720,000 in 2016, bringing the demand for tens of millions of 6G/10G modules, an increase of 14% over 2015.

Access network market, GPON market performance is relatively stable this year, the domestic demand for GPON is expected to be equal to last year. In the second quarter, 10G PON finally saw a larger scale, especially OLT increment than expected. Based on the data before 2016, the chord Industry Research Center predicts that the domestic demand for 10G PON modules will reach 900,000 in 2016.

Data center field: Data center optical module is currently dominated by 10G, the proportion of 40G/100G will increase rapidly in the future, and the high-speed optical module industry is expected to usher in the opportunity of Price-volume rise. Since the domestic data center market is still dominated by 10G deployment and 40G deployment, BAT expects to introduce 40G optical modules on a large scale in 2017.

The report also covers the performance and future growth of PLC shunts, WDM devices, optical fiber connections and sockets, MPO connectors and MT sockets in the past year.