Integrated Optics: $2.6 Billion by 2005?

The market for integrated optical components is going to chug along for the next couple of years and then take off in a big way, reaching $2.6 billion by 2005, according to a new report from Communications Industry Researchers Inc. (CIR).

Why the sudden leap into life? CIR gives two reasons.

First, by far the biggest market for optical components is likely to be generated by access and metro equipment, where the priorities are low cost and small size. That’s exactly what integrated optics promises to deliver.

Second, the definition of integrated optics is loosening, according to CIR. It now includes not just “monolithic” integration, where multiple devices are implemented on a single piece of substrate, but also “hybrid” integration, where devices implemented in different materials are bonded together in a single package.

Although the market for such components isn’t going to take off for a couple of years, the report indicates that early entrants will have a considerable advantage. That’s partly because yields are very low right now, and improving them will take a lot of work. It’s also because component manufacturers need to start working with system vendors now in order to cash in on the big orders that might follow once their gear has successfully completed 12 to 18 months of carrier trials.

CIR reckons transmitters and transceivers will account for more than 60 percent of the market for integrated optical components by 2005. After that will come monitors (5.7 percent), amplifiers (4.9 percent), and passive DWDM products (3.9 percent).

Table 1: Market for Integrated Optical Components ($ Millions)
  2001 2005
Transmitters and Transceivers 5.4 1617.8
Passive DWDM Products 0.8 102.9
Switches 0.8 77.2
Amplifiers 3.5 128.6
Monitors 1.2 150
Backplane Applications 1 50
Other 0.7 498.8
Total 13.4 2625.3
Source: Communications Industry Researchers Inc.

— Peter Heywood, Founding Editor, Light Reading
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