SOURCE: LightCounting

LightCounting

May 25, 2016 09:00 ET

Profitability of Optical Communications Component Businesses May Set a New Record in 2016

EUGENE, OR--(Marketwired - May 25, 2016) - LightCounting has released a report titled, "State of the Optical Communications Industry". It offers analysis of profitability across the industry supply chain including service providers, cloud companies, equipment and component suppliers.

The average profitability of optical component and module suppliers was very close to zero over the last 5 years -- the lowest by far, compared to every other level of the supply chain.

Financial reports of suppliers started to show signs of improvement over the last 2-3 quarters. The average profitability of optical component and module vendors was 2% in 2015, compared to a loss of 1% in 2014. There is a good chance for reaching 5-7% profitability in 2016-2017 and setting a new record.

The report reviews strategies for sustainable profitability, including development of new manufacturing technologies.

"Many start-up companies, betting their future on supplying high-speed optics to cloud vendors, develop products based on silicon photonics," commented Dr. Vladimir G. Kozlov, Founder and CEO of LightCounting Market Research. "High-valued acquisitions of silicon photonics companies and the recent IPO of Acacia offered much needed success stories for investors. However, the risk remains high. Many other vendors, just starting to ship silicon photonics based products now, will have to prove themselves in 2016-2018."

For more information on this report, please click here

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