Worldwide spending on optical transport hardware declined by 2% YoY during 2Q23, according to the most recent preliminary Transport Hardware Report from research firm Cignal AI.
“The optical market is clearly showing signs of weakness, India is the only bright spot.” said Kyle Hollasch, Lead Analyst for Transport Hardware at Cignal AI. “Large network operators are absorbing inventory accumulated during the supply chain uncertainties of 2022, and hyperscalers are reverting to just-in-time ordering as lead times come down.”
Additional 2Q23 Transport Hardware Report Findings:
- Optical sales to Service Providers and Cloud & Colo operators fell -2% and -3%, respectively.
- The worldwide routing market grew 16% during its seventh straight quarter of growth. This growth came despite sharp spending pullbacks in western 5G networks.
- North American 2Q23 optical revenue flattened following 18 months of rapid growth. Ciena and Infinera grew revenue, lifted by strong sales to hyperscalers and shipments against their large backlogs.
- EMEA’s optical sales were flat, but routing sales leaped 27% led by Huawei and Nokia. Huawei’s optical revenue declined for the fourth straight quarter, while Nokia’s has grown for the last three.
- RoAPAC spending surged on as Indian operators continued to build, with Nokia and Ciena benefitting most.