Optical Access Market Expected to Decline by 20% In 2023

The optical access market is expected to decline by 20% in 2023, but the CAGR over the next five years will reach 9%

Without a doubt, 2023 is expected to be a challenging year for preform and FTTx transceiver and optical component suppliers. LightCounting currently anticipates a 10% decrease in total shipments and nearly a 20% decline in revenue compared to 2022. This is primarily attributed to excess inventory beyond the normal cyclical deployments of RAN (Radio Access Network) and FTTx.

However, the outlook changes over the next five years. LightCounting forecasts a Compound Annual Growth Rate (CAGR) of 9% in the market by 2028. The sales growth will be led by next-generation products in both wired and wireless access. In the FTTx domain, the deployment of 25G PON and 50G PON is expected to rise from 2025 onward, offsetting the decline in sales of 10G PON. On the wireless front, the forward upgrade of advanced 5G and 6G networks utilizing 50G and 100G components is also expected to commence in 2025-2026.

Although industry participants have dedicated so much time and effort to advancing new PON (Passive Optical Network) and forward standards, it's easy for everyone to overlook the ongoing development of alternative technologies for broadband access. Deployment of DOCSIS 4.0 has already commenced, enabling cable TV operators to offer multi-gigabit services through Hybrid Fiber Coaxial (HFC) networks. Billions of dollars have been invested in Low Earth Orbit (LEO) satellite networks, some of which are already carrying real-time traffic. Apple has launched the first commercial application of 5G-NTN (Non-Terrestrial Network), and there are over 5 million fixed wireless access (FWA) users on 5G in the United States, a number that is rapidly growing.