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Chinese optical market slows down in second half of 2016

December 19, 2016

China announced on Sunday the launch of a new-generation weather satellite.

The extremely high growth rates seen in the Chinese optical market in the first half of 2016 have moderated in the second half of the year, according to a new analysis.

IHS Markit's latest report on the global market for optical network hardware says that the optical gear spending spree seen in China in the first half of the year began to slow down in the third quarter, with optical spending in the country down more than 19% sequentially.

Heidi Adams, senior research director of transport networks at IHS Markit, noted that the high growth rates experienced in the first and second quarters could not be sustained over the longer term. However, spending still increased by more than 14% year-over-year, as 100G infrastructure investment led by China Mobile continued.

Worldwide, the optical equipment market generated $3.2bn in the third quarter, up 7% compared with the same period last year but down 9% from the previous quarter. IHS Markit found that the continued investment in China, albeit at lower levels, boosted the global market.

The sequential decline resulted from the dip in Asia Pacific investment from the highs of the second quarter, as well as the typical seasonal slowdown in Europe, the Middle East and Africa (EMEA) and in the Caribbean and Latin America (CALA).

Looking at market share in the third quarter, IHS Markit said that Chinese networking and telecoms equipment maker Huawei continued to lead by a wide margin, supported by strong spending on 100G projects in China in addition to strength in EMEA and CALA.

U.S.-based Ciena was in second place and Finnish company Nokia edged out China's ZTE to regain third place overall.

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