According to the latest transmission hardware report of research company Cignal AI, in the second quarter of 2021, global network transmission equipment spending dropped by 5%. Due to the cyclical COVID-19 impact in 2020, the North American market has been weak year-on-year. However, North American operators will substantially increase their spending in the second half of this year. In the Chinese market, due to the suspension of 5G capital expenditures and intensified supply chain challenges, the expenditures of Chinese network operators have fallen sharply by more than 20% in the second quarter of 2021.
Kyle Hollasch, chief analyst of Cignal AI transmission hardware, said: "Despite the current semiconductor supply chain problems, as operators purchase additional high-performance long-distance WDM-related equipment, North American spending should accelerate in the second half of 2021. Long-distance line systems can Support for wider and variable channel intervals, higher degrees, and improved add/drop capabilities have become a strong reason for operators to invest now."
Other report findings:
1. After five quarters of investment in advanced coherent and line systems, the spending mix between long-distance and metro WDM reached a record level. Taking into account the imminent upgrade of the use of 400G coherent pluggable transmission systems, operators may postpone metropolitan area network expenditures.
2. China's optical and packet hardware expenditures experienced the largest single-quarter decline on record, and for the first time in consecutive quarters, they fell year-on-year.
3. EMEA (Europe, Middle East and Africa) optical hardware spending continued to maintain a steady single-digit growth, so the quarter achieved a significant year-on-year growth. Although Nokia has achieved a strategic victory and Ciena’s equipment replacement contracts have continued to increase, Huawei’s footprint in the region has not been significantly affected by geopolitical factors.
4. Spending on packet transmission equipment in North America has increased slightly, and market leader Cisco has achieved growth in its core sector as the shipment of its 8000 series routers climbed.
5. Due to the increase in delivery time due to global semiconductor production constraints, the shortage of components puts pressure on small equipment manufacturers. ADVA and Infinera quantified the impact of shortages on sales (10% and 6% of revenue, respectively), but larger equipment vendors reported that the shortage had little impact on company sales. Equipment vendors expect these problems to be resolved in 2022.
