What does optical communication equipment include? Current situation and development prospect of optical communication equipment industry

With the development of information technology and the promotion of commercialization of 5G networks, audio and video, big data, multimedia applications and other fields are developing rapidly, and the demand for bandwidth of data communication is increasing rapidly. More urgent needs have been generated, and optical communication is playing an increasingly important role in data centers, telecommunication networks, industrial manufacturing and other fields.

Under the background of policy encouragement and increasing investment in infrastructure, my country's optical communication industry continues to grow. The market size of my country's optical communication industry will increase from 91.3 billion yuan in 2016 to 126.6 billion yuan in 2021, with a compound annual growth rate of 6.76%.

What does optical communication equipment include?

Optical communication equipment refers to communication equipment that uses light waves to transmit information. It consists of 3 parts: signal sending, signal transmission and signal receiving. According to different transmission media, it is divided into atmospheric laser communication devices, fiber laser communication devices, space laser communication devices and waveguide laser communication devices.

Optical communication equipment mainly includes optical terminals (including transmitting and receiving equipment, or integrated transceiver equipment), optical amplifiers, codecs, optical multiplexers, optical demultiplexers, network management, etc.

Devices include optical junction box, ODF, fiber jumper, optical transceiver, optical detector, light source, optical power meter, optical attenuation meter, optical coupler, optical fusion splicer, optical connection equipment, etc.

According to different application fields, it can be divided into transmission equipment and datacom equipment. Transmission equipment is mainly divided into transmission network equipment and access network equipment. Datacom equipment is mainly routers and switches. According to different transmission media, it is divided into atmospheric laser communication devices, fiber laser communication devices, space laser communication devices and waveguide laser communication devices.

Status quo and development prospects of optical communication equipment industry

In 2022, China's 5G construction is steadily advancing, and the outbreak of downstream IoT, metaverse, smart home and other application scenarios will further increase the penetration rate of 5G. In 2022, China's 5G commercialization process is steadily advancing, and the growth rate of China's 5G user scale has slowed down. As of November 2022, the number of 5G users of the three major operators has reached 1.068 billion, a month-on-month increase of 3.3%, a net increase of 338 million from 730 million in December 2021, and the overall penetration rate of 5G users nationwide has increased to 48.1% .

From the perspective of the overall business revenue of the telecom industry, the growth rate of business revenue in the telecom industry has increased significantly after entering the 5G era. After the large-scale commercialization of 5G in 2019, the growth rate of telecom business revenue bottomed out and accelerated year by year. As of November 2022, the cumulative revenue of telecom business for the year reached 1,450.4 billion yuan, a year-on-year increase of 8.0%. The year-on-year growth in 2019/2020/2021 will be 0.7%/3.8%/8.1% respectively, showing a clear trend of acceleration.

The global competitiveness of Chinese optical module manufacturers continues to improve, and Huawei, ZTE, and Fiberhome dominate my country's optical communication equipment market. The competition in the optical module industry is relatively fierce, and domestic manufacturers continue to increase their international market share by virtue of technology accumulation. According to Omdia data, in the global optical module market in 2021, II-VI, which has acquired Finisar, ranks first with a 17% share, Zhongji InnoLight ranks second with a 10% share, and another domestic listed company, Accelink Technology, has an 8% market share Fourth place.

As the demand for high-speed optical modules in the datacom market is gradually released, domestic leading optical module companies are expected to enjoy the dividends of the industry development technology iteration period and achieve rapid growth in performance. In terms of my country's optical communication equipment market, Huawei ranked first with a 25% market share, ZTE ranked second with a 12% market share, and FiberHome ranked third with a 6% market share. Judging from the competition pattern of the domestic optical communication equipment market, Huawei and ZTE, the world's leading communication equipment manufacturers in China, still have strong competitive advantages.

According to wind data, the operating income of China's optical communication equipment sector continued to grow in the third quarter from 2017 to 2020. In the first three quarters of 2020, the operating income of the optical communication equipment sector reached 75.668 billion yuan, a year-on-year increase of 7.11%; the increase in operating income was mainly due to domestic The continuation of 5G and data center construction and the growth of demand from overseas datacom users.

From 2017 to 2020, the gross profit and gross profit margin of China's optical communication equipment sector fluctuated and developed in the third quarter. The gross profit of the optical communication equipment sector in the first three quarters of 2020 was 13.541 billion yuan, and the gross profit margin was 17.92%, an increase of 0.7 percentage points year-on-year.

In recent years, operators' large-scale centralized procurement of optical communication equipment has injected new momentum into the optical communication equipment industry, and the development potential of the optical communication equipment industry is gradually being released, establishing a new development pattern step by step.

In March 2021, Huawei exclusively won the bid for China Mobile's inter-provincial backbone transmission network OTN equipment centralized procurement project in the Yangtze River Delta region. The project purchased 1,160 WDM/OTN equipment boards and ports.

In March 2021, China Mobile has launched the procurement of CMNet backbone network integration services for the 2021 Yangtze River Delta Regional Internet Capacity Improvement Project. The procurement content includes 26 system integration services and 750 sets of general IT equipment integration services. The maximum budget of the project is 8.18 million yuan (excluding tax), and there is no division of tender sections. The number of successful bidders is 1, and the share of successful bidders is 100%.

In October 2020, China Mobile launched a single collection of equipment for the 2020 inter-provincial backbone transmission network expansion project, and three companies, Huawei, ZTE, and Fiberhome Communications, won the bid. The equipment purchased for this inter-provincial backbone transmission network expansion project is mainly: inter-provincial backbone transmission network OTN equipment. The total demand for OTN equipment of the three companies in this capacity expansion project is 32 sets.

The optical communication equipment industry data analysis in the optical communication equipment industry research report is based on authoritative national statistical data, adopts a combination of macro and micro analysis methods, and uses scientific statistical analysis methods to describe the industry overview. Detailed analysis of the equipment industry, the status of key enterprises, etc. The report mainly uses charts and tables to intuitively clarify the economic type composition, scale composition, operating benefit comparison, supply and demand situation, etc. of the industry. It is an indispensable assistant for enterprises to understand the market conditions of the optical communication equipment industry.

For more industry details, please click the "2022-2027 China Optical Communication Equipment Industry Market Panorama Research and Development Prospect Forecast Report" released by China Research Institute Puhua Industry Research Institute. In terms of form, the report is mainly based on rich data and charts, highlighting the readability and visibility of the article, and avoiding stereotypes and empty words. The report is attached with industry-related data, catalog of policies and regulations, major corporate information and industry events, etc., providing investors and industry professionals with a vivid industry panorama.