Summary of Global Optical Communication Market Development in 2022

2022 was a year of both challenges and opportunities. On the one hand, the global economic crisis, inflation, the Russia-Ukraine war, geopolitical tensions, and China's "zero-tolerance policy" have led to a continuous contraction in the industry chain, and the cost of raw materials, labor, and transportation has continued to rise, increasing uncertainty in the optical communication industry. On the other hand, after experiencing the COVID-19 pandemic, countries have attached greater importance to and accelerated the digitalization process, actively promoting the construction of network infrastructure, bringing strong market demand for the optical communication industry.

According to ICC statistics, in 2022, the service revenue of 23 major communication providers worldwide reached about 2.51 trillion US dollars, an increase of 4.53% compared to 2021, and the growth rate slowed significantly compared to 14.97% in 2021. The global economic recession and inflation have caused a decrease in purchasing power of consumers and businesses, resulting in a decrease in demand. However, the elasticity of telecommunications services can ensure that such demand will not decrease significantly.

In terms of communication capital expenditures, under the push of the continuous rapid increase in traffic demand stimulating infrastructure construction, global communication providers' capital expenditures continued to increase for the fifth consecutive year in 2022. According to ICC statistics, in 2022, the capital expenditures of 23 major communication providers worldwide reached approximately 325.49 billion US dollars, with an annual growth rate of 10.50%, which slowed down compared to 19.25% annual growth rate in 2021.

In terms of the optical network equipment market, despite the macro environment being full of challenges, driven by strong market demand, the global optical network equipment market achieved nearly 2% growth, with a scale of about 15.5 billion US dollars. North America performed strongly in the market, while demand slowed down in the Chinese market due to the COVID-19 epidemic lockdown.

In the optical device market, although supply problems have limited the sales of many companies, the global optical device market has achieved double-digit growth for the third consecutive year. According to ICC statistics, in 2022, before considering the contribution of acquisition business, the revenue of 11 major optical device vendors worldwide was close to 9.4 billion US dollars, with an organic year-on-year growth rate of nearly 17%.

In the communication chip market, the supply of optical communication ICs continued to improve, but overall, it still showed a trend of supply shortage. By the second half of 2022, with the weak demand for consumer electronics releasing supply for network communication customers, the IC shortage problem faced by the optical communication industry gradually eased, but the supply of some specific IC components did not recover as quickly as expected. According to ICC estimates, in 2022, the revenue gap caused by IC supply shortages for Coherent, Lumentum, and NeoPhotonics companies amounted to a total of 650-700 million US dollars.

In the optical fiber cable market, driven by 5G construction, optical fiber broadband upgrades, and the growth of cloud services demand, global optical fiber cable demand has increased. Data shows that in 2022, global optical fiber cable demand still increased, reaching a scale of 523 million core kilometers, an increase of 4.77% compared to 2021.