Atlanta, April 4, 2003. The cavernous halls of the Georgia World Congress Center made attendance at Optical Fiber Communications (OFC) 2003 seem even lighter than it actually was, but there was no escaping the absence of significant traffic on the show floor. Attendance was just over 15,000, compared to last year's total of around 28,000. There were 4,358 technical attendees, 5,397 exhibitor attendees and5,268 walk-ins, according to show managers.
Approximately 870 exhibitors braved the economy, telecom bust, and war fears to attend the conference, down from approximately 1200 last year. As usual at such a major conference, some exhibitors were very happy with the quality of the floor traffic or their meetings with customers, but the majority seemed resigned to a discouragingly slow show.
The uncertain state of the industry was captured in Corning's annual OFC briefing, when Robert Brown, vice president of the company's optical fiber division, said that the global market for fiber fell 50% in 2002, to 55 million km. To make matters worse, there is still twice as much fiber-manufacturing capacity available as current demand. The good news is that Asia, and especially Japan and China, show relative strength and that the total of 600 million km of fiber now deployed worldwide represents just 20% of the potential market. However, Brown predicted a further 10% decline in global capital expenditures by carriers in 2003 as they struggle to correct their balance sheets.
Neither Brown nor Gerald Fine, senior vice president of Corning Photonic Technologies, would comment on 2004 or beyond, but Fine said there are signs of stabilization in optical component pricing. He said the 2003 component market should remain stable relative to the second half of 2002, although down 15-25% year on year. He also reiterated investor guidance regarding Photonic Technologies, stating that Corning will find a partner, go it alone with a limited product line, or sell. A decision will be made by mid-year.
The consensus of most speakers at OFC was that carriers face a broken business model in which bandwidth demand continues to grow at 50%-100% per year, far surpassing voice, but revenues remain flat and even in decline. In addition, opportunity clearly has shifted from long-haul to metro, access, and enterprise networks. Consequently, the focus of new products on the show floor was to provide more value at lower cost. Innovative components and subsystems came from companies such as Xponent (Monrovia, CA), which offered new surface-mounting technology; GalayOr (Lod, Israel), which demonstrated silicon-on-chip integration; Zia Laser (Albuquerque, NM), with its InAs quantum-dot DFB lasers; and Lightbit (Mountain View, CA), which demonstrated its all-optical 2R regenerator based on optical phase conjugation.
New tunable technologies were much in evidence, as exemplified by a widely tunable filter from iolon (San Jose, CA) and a tunable transponder from Agility Communications (Santa Barbara, CA). NeoPhotonics emerged from its acquisition of Lightwave Microsystems with what it said is a line of waveguide-based components and subsystems that is already challenging more-established players.
To meet the need for improved manufacturing efficiencies, newcomer LxSix (St-Laurent, Quebec), launched its automated laser-processing technology for writing gratings on multiple medium, while Newport (Irvine, CA) showed its optical processor based on DLP technology from Texas Instruments and Melles Griot announced a new six-axis nanopositioning stage.
Outsourcing, especially to China, was a major topic of discussion during the meeting, with companies such as Wavesplitter (Fremont, CA) moving all its manufacturing to Taiwan and Oplink Communications (San Jose, CA) repositioning itself as an optical-manufacturing services company with sophisticated capabilities in China. The China Forum, co-sponsored by PennWell and the OSA, set the stage for much of the discussion surrounding the emergence of China as a major factor in telecommunications, both as a consumer of services and a global manufacturing resource.
Conard Holton and Steve Anderson
Laser Focus World