The global market for optical transceivers eked out respectable year-over-year growth (+8%) in Q3 2018 despite headwinds faced by several vendors. Strong year-over-year sales growth was reported by II-VI (+20%), Accelink (+18%), Innolight (+18%), Lumentum (+49%), Neophotonics (+15), and Sumitomo (+12%), while quality issues at AOI (down 36% y-o-y), and incomplete recoveries from ZTE’s 2Q18 shutdown at Acacia (down 10% y-o-y, despite being up 46% vs. Q2) and Oclaro (down 15% y-o-y, while up 9% sequentially) tamped down the market average.
This ying and yang market dynamic was also present in company guidance for Q4 2018, which ranged from strong growth to seriously disappointing. II-VI continues to benefit from strong demand for ROADMs and 980 nm pump lasers, and guided for 20% y-o-y growth. Acacia and Neophotonics guided for mid-teens growth in sales on the back of new CFP2 and 600G products (Acacia) and increased sales to Huawei (NeoPhotonics).
Lumentum had guided for 14% growth, but had to revise that to minus 15% after ‘a large consumer electronics customer’ (i.e. Apple) called to say it wouldn’t need nearly so many VCSEL arrays in 4Q as it first thought. And AOI is still struggling with a quality issue that is limiting its ability to ship everything customers want.
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