Industry News
Why There Was a Good Mood at OFC 2013
The mood at OFC 2013 was upbeat this year, based on both show floor and conference impressions. Does that match with the market data reported at the event?
Component and equipment revenues have been growing since their lows in 2009, lifting spirits and attendance generally. But moods don’t necessarily correlate with January-to-December revenues, and not even running averages, but more with the current quarter and forward-looking orders. Salespeople are measured by these latter metrics, and those numbers show up prominently in quarterly earnings calls of public companies.
LightCounting noted at its OFC dinner that carrier capital spending was up slightly in 2012, but the growth came from China. Spending in Europe and the U.S. were down. Ovum projected only modest growth in capital spending worldwide for 2013, but that includes a lot of things, with larger variations within that category. AGC Research reported that relevant datacom and telecom equipment revenues were down in 2012, compared to 2011.
The chart below shows OIDA’s own tabulation of quarterly revenues (in millions of dollars) of selected operations of public optical communications components companies. If these are representative of most of the companies exhibiting on the show floor, then the mood would seem to have been good in early 2011, following a long run in quarterly growth. Early 2012 followed a series of down quarters. Now, in early 2013, sales among these companies are not up dramatically, but they are stable.
Revenue growth is stronger than shown here, however, because there has been a lot of growth in component sales for FTTH in China. LightCounting reported that transceiver sales actually grew in 2012 overall. Ovum reported that sales of total optical communication components, which includes transceivers, reached $6.3 billion in 2012, down 3% from 2011. But, Ovum expects 4% growth in 2013, even though Q1 would likely contract due to built-in price declines.
Also, looking only at telecom misses the hullaballoo in data centers and other IT spending. There is increasing attention on using optics in the data center, and not just in rack-to-rack connections, but within racks.
Most importantly, there are currently many pressing reasons for network and data center operators to spend money or at least pay attention to optical cable and equipment: cloud computing, software-defined networking, fiber exhaust, wireless backhaul, and FTTH, to name a few. That’s not necessarily enough to increase spending in our corner of the communications industry, but it doesn’t hurt, and it added to the mood at OFC.
New Videos Available
OIDA hosted a very successful Data Center workshop during OFC/NFOEC ’13. The slide presentations and videos for the Future Needs of “Scale-Out” Data Centers Workshop are now available online.
To view these materials from the meeting, please visit our online Media Library. Enter your company’s username and password to access the videos.
For trouble logging in, please contact Brooke Hirsch.
Government News
Update on the NPI
A lot has happened since the last OIDA update on the National Photonics Initiative, or NPI. The NPI is a follow-on effort by five technical societies to support the U.S. optics and photonics community. A highlight was an event on February 28 in Washington DC, convening the societies and five ad hoc committees formed to help the process.
First, a review. The National Academies released its report, Optics and Photonics: Essential Technologies for Our Nation (sometimes called Harnessing Light 2), last fall. The same week, five societies (OSA, SPIE, IEEE Photonics, APS, and LIA) met to make the NPI happen. Six months later, there are now three parallel efforts in place.
- Extending the report’s work. Five ad hoc committees were created around major industry sectors to extend the report’s recommendations with industry input, refine the arguments for support for photonics, and give industry’s blessing. The five sectors are: optical communications, energy, biomedicine, military and security, and manufacturing tools. Infinera was chair of the communications committee, and OIDA was the staff partner. The five groups met through February to draft white papers, and came to Washington for the February 28 event. That phase is nearly complete and the next step is to consolidate the five white papers into a single, coherent document.
- Professional advocacy. A second effort is using the services of a prominent DC lobbying firm, Podesta Group, to help with strategy, polish the arguments, customize the arguments for different audiences, gain access to policymakers, and so forth. While we pride ourselves on our progress, the extra help is critical, given the budget and political situation in Washington. The lobbying effort will continue over many months, and is being paid by the societies, primarily OSA and SPIE.
- Data collection. A third effort will collect more accurate data on the U.S. optics and photonics industry. This will be done by Tom Hausken at OIDA (and OSA) and Steve Anderson at SPIE. The effort will cover the major sectors of the U.S. industry, due for completion later this year. A key element will be calibrating the data with regard to the hard-to-quantify contributions to the donestic industry’s output, such as military contractors, offshore workers, and downstream products and services.
Meanwhile, OIDA is doing a lot of work behind the scenes. OIDA, with staff from OSA and the NPI, has been examining government funding for a Fraunhofer-like center for R&D in optical manufacturing. Fraunhofer is either a non-profit R&D contractor, or a quasi-national lab, depending on your point of view. It is notable for its guaranteed base funding from the German central government, supplemented by competing for grants from industry and government.
OIDA has also been involved in efforts to create an NNMI Institute in optics, with some announcements expected soon. Stay tuned for more news on these ongoing efforts.
Cybersecurity
As a result of the President’s Cybersecurity Executive Order (EO) 13636, the Commerce Department and the National Institute of Standards and Technology have been very active developing common standards and incentives to promote cybersecurity for owners and operators of critical infrastructure. NIST issued a Request for Information (RFI) on February 26, 2013 on developing the “Cybersecurity Framework,” with comments due on April 8, 2013. It also announced an in-person workshop to discuss the Framework. The workshop was conducted in Washington DC on April 3.
The Secretary of Commerce sent out another RFI on March 28, 2013 asking for comments on the development of incentives to promote industry participation in the standards and program being created under the Framework. Comments are due on that RFI on April 29.
OIDA is monitoring and participating in several efforts related to cybersecurity. For more information, please contact Laura Kolton or Tom Hausken.
OIDA Upcoming Events
Complimentary Program on Industrial Lasers
Co-located with OSA’s Advanced Solid-State Lasers Congress
28 October, 2013 – Paris, France
FREE Registration for anyone interested! Simply register for the Advanced Solid-State Lasers Congress as an Exhibit Attendee.
ENGINEERING EXCELLENCE AWARD
Paul F. Forman Engineering Excellence Award
One of the privileges of an OIDA Membership is the opportunity to showcase team achievements at your company by nominating a team for OSA’s Paul F. Forman Engineering Excellence Award.
To recognize teams who have made major contributions in optical engineering, OSA annually presents the Engineering Team Excellence Award. Named in honor of Paul F. Forman, whose approach admirably exemplified team achievements, these awards recognize technical achievements such as product engineering, process and software development, and patent development, as well as contributions to society such as engineering education, publication and management, and furthering public appreciation of optical engineering.
The deadline for nominations is 2 July 2013. The 2013 award will be presented in October 2013 in Orlando, Florida, USA during the Frontiers in Optics plenary session. More information and nomination materials are available online or contact the OSA Awards Office at awards@osa.org or 1.202.416.1960.
