The optical communications market research agency has predicted the optical communications market in 2020 due to the 2019-nCoV. They believe that the sales expectation of the optical communications market in 2020 May not be high. Although the optical communications industry will not be affected as much as tourism and hospitality, no industry is immune to the global recession.
As people around the world push to work and study from home, demand for web and cloud services will soar. Against this backdrop, network and data center operators will compete for bandwidth and promise increased investment, but with the European and us economies suddenly "coming to a halt", it is not clear how many infrastructure projects can be completed. Despite the high demand for bandwidth, the optical communications industry is likely to experience the crisis of the 2001 Internet and telecom bubble in 2020.
Despite the panic in financial markets, the slowdown in demand for optical networks and transceivers is likely to be short-lived. Given the urgency to increase bandwidth in network infrastructure, we expect a very strong recovery to follow.
Most depressingly, after three years of stagnation, sales of optical modules are only just beginning to recover. The final quarter of 2019 exceeded all expectations, reversing forecasts of a decline in optical module sales last year. Shortages of the 100GbE optical module and many other products began in late 2019, well before supply chain disruptions caused by the virus.
The shutdown of the Wuhan optical communications plant over the past two months has been a challenge for many suppliers, but they have managed to keep up with growing demand. China's economy is rebooting, even Wuhan is resuming work and opening up, and work stoppages are beginning in Europe and North America.
The Chinese government is determined to complete all its planned network infrastructure projects by 2020, and they usually mean what they say. But the global recession will hit the nerves of Chinese consumers, which will have a negative impact on the revenues of local cloud companies and the sales of optical communications equipment used in data centers. In 2018, Alibaba, Baidu and Tencent slowed the deployment of 100GbE as trade conflicts between China and the United States intensified. Until the end of 2019, the optical communications market will slowly start to grow again, and we cannot predict the future development for the time being.
It's frustrating, but as long as we stay healthy, everything will be ok. We've been through recessions in the past, and we'll get through them this time. Thanks to the optical communications industry, everyone can now work from home, and children can do their homework in their own rooms.
Once the world returns to normal or new normal, networks and data centers will be the focus of investment for many years to come. While the timing of the recovery is difficult to predict at this stage, there is no doubt that the optical communications industry is poised for a strong recovery.
