Optical devices makers asked to step up shipments for China 5G base stations

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Optical devices makers asked to step up shipments for China 5G base stations

posted on Feb 03, 2020 02:26PM

The locakdown of Wuhan, the epicenter of coronavirus outbreak and China's production hub for optical communications components, may dent the construction of 5G base stations in the country, but Taiwan's optical semiconductor devices makers have been asked by their Chinese clients in the supply chain of Huawei to deliver shipments soon after they resume operations on February 10, according to industry sources.

The sources said that Huawei has captured over 60% of the Chinese market for 5G base stations, mostly supplying to China Mobile and China Telecom. The vendor released in the second-half 2019 orders for over three million units of 25G optical transceivers to four Chinese suppliers, Huagong Tech and Accelink Technologies based in Wuhan, Zhongji Innolight in Suzhou and Hisense Broadband in Qingdao.

Taiwan-based suppliers of optical semiconductor components have tapped into China's 25G transceiver supply chains. LandMark Optoelectronics has ventured its GaAs-based optical communications components into the supply chains of Huagong, Zhongji Innolight and Hisense Broadband, while TrueLight and LuxNet have also penetrated their active optical components and diode chips, respectively into Huawei's 5G base stations through Huagong, which alone has landed 30-40% of the vendor's orders, the sources said.

Market watchers speculate that Huagong and Accelink may see their shipments to Huawei disrupted by the Wuhan lockdown.

But TrueLight said its shipments to clients there for 5G base station applications will not be affected in the short term as the company has been told to kick off shipments February 10, according to industry sources. The company's inventory is sufficient to meet shipment demand from Chinese clients and its first-quarter revenues will not be much affected.

The sources said that the Wuhan East Lake High-Tech Development Zone, dubbed China's Optics Valley, now commands 67% of the country's and 25% of the global supply of optical fibers and cables. The valley is also China's largest production base for optical communications components, supplying 60% of China's market demand.